The Google Investor is a daily report from SAI. Sign up here to receive it by email
GOOG Up As Market Rises
Markets are up on the big beat from July retail sales blowing past expectations. Shares of GOOG are up more than 1%. Investors continue look for Android momentum and monetization of smartphones and tablets along with direction for Motorola; the vision of Google TV with hardware partners; continued growth and monetization of YouTube; expansion of social network Google+; and progress in other initiatives (location-based services, mapping, Google Wallet, Google Music, Google fibre, etc.). The stock trades at approximately 12.4x Enterprise Value / EBIT.
Google Starts Remaking Motorola (ReadWriteWeb)
Google announced that it will lay off about 4,000 of Motorola’s 20,000 employees. Google will also close or consolidate about one-third of Motorola’s 90 facilities. The shutdown will cost Google $275 million in the third quarter of 2012. Google said it will simplify Motorola’s mobile-product portfolio, “shifting the emphasis from feature phones to more innovative and profitable devices.” The product team at Motorola will now be run more like a startup, leaner and more efficient, with an emphasis on innovation. This move isn’t exactly unexpected. Both Nokia and RIM have announced heavy layoffs and restructuring this year to reposition themselves. It is now Motorola’s turn to reinvent its business.
Is Google Thinking About Same Day Delivery? (Business Insider)
Google is eying a new project: same-day delivery. It kind of makes sense. Here’s why: Google contracts with a fleet of drivers for its Street View mapping project. Why not have them deliver goods in their spare time? Google is also working on self-driving cars, which could also start delivering packages—cutting out the cost of a driver. They might as well deliver packages. What else are they doing? Amazon offers a limited same-day delivery service in just under a dozen areas, and eBay just started experimenting with same-day deliveries in San Francisco.
Android Users Chose Android Because They Want To Stay With Their Carrier (The Verge)
Coming out of the Samsung trial, Apple put together a survey in January of 2011 on why consumers considering an iPhone went with Android instead. According to the results, the most predominant reason had nothing to do with Google’s mobile OS at all: 48% stated they “wanted to stay with current provider” as a motivating factor. Trusting the Google brand came in at 36%, with 27% stating that they preferred the Android Market. Certain elements that have become distinguishing characteristics for Android, like larger screens and turn-by-turn navigation, came in at just 30% and 25%, respectively. It’s not about the OS.
Google Ventures Does More Than Just Write Checks (VentureBeat)
Aside from the Google connection, the firm and its partners are obviously different from anything else in their league in a few major ways. When Google decides it wants to help a young tech company, the resources it puts behind the effort are mammoth. Like helping hire the first five employees and then teach the founders how to hire their next 20. The Google Ventures team keeps a close eye on culture to ensure candidates are a good fit for the growing startup, while prevetting design and engineering candidates with veteran Googlers.
Buying Frommer’s Could Get Google More Antitrust Scrutiny (TechCrunch)
With its recent purchase of Zagat and yesterday’s announcement that it is acquiring travel guide company Frommer’s, there can be little doubt that Google is getting deeper into the content business. This move makes a lot of sense for Google, which is trying to add more content to its local reviews business and Knowledge Graph, but it could also put the company under additional scrutiny from antitrust investigators. Already, the consumer advocacy organisation Consumer Watchdog is calling upon government regulators to block the acquisition saying, “there is a fundamental conflict between being a search provider and a content provider.”
Google Poaches A Microsoft Partner With Frommer’s Buy (ZDNet)
Google’s purchase of the popular Frommer’s series of travel guides gives it a premium source of information to combine with its search products. It also poaches a partner that exclusively provides data for a featured app defaulted in Windows 8. Microsoft is prominently featuring Frommer’s content in The Travel app. It is visually impressive, with magazine-style collections of images and information about hundreds of destinations worldwide. But the content is exclusively derived from Frommer’s, and the links to attractions, hotels, and restaurants are all prominently identified as such. By taking over that information source, Google is giving itself the opportunity to control access to that information.