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GOOG Up Strong In Positive Market
Stocks are rallying after the announcement of a plan for tax break extension. Shares of GOOG are up a strong 2% on positive comments from Morgan Stanley. Upcoming catalysts include continued Android growth; the release of Chrome operating system; regaining momentum in China; adoption of and media partnerships for Google TV; and progress in other newer initiatives (location-based services and mapping, gaming, social, etc.). The stock trades at approximately 14x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.
Google Upside Not Being Fully realised Says Morgan Stanley (Business Insider)
Scott Devitt at Morgan Stanley is bullish on Google raising estimates and price target to $730.Google’s growth in mobile and the success of Google Instant aren’t being fully appreciated. He sees them driving growth. Here’s the bullets of the note:
- Google Instant, which makes searching more efficient by displaying search results as users type, could drive increased user loyalty and market share and revenue upside in the fourth quarter and next year.
- Mobile, given the rapid growth in usage / penetration, he believes ‘Instant’ on mobile may eventually prove more important than desktop.
- eCommerce: Initial data for the holiday eCommerce season are strong, which should support robust paid search spend on Google during the current quarter.
He is increasing his fourth quarter revenue estimate to $6.2 billion and EPS to $8.23 (3-4% ahead of consensus).
Google–Groupon Failure Is Second Local Miss After Yelp (eWeek)
Ding dong, the Google Groupon deal is dead, the wicked Google–Groupon deal is dead. La la la, la, la, la. Google purchased 42 companies in 2010, but for the second year in a row (last year was Yelp) Google whiffed on locking up a popular Internet startup that would have beefed up its local search and advertising presence. Clint Boulton at eWeek believes that this could be the best deal that didn’t come to fruition for Google. The search engine already has solid local search and ad offerings: Google Places, Place Search and the Boost ad platform for SMBs. And $6 billion is a lot of money. Read more at Business Insider.
Android Chief Shows Off New Motorola Tablet Launching Who Knows When (All Things Digital)
At last night’s All Things D mobile conference, Android chief Andy Rubin demoed a new tablet from Motorola running Android’s Honeycomb operating system. The tablet has no buttons and relies entirely on homescreen navigation icons. It will have tiles operating in the background for multi-tasking. Rubin says the tablet will launch in “a while” and “literally this thing is like $10,000.” Let’s hope not, for everyone’s sake. Read more at Business Insider.
Google Launches The Nexus S, The Google Phone (The Wall Street Journal)
Google unveiled its new smartphone with Samsung, the Nexus S. It will be introduced in the U.S. in mid-December and sold exclusively at Best Buy for $199 with a two-year T-Mobile contract, and be sold for $529 without the subsidy. Google shifted strategies with this one to avoid disenfranchising carriers like it did with the Nexus One. And the company is taking another stab at the perception (encouraged by competitors) that Android is a fragmented platform with too little consistency between different hardware and versions. Read more of Matt Rosoff’s take at Business Insider.
Google Launches eBook Store To Compete In Digital Publishing (Seeking Alpha)
The competition in the eBook space is heating, with Google announcing Google eBooks and a new Google eBookstore which boasts more than 3 million titles. Unlike Amazon (Kindle) or Barnes and Noble (Nook), Google will rely on Internet-connected devices and the Android Market powering phones and tablets rather than launch a separate eBook reader. Read more at Business Insider.
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