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GOOG Falling As Markets Dive
Markets are diving into the red on Thursday as Bank of America gets some relief and as Steve Jobs shocks and saddens the market with his departure as CEO of Apple. Shares of GOOG have erased opening gains and are currently dipping into the negative following the rest of the tech tape. Catalysts include continued Android momentum in the smartphone and tablet markets worldwide; Motorola acquisition approval and integration; regaining ground in China; any revival or partners for Google TV (including Motorola); the roll-out of Google Music and social network Google+; and progress in other newer initiatives (location-based services, mapping, gaming, Chromebooks, etc.). The stock trades at approximately 10.9x Enterprise Value / EBIT, inexpensive relative to recent trading levels.Google Doubles Down On Android And Andy Rubin (Seeking Alpha)
When Google acquired Android in 2005, it was peripheral to the company’s search ambitions. The success of Android changed the equation. Now the phone, and its creator, Andy Rubin, are the very heart of Google’s strategy. Rubin, and Google, face problems on three fronts:
- The present patent and copyright attacks against Android threaten to rewrite American law, asserting the primacy of patent and copyright over technology and making Google’s claims of “open source” a dead letter.
- Manufacturers are chafing under Google’s control over the Open Handset Alliance and openly moving to create their own open source kit.
- Carriers are trying to charge customers out the wazoo, which could force Google to open its network to direct customer connections if traffic is going to grow.
Overhanging all of this, of course, is the threat of Microsoft, which could use Google’s present problems to get its Windows Mobile phone back into the game.
Google Settles To Pay $500 Million For Drug Ads (The New York Times)
Google will pay $500 million to settle government charges that it illegally showed ads for online pharmacies that operate outside the law (by failing to require a prescription or selling counterfeit drugs). The investigation was first revealed in May, when Google set aside $500 million for the potential settlement of a Department of Justice investigation into its advertising practices. The move decreased its quarterly profit by 22%. That’s still not a lot of money for Google.
Android Gains A Hardware Maker As RIM Throws In The Towel… (Bloomberg)
And rightly so. Research In Motion (RIM), seeking to boost the appeal of its BlackBerrys and revive plummeting sales, plans to enable models expected next year to run applications built for Google’s Android operating system. BlackBerrys that run on RIM’s new QNX software will be Android-compatible. RIM has said it plans to introduce QNX phones in “early” 2012.
…And Potentially Looses One To Windows Phone (Information Week)
London-based mobile manufacturer INQ is openly discussing the possibility of pulling away from Android post Google’s buyout of Motorola. While the firm, which has released a number of Android based devices since 2009, isn’t advocating a wholesale withdrawal from Google’s OS, CEO Frank Meehan said INQ is looking to reduce its reliance on the platform moving forward. The company is seriously considering Windows Mobile.
The Hurdles For Google’s Acquisition Of Motorola (TechCrunch)
Google has obviously started on its trip through the obstacle course that is the U.S regulatory approval system for its acquisition of Motorola. The company claimed that the deal was subject to regulatory approval in the U.S., the EU and other jurisdictions. One of those other jurisdictions just happens to be China. And we all know how much Google loves China. But the search giant hasn’t sent China’s Commerce Ministry an application for approval. Whoops.