THE GOOGLE INVESTOR: Future Growth Could Be All About Mobile And Apps

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a ton of mobile phones

GOOG Up Strong As Market Strengthens
The market is up strong after China reassured the world it doesn’t plan to sell any holdings of its European debt. Shares of GOOG are up $10 (or 2%) to $485. That said, the stock has lagged this year as investors continue to have concerns with increasing costs, lack of focus (wind farms) as well as lack of secondary growth engines. Potential catalysts include news flow from the Bank of America Merrill Lynch Technology Conference on June 2, Android and mobile adoption as well as traction of newer initiatives (and there are quite a few). The stock trades at approximately 18x 2010 EPS and 14x Enterprise Value / EBIT.

Google To Dominate Apple In The Mobile Ad Market (TBI Research)
Apple has an early lead over Google in the mobile industry given strong iPhone and initial iPad sales, but in making calls to agencies, publishers, networks and mobile executives, Rory Maher at TBI Research believes that Google is poised to take a greater share of the mobile online ad market. He believes most analysts are currently underestimating Google’s mobile opportunity and the foundation the company is establishing, which should enable it to be a major player in the mobile ad market and could eventually represent a significant growth driver for the company.

Android Beating iPhone In China (Of All Places) (AdMob)
AdMob (a Google-owned company) broke down its monthly report on mobile device usage by country for Apple and Android devices. There are more iPhones than Android phones in every country (usually by a landslide, especially in Western Europe where the ratio is 10:1), except China. In China there were 882K Android phones compared to 725K iPhones. Nick Saint at Business Insider attributes Google’s strength to Apple having to compete with knock offs and Android can be loaded onto far cheaper phones, making the country a major outlier in the Android / iPhone race.

Google Sales Boss Sees Google Apps As Billion Dollar Business In 3 – 4 Years (TechCrunch)
Speaking at TechCrunch Disrupt, Nikesh Arora (Global Sales Operations and Business Development at Google) believes Google apps will become a billion dollar business in the next three to four years as the company capitalises on large corporations moving from desktop based systems to the cloud. Currently, Google’s app business is only a $50 million business on an annual basis. That’s some compound annual growth rate. Good luck.

Apple Facing Headwinds, And It’s Called Google (Seeking Alpha)
While everyone clamors about Apple’s reign over Microsoft, Garrick Hileman at Seeking Alpha believes Google will give Apple a run for its money. In fact, he believes the search giant could even come out on top. He sites several reasons why Google will win: 1) Android outsold iPhones in the first quarter; 2) the Google tablet is on the way; and 3) Google’s brand is more trusted than Apple’s. While these observations are all fine (and elementary), it’s going to take more than brand loyalty to dethrone Apple.

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