THE GOOGLE INVESTOR: Google's Mobile Ad Sales To Reach $14 Billion By 2015

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GOOG Up With The MarketsĀ 
The markets opened higher as investors’ appetite for risk grows and home prices have risen for the first time in eight months, boosted by an annual flurry of spring home buyers. Shares of GOOG are up over 2% after being battered the last few days on the FTC antitrust investigation. Upcoming catalysts include second calendar quarter results released in July; continued Android momentum in the smartphone and tablet markets; regaining ground in China; updated software, adoption and media partners for Google TV; the roll-out of Google Music; and progress in other newer initiatives (+1, location-based services, mapping, gaming, Chromebooks, etc.). The stock trades at approximately 10.6x Enterprise Value / EBIT, inexpensive relative to peers and historical trading levels.UBS Pounds The Table Ahead Of Second Quarter Earnings (StreetInsider)
UBS reiterated its Buy rating and $765 price target on Google saying investors are overlooking some key investment themes and the shares have gotten too cheap. The FTC has been an overhang this year, but they have seen some affiliates recoup traffic. Mobile search traffic is up 5x with Android activations up to 400K per day. Google’s 2012 PE is at about 9x excluding-cash, too cheap.

Mobile To Reach $14 Billion For Google By 2015, Says Analyst (eWeek)
Google could earn as much as $14 billion from mobile-ad sales in 2015, or nearly half the $29 billion it banked in online ads combined in 2010, according to Canaccord Genuity analyst Heath Terry. The company’s mobile sales, largely driven by search and display ads served on Apple’s iPhone, as well as via smartphones based on the company’s Android mobile operating system, will comprise a robust $2.5 billion in 2011.

Google Gets Sued In France (Bloomberg)
The U.S. and the FTC are only part of Google’s recent troubles. The company is being sued in France by a local competitor over claims Google blocks rivals from reaping advertising revenue and gives preference to its own sites in query results. 1PlusV, a Paris-based web publisher, is seeking $421 million in damages and an order that Google post details of alleged “anti-competitive behaviour” on its French home page for three months. Other companies including Microsoft have joined with 1PlusV in asking for a review of Google’s practices.

Google Mobile Payment Partner Raises An Additional $24 Million (All Things Digital)
ViVOtech, a near field communication technology company being used by Google to enable Android users to tap their phones at registers to make a payment, has raised $24 million to top off its third round of funding. New investors Singapore’s EDBI, SingTel Innov8, and Motorola Solutions Venture Capital join a handful of existing investors. To date, the company has raised $90 million.

Daily Trader: Dinosaur Or Screaming Deal? (Seeking Alpha)
Like Microsoft’s 1990s suits, Google’s recent issues are likely a shorter-term problem and not a longer-term concern (Microsoft stock, I will point out however, has done nothing over the last decade). Google is also one of the NSA’s and the FBI’s biggest assets. The company is a cheap name with a 20% growth rate and a forward PE of only 12x earnings. Investors looking to play Google with fairly low risk compared to many alternatives could sell a January 2012 $480 put option for $39 representing an 8.12% return over the next 7 months.

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