The Google Investor is a daily report from SAI. Sign up here to receive it by email.
GOOG Falls Ahead Of Fed
Stocks are shaky today ahead of the 2:15pm ET Federal Reserve meeting. Shares of GOOG are off around 1%. 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 14x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.
Google Is A Hold, Not A Buy Based On Valuation (Seeking Alpha)
The editor of The Kelly Letter says that now that the stock is back over $500, he has removed it from the short list of best buys. That’s due to valuation, however, and not to a lack of faith in Google’s future. Even if the company maintains its current market share, revenue will advance smartly. If it does a few things right to grow search or it proves clever with its many new lines of business, the company should add a decent chunk to overall revenue as well. That’s why the stock is a Hold and not a Buy.
Find The Next Growth Engine Or There Will Be Another Belle Of The Ball (The Motley Fool)
Michael Copeland at Fortune thinks mobile search and Android, and perhaps YouTube, display ads and video advertising are Google’s greatest untapped opportunities. One thing is for certain, it needs to find another growth engine. If not, that same valuation compression we saw with Microsoft is likely to happen with Google. There is no reason to believe that it won’t, unless Google can find another or multiple big engines of growth to both satisfy it as a company and satisfy investors.
Advertising Practices, Google And You (The Wall Street Journal)
As Google agonizes over profiting from user information on the advertising side, the company still leads the overall Internet pack with revenue of $23.7 billion last year. That is more than three times Yahoo‘s, its closest competitor. Google’s online advertising business is growing faster than those of its publicly held U.S. rivals but growth has slowed dramatically. Facebook is a widening threat with its ability to sell highly targeted ads to its more than 500 million users. Google is now trying to establish itself as the clearinghouse for as many ad transactions as possible, which would put the search giant at the centre of the trade in other people’s data as well.
Net Neutrality A Long Ways From Being Over; Neutral Stock Impact (Susquehanna Financial Group)
Google and Verizon announced a “net neutrality” proposal that is a compromise between the prior postures of both companies. Marianne Wolk at Susquehanna says the framework leaves MSOs and Telcos room to create and offer new, “differentiated online services” in addition to the public Internet access and video services currently offered. The framework does not largely apply to wireless/mobile networks. No final action is likely on this issue near term and no formal business alliance was announced between the two companies.
iPhone OS Versus Android: How They Stack Up (AppConsumer)
The iPhone versus Android. Both need more RAM and processing power. Cody Willard believes that Android isn’t as easy to use nor is it as reliable. And there are going to be differences between each Android-power device. On a scale to 5, he gives Android a 4 and iPhone a 4.5.
Business Insider Emails & Alerts
Site highlights each day to your inbox.