THE GOOGLE INVESTOR: Google Isn't A One Trick Pony, They've Bought Themselves A Horse Farm

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GOOG Up With Market
Shares of GOOG are up almost 2% in early trading. Upcoming catalysts include third quarter earnings announcement (Thursday, October 14, 2010 at 4:30pm ET), continued Android growth; the release of Chrome operating system this fall; regaining momentum in China; as well as progress in other newer initiatives (Google Me, gaming, social, etc.) The stock trades at approximately 14x Enterprise Value / EBIT, inexpensive relative to historical trading levels and the broader Internet group.

Google Isn’t A One Trick Pony, It’s a Horse Farm (The Motley Fool)
Google has been popular with growth investors, but now it has been popping up on value investors’ radars. In reality, the company is so much more than just a search tool, according to Joe Magyer and Tim Beyers. Firstly, the stock is cheap. Over the last few years, Google has quadrupled revenue, however price-to-earnings has fallen 75%. Despite hitting fundamentals, the stock has suffered. Secondly, search is far more important and flexible than investors think. It goes beyond the blank white page; if you want to create a playlist or a folder, that’s a search string. It’s a way to index everything that exists. They aren’t a one trick pony; they’ve bought themselves a horse farm. Some will be gimpy (Notebook) but some will be thoroughbreds (Gmail, YouTube, Android).

Google TV Is Finally Here (Google)
Let the hype begin!

  • And The Initial Partners Are… Underwhelming (The New York Times): Google announced first content partners for Google TV. Not surprising, the major television networks (ABC, CBS, Fox and NBC) will not participate, at least for the moment. However, several Internet companies and media outlets, including HBO, CNBC, Twitter, Netflix and Amazon, will work with Google to offer Web content and programming, and will allow on-demand viewing or build apps for TV screens.
  • Google TV Is Good. Very Good, According To Partner (Google Watch): Early reviews of Google TV have started rolling in. CEO Mike Hudack says: “It’s good. Very good.” The main reason? It finally combines traditional broadcast, cable and satellite TV with Internet video. has its bias, of course. The company is offering a version of its video publishing application optimised for Google TV. While it will take time for adoption, it does have most broadcasters on edge.
  • It Looks Good, But How Much Does It Cost? (Business Insider): According to Dan Frommer, Google TV is going to be costly. Which means most people probably won’t rush to pay it.  It will be built-in to some TVs (Sony, Samsung, etc.), but because there is an Intel chip involved, it’s probably going to be significantly more expensive than other sets. And the standalone Logitech Google TV box is rumoured to cost $300. So no matter how cool this thing is, it’s still too expensive for most people. Can someone please figure out how to do this without having to buy another box. (Netflix anyone?)

Chrome Gaining At The Expense Of Internet Explorer (Net Applications)
In what has become a familiar pattern, Google’s Chrome Web browser gained more market share through September and now sits at 8%, according to data from Net Applications. This month, Chrome took share from Microsoft’s Internet Explorer, which stands at around 60%. It will be important to watch how IE’s share fairs since the launch of IE 9 in September. Firefox gained a bit – climbing to 23% share, as did Apple’s Safari at 5.3%. Google claims Chrome has 70 million users, but the company expects that number to grow through a confluence of factors this fall (Google TV, Chrome OS, etc.).

Google Buys Predictive Keyboard Company (Bloomberg)
Google has acquired another company, BlindType. This company produces a badass predictive keyboard. Hopefully, for Android users, this means BlindType is going be built into the Android stock keyboard. Terms of the deal were not disclosed.

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