The Google Investor is a daily report from SAI. Sign up here to receive it by email
GOOG Down With Market
Consumer confidence unexpectedly deteriorated in December, hurt by increasing worries about the jobs market sending the market down after an initial rise at the opening bell. Shares of GOOG are off over 40 basis-points, which is more than the rest of the tech index. Upcoming catalysts include continued Android growth; regaining momentum in China; updated software, adoption and media partners for Google TV; and progress in other newer initiatives (location-based services and mapping, gaming, social, etc.). The stock trades at approximately 16x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.
Yet Another Analyst Increases Estimates And Raises Price-Target (Forbes)
Kaufman Brothers analyst Mayuresh Masurekar boosted his price target on shares of GOOG from $650 to could be up 12%-15% from last year. The strong performance should benefit search, as e-commerce sites use search to drive leads and traffic, adding that his checks find that “multiple” e-commerce players boosted ad spending through search generally and Google specifically. For the fourth quarter, Masurekar increased his revenue forecast for Google to $6.2 billion from $6 billion with EPS of $8.24 a share, above the Street consensus at $8.04.
Android Skyrocketed This Year; Expect Cheaper Phones On The Horizon (The Wall Street Journal)
This year saw the iPhone gain its first worthy competitors, nearly all powered by Android. While the first Android device was launched two years ago, it wasn’t until 2010 that Google’s OS hit its stride. The collaboration with Verizon, Motorola and HTC produced a series of hit phones this year and saw Android pass Apple in market share. Coming next, Android’s move is downmarket, with some predicting Android phones will sell at unsubsidized prices under $100. That plus cheaper data plans could dramatically expand smartphone penetration.
Google’s Loss Of Groupon Has Had Some Effects (eWeek)
Google hired several hundred sales representatives to call local businesses to promote Google’s Tags (the yellow call-outs in search results) and Boost (online search ads in Google Places) ad efforts. Why is this interesting? One, it’s what Groupon, LivingSocial and others do to successfully get their coupons and deals to local businesses and into consumers hands. Second, it adds a personal dimension we haven’t seen from Google. Once the ultimate Web innovator, the company has begun to follow the younger, scrappier startups.
The Pros And Cons Of The Google / ITA Software Partnership (The New York Times)
Mickey Meece at The New York Times puts together a solid article on the positives and negatives surrounding Google’s acquisition of ITA Software. The deal could give consumers a better travel search experience leading to more user requests and giving the industry more “actionable information” to work with. Longer-term, however, it could give Google such an advantage that travel search becomes dominated by one engine, stifling innovation. Though some believe even more innovation would be on the way with a Google at the helm. In any event, the Justice Department could take up to a year to review the deal and would probably impose conditions on a combined Google-ITA to foster competition.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.