A sell-side analyst's thoughts on Google's analyst day

| About: Alphabet Inc. (GOOG)

American Technology Research analyst Mark Mahaney attended Google's analyst day yesterday. His reaction:

What to make of an Analyst Day where the corporate chef makes a presentation but the CFO does not? The unconventional character of Google continues...

Management provided a strategic overview of the company. Among the main topics were Google's competitive advantages, its broad investment approach (70% core products, 20% related products, and 10% exploratory projects), its employee recruitment and retention strategy, its Beta products, and its sales & marketing strategy. As expected, there was no material new financial disclosure. One thing missing was a presentation on Google's perceived market opportunity. The big picture answer is targeted advertising, but it would have been helpful to have Google formally articulate this.

For the positive takeaways, we would list: 1) a product development process that appears highly rigorous and disciplined; 2) a recruitment process that also appears highly rigorous and disciplined; 3) a business model that doesn't appear to face strong near-term margin pressure; 4) some new products like Google Maps that appear truly cutting edge; and 5) the disclosure that 227 of the Fortune 1000 now advertise with Google -- this is a glass-quarter-full opportunity to us. For the negative takeaways, we would list: 1) a general lack of specifics, 2) a specific lack of specifics when it comes to the financial screens GOOG is using to make business decisions; and 3) the chef talking instead of the CFO...

We went into the meeting with eleven specific questions. Most of these were raised in one form or another, and most of them were generally addressed. But, again, very few specifics. So at the margin, our view of the company and the stock remains unchanged. We reiterate our Buy rating and our $275 price target.

GOOG chart below.