THE GOOGLE INVESTOR: Forget Nexus One; Android Is Kicking Butt

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Android on the iPhoneAndroid on the iPhone

GOOG Up Big Yesterday On Android News, But Giving Most Of It Back Today
GOOG shares were up about 6% yesterday on news that Android sales surpassed iPhone sales during Q110. So far today most of that has been given back as the shares are down about $4. Investors are still concerned with increasing costs, lack of focus (wind farms) as well as lack of secondary growth engines. Catalysts include resolution of the AdMob acquisition investigation, Android and mobile adoption as well as traction of newer initiatives (which up until now has been disappointing). The stock trades at approximately 19x 2010 EPS and 15x Enterprise Value / EBIT.Android Just Took The Number Two Spot From iPhone In Smartphone Sales (Business Insider)
For the first time last quarter, Android-based phones outsold the iPhone in the U.S. Google’s Android-based smartphones accounted for 28% of smartphone sales, while the iPhone accounted for 21%, according to market research firm NPD. Analyst Ross Rubin attributed the strong sales of RIM and Android phones to Verizon’s buy-one-get-one free deals. Android is now on dozens of handsets on each major carrier, so the strength makes sense.

Google Actually Gains Search Share Excluding New Changes (Piper Jaffray)
According to April comScore data, Google lost 70 basis points of U.S. search market share, declining to 64.4% from 65.1% in March. Piper Jaffray’s Gene Munster says the gains were mainly driven by Yahoo! and Bing slideshow products, a feature Google has not implemented. Excluding the addition of the slideshow mechanic, Google actually gained 60 basis points of share. Ultimately Munster believes that Google continues to operate the best search property in the U.S. and expects the company to largely maintain share in the longterm.  Dan Frommer at Business Insider highlights some other opinions.

Just Buy Salesforce.com Already And Dominate Cloud-Based Enterprise Apps (Business Insider)
Pascal-Emmanuel Gobry at Business Insider is making a great case as to why Google should buy Salesforce. The one area which he thinks has the most promise for Google is cloud-based enterprise apps. As the enterprise slowly moves from software to online services, Google is poised to capitalise on this trend. With Salesforce, the company would acquire: 1) the beachhead of enterprise apps and dominate this market and 2) a sales culture. If Google can pull off something like this, Gobry thinks they’ve got a great shot at building a business as big as search in enterprise apps.

Sprint Drops Service For Nexus One In Another Blow To Google’s Smartphone Model (Gizmodo)
Google just lost another partner for its Nexus One phone. Less than two months after Sprint announced it would support the Google phone, now Sprint won’t support the phone at all. Sprint is instead focusing its attention on Google Android-powered Evo 4G; a phone that is as fast as the Nexus One but also supports Sprint’s faster 4G wireless network. The good news for Google is that all of the carriers are still very excited about selling Android-powered phones. The bad news is that the big push behind the Nexus One and Google’s bid to seize power from carriers on the distribution end is a flop. Dan Frommer at Business Insider is calling for the company to kill the failed smartphone.

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