THE GOOGLE INVESTOR: Betting The (Wind) Farm On Cloud Computing At Developers Conference

The Google Investor is a daily report from TBI Research. Sign up here to receive it by email.

cloud computing tbi

GOOG Down With The Market
Google stock is trading down with the rest of the market as disappointing employment news added to investors’ worries over the world economy. GOOG is off $11 to $483, or around the stocks 6-month low. The company begins day two of it’s developer conference, Google I/O, today. Weighing on the stock are investor concerns with increasing costs, lack of focus (wind farms) as well as lack of secondary growth engines. Potential catalysts include news flow from Google I/O running through the week, resolution of the AdMob acquisition investigation anticipated soon, Android and mobile adoption as well as traction of newer initiatives. The stock trades at approximately 18x 2010 EPS and 15x Enterprise Value / EBIT.

Google Basing Future On Web-Based, Multimedia Applications (The New York Times)
Google laid out the future for developers at its annual Google I/O conference and it’s web-based, rich multimedia applications that operate within the browser. Google outlined new ways to put more video on the Web, an application store for free and purchased Web products, and a bigger and easier-to-use development platform for cloud computing. In addition, Google is creating an applications storefront for its Chrome Web browser and operating system; a consumer play in addition to an “apps for sale” business Google has been building for enterprise customers.

Morgan Stanley Sees CIOs Warming Up To Cloud-Based Computing, A Win For Google (Morgan Stanley)
The Morgan Stanley technology research team issued its annual CIO survey which indicates that investment officers are warming up to moving operations into the cloud or web-based computing. Mary Meeker believes that Google stands to be a key beneficiary for this shift in sentiment given the company’s focus on enterprise applications and development. Note that Google’s Gmail had 177 million global users in April 2010, up 22% year-over-year according to comScore. She reiterates her Overweight rating and $665 price-target.

Google Stock Price Offers Longer Term Investors An Excellent Entry Point (Seeking Alpha)
Preet Chalwa, contributor at Seeking Alpha, believes GOOG offers “an excellent entry point into a company of innovation and excellence” for long-term investors. His assumptions include: 1) continued desktop search growth; 2) maintaining search market share; 3) significant revenue generated from mobile search; and 4) strength in emerging markets such as Brazil and Turkey. His assumptions do not take into consideration: 1) other revenue drivers; 2) China; or 3) profit from Android. Jim Cramer would disagree. Although not as eloquently stated, he’s highly bearish on China given the lack of presence in that market.

Google Will Fight The Government Tooth And Nail For AdMob (Reuters)
Google will fight the federal government “very hard” if regulators block the proposed acquisition of mobile advertising firm AdMob. The FTC recently was granted a two-week extension for its review of the $750 million acquisition to better understand the competitive landscape, especially from Apple and the recent Quattro Wireless acquisition. The ruling is expected in a few weeks. Google should fight if denied, if for no other reason than to save face with investors for instilling the ridiculous kill fee.

Android Moving Up The Mobile Ad Impression Ladder, Significantly Behind The iPhone (All Things D)
According to mobile ad network Millennial Media, April data reveals that ad requests on Android increased 77% from March and are up 282% year-to-date. Aiding the significant increase are likely the number of smartphone devices that have hit the market over the past few months. Android now has 10% share of total ad impressions, making it the third largest mobile operating system behind the iPhone OS at 62% and BlackBerry OS at 17%.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.