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GOOG Sinking On FTC Fears
Stocks are heading lower in early trading as oil prices continue to hover near 30-month highs. There are also renewed fears surrounding the European debt crisis. Shares of GOOG are off 2% on regulatory speculation (see below). Upcoming catalysts include first quarter 2011 financial results released Thursday, April 14 at 4:30 p.m. Eastern Time; continued Android momentum; regaining ground in China and pushing into other emerging markets; updated software, adoption and media partners for Google TV; and progress in other newer initiatives (+1, location-based services, mapping, gaming, etc.). The stock trades at approximately 14x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.The Top 10 Challenges Facing New Google CEO, Larry Page (VentureBeat)
Larry Page took over yesterday as chief executive of Google. Here are the top 10 things he needs to overcome or manage to prevent the social giant from becoming stale:
- Deal with Facebook’s incredible growth
- Circumvent or manage the obstacles in China
- Stay out of the way of antitrust regulators
- Catch up with Apple on mobile innovation (debatable)
- Make Google a good investment (uh, duh)
- Get users to trust Google in terms of privacy again
- Retain talent
- Fix the company’s public image issues
- Find a new business beyond search (I think it’s called Android)
He has a lot of wind at his back as he takes over from Eric Schmidt.
Speaking Of Staying Out Of The Way Of Antitrust Regulators… (Bloomberg)
The FTC is planning a broad antitrust investigation of Google. The investigation “could be on par” with the Justice Department’s actions against Microsoft in the 1990s. The only thing the FTC is waiting for is for the DOJ to decide whether to block Google’s acquisition of flight software company ITA, which might threaten travel search engines like Kayak. Read more at Business Insider.
Larry Page Spends $900 Million On His First Day To Stock Up On Patents (The Wall Street Journal)
Google has bid $900 million to buy patents from Nortel. The company is stocking up on patents since the tech world is getting filled with patent lawsuits. Google’s bid on the Nortel patents is a “stalking horse bid,” meaning it is the bid all other bids will be measured against. The move is exactly like the kind of move everyone said Larry Page would start making; a bold use of Google’s huge pile of cash to solve a problem quickly. Read more at Business Insider.
Android’s Next 5 Challenges (PC World)
After months of outselling the iPhone and Blackberry phones, Google’s Android finally has a bigger share of the U.S. smartphone market. That’s no reason for the company to sit on its laurels. Here are Android’s 5 biggest challenges:
- Reduce fragmentation…
- … Without pissing everyone off
- Contain malware
- Beef up the Android Market
- Polish up the OS
While it may be on top, Android still has a lot of work to do.
Brain Drain: Google Loses Its Product Guy (Business Insider)
SVP of product management Jonathan Rosenberg resigned from Google yesterday. To many, he was considered one of the very most powerful people at the company. Word from a source close is that Rosenberg wanted to work at Google until his high school-aged daughter left for college, but that new Google CEO Larry Page wanted longer term commitments from his senior executives. Given that Rosenberg couldn’t commit, the two decided to make the change sooner rather than later. Read more from Nicolas Carlson at Business Insider.
Daily Trader: Google Brand Value And Hedge Fund Interest (Seeking Alpha)
BrandFinance computed brand value for various companies and Google was number one with a brand value of $44.29 billion. For 2011, the Street estimates non-GAAP earnings to be between $32.23 and $37.51 per share. The stock trades at 6.5x sales. Google has exceeded consensus estimates in eight of the last nine quarters. In terms of investor interest, long/short funds are crazy about Google. The company is expected to grow over 15% this year. Because of it, there are over 150 hedge funds invested in the tech stock.
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