The Google Investor is a daily report from SAI. Sign up here to receive it by email
GOOG Up With Markets
Stocks are mixed in early trading, but recovered in the positive on news that Bank of America will increase dividends and share buybacks and on falling oil prices. Shares of GOOG are up with the rest of tech. Upcoming catalysts include Android momentum on smartphones and tablets; regaining ground in China and pushing into other emerging markets; updated software, adoption and media partners for Google TV; and progress in other newer initiatives (location-based services, mapping, gaming, etc.). The stock trades at approximately 14x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.YouTube Acquires Video Content Creator Next New Networks (Hollywood Reporter)
In the face of growing competition from Hulu, Netflix, Amazon and others, YouTube acquired online video production company Next New Networks to boost the quality of videos and help monetization efforts. While price was not disclosed, insiders estimate it was under $50 million. Next New Networks is behind dozens of branded networks. The company typically partners with folks who are creating popular and interesting online video and helps them take their productions to a higher level in terms of quality, popularity and profit potential. Looks like YouTube is getting serious about content creation.
Android Overtakes RIM As Leading Smartphone Operating System (comScore)
According to comScore, Android captured the leading ranking among smartphone platforms in the U.S. for the first time in January with 31.2% market share. RIM dropped to second place with 30.4% market share, followed by Apple with 24.7%. I didn’t think it was possible, but Microsoft, despite the launch of Windows Phone 7 in November, continued to lose share falling to 8% while Palm rounded out the top five with 3.2%. Read more from Matt Rosoff at Business Insider.
Google Now Going After Businesses In Social (eWeek)
Continually making improvements to the recent release of Google Profiles, a spokesperson says that it’s “more for businesses that want to set up profile pages. Stay tuned, we’re working on more features for profiles over time.” Clearly an obvious move against Facebook and Twitter, but profiles for businesses would mark another step in the evolution of Google’s local search strategy. That actually makes sense as a complement to Hotspot and Google Places.
Google Buys Comparison Shopping Site (All Things Digital)
Google shelled out ~$60 million for BeatThatQuote, a U.K. company that lets consumers compare and apply for lower rates and cheaper prices on various services and products (financial, insurance, legal assistance, utilities and merchandise). It was the fastest growing website in the U.K. in 2007, eclipsing the number of pageviews generated by popular social networks, including Facebook.
Move Over AOL, YouTube Snags Another Media Executive (All Things Digital)
YouTube is still trying to figure out how to link up with Hollywood. Maybe Alex Carloss will help. Until last week, Carloss was head of digital distribution at Viacom’s Paramount. Now he’s a Google employee, working on YouTube’s content acquisition team. He’ll work with Robert Kyncl, the Netflix veteran Google hired last year to figure out its strategy for working with Hollywood and other professional content-makers, which have yet to give the giant site all the video it wants.
Top Fund Managers Cut Stakes In Google And Apple In The Fourth Quarter (Reuters)
Nervous analysts have worried for years that the stellar stock prices of technology giants, such as Google could tumble back to earth. Now some top hedge fund managers like Steve Mandel and Lee Ainslie appear to be acting on those concerns. Along with a bevy of other funds, both Lone Pine Capital and Maverick Capital cut their stakes in Google (and Apple) in the fourth quarter. Investors are increasingly worried about the challenges Google faces from social-oriented sites like Facebook, Twitter and Groupon.
It Got Ugly In Tech Yesterday: Google Closed Below $600, First Time Since 2010 (The Wall Street Journal)
Among the low lights, Google is down more than 12, or about 2.1%, to trade decisively below 600 at 587.83. Google has traded below 600 on March 1 and 2, but each time it mustered higher to finish the day just a notch above that level. It had similar bouts with sub-600 at the end of January. It has not closed below 600 since the last trading day of 2010.