THE GOOGLE INVESTOR: Google's Big In Japan, But Still Losing In China

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GOOG Up In Confused Market
Despite consumer confidence being at its lowest since February, shares of GOOG are up strong. While investors fear rising costs with no real second growth engine for the company, catalysts for GOOG include continued Android and mobile traction; the release of Chrome operating system this fall; regained momentum in China; as well as progress in other newer initiatives (social networking, gaming, etc.). The stock trades at approximately 18x 2010 EPS and 13x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.

Investments At The Expense Of Margin Should Be Rewarded (Jefferies & Co.)
Youssef Squali at Jefferies & Co. believes that Google’s and Amazon‘s decisions to increase investments in the June quarter at the expense of margins reflects positively on the companies’ expectations for improving demand in the second half of the year and beyond. Making money in the Internet group as a whole requires patience and he advises sticking with higher quality names like Google.

Yahoo! Japan Chooses Google Over Microsoft (The Wall Street Journal)
In a surprise move, Yahoo! Japan has decided to use Google’s search engine technology and online advertising platform instead of Microsoft’s platform which, of course, is being used by part-owner Yahoo! The switch to Google’s search engine is expected to happen by the end of the year and to its online ad platform some time thereafter. Yahoo! Japan makes up more than 50% of Japan’s Internet search activity while Google accounts for about 38% (including partners). The partnership would result in the sheer dominance of the Japanese Internet search market.

Not Surprising, Baidu Schooling Google In Mobile China Search (The Wall Street Journal)
According to research firm Analysys International, Baidu fielded the most mobile searches in China in the second quarter, accounting for 34.3% of the total, a rise of about five percentage points from the first quarter. Despite accolades and loyalty for Android, Google’s mobile search share fell by about five percentage points to 12.3%. Adding insult to injury, Baidu is in talks with several handset makers about embedding a Baidu search box on their smartphones in China that use Android. More on Google in China.

Google Fighting Microsoft To Retain AOL Search Deal (TechCrunch)
As the AOL / Google search deal comes to a close at the end of this year, Microsoft is stepping in to try and pick up the incremental search share (2.5%) –  not too mention that AOL users tend to click on search ads at more than twice the rate. The bidding war has gotten so out of hand that many are joking that either company should just outright purchase AOL for $2.3 billion.

Daily Trader: GOOG Looks Bullish On Money Flow (Learning Markets)
There is some bullish pressure building in the background of GOOG. Looking at yesterday’s money flows, GOOG has an up / down ratio of 116/100. The question is: will GOOG continue falling or will increasing bullish sentiment help turn things around and start pushing the stock price higher? GOOG has gained 2.92% during the past month and is currently trading above its 20-day and 50-day moving averages but below its 200-day moving average.

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