The Google Investor is a daily report from SAI. Sign up here to receive it by email
GOOG Down With Tech
After earnings last week, shares of GOOG rose nearly 11%; the biggest gain since 2008. Shares continue to trade well above $600 (although down over $4 in early trading) as the market shakes off mixed earnings reports. Upcoming catalysts include continued Android growth; the release of Chrome operating system; regaining momentum in China; as well as progress in other newer initiatives (Google Me, gaming, social, etc.). The stock trades at approximately 16x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.
Integrated Will Trump Fragmented Every Time, Says Jobs (Fortune)
On last night’s Apple earnings call, Steve Jobs (who never participates on the quarterly call and, quite frankly, stole the show) made an impassioned attack on Android and forceful defence of Apple. Highlights of his rant:
- Google’s numbers: “Unfortunately, there is no solid data on how many Android phones are shipped each quarter.”
- Google’s claim that iOS closed: “We find this a bit disingenuous and clouding the real difference between our two approaches.”
- The fragmentation of the Android OS: “TwitterDeck [TweetDeck] … recently reported that they had to contend with more than 100 different versions of Android software on 244 different handsets.” The company has since denied those comments.
- The competing Android app stores (Jobs counts at least four): “This is going to be a mess for both users and developers.”
- The virtues of Apple’s approach: “When selling to users who want their devices to just work, we believe integrated will triumph fragmented every time.”
- The problem with 7-inch tablets: “It is meaningless, unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of the present size.”
- The problem with Android as a tablet OS: “What does it mean when your software suppliers says not to use their software in your tablet? And what does it mean when you ignore them and use it anyway?”
- Bottom line: “We think the current crop of seven-inch tablets are going to be DOA, Dead on Arrival. Their manufacturers will learn the painful lesson that their tablets are too small and increase the size next year, thereby abandoning both customers and developers who jumped on the seven-inch bandwagon with an orphan product. Sounds like lots of fun ahead.”
Google Figuring Out Local, Needs To Buy FourSquare (Mashable, Business Insider)
Google has placed location and location-based search front-and-centre in its search engine. The biggest change being the user location setting is moved to the left-hand panel of the results page. This feature automatically detects your current location and tailors search results based on that. Now that Google has put Marissa Mayer in charge of location services, the company is finally taking location seriously. According to Henry Blodget at Business Insider, now Google needs to write a check for Foursquare, before it’s too late.
Google Has No Incentive To Innovate, Says Zuckerberg (Google Watch)
Facebook CEO Mark Zuckerberg was quite clear about what he thinks of Google when he helped introduce the social search integration between Bing and Facebook. While he didn’t directly name Google, his comments on why he chose Bing to be the first search engine he opened detailed Facebook data to were clear on how he feels. From what Zuck said, it could be inferred that he views the King Kong of search as the incumbent who has had its best day in the sun, but not as an ideal partner for Facebook. Call me crazy, but it could simply boil down to Microsoft’s $240 million investment in the “startup.”
Google Stock Going To $2,000 Says Columnist (MarketWatch)
Cody Willard at MarketWatch is at it again; Google $2,000. Although he wouldn’t chase the stock today, he bets that at some point in the next year, Google will continue the unstoppable tear its on. And he’ll write an article that states how he’s been pounding the table and why investors should be long the stock. That’s fine and all and considering there’s no time limit to his price-target, it will likely be true one day. But like Henry Blodget says, right now, Google is still a one trick pony.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.