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Casey Hoerth  

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  • Google's Cost Per Click Improvement Drives Stock Higher [View article]
    I don't think there was one particular statement behind this fact, but rather a tacit understanding of it after listening to a bunch of Google calls and in particular analyst comments and questions.

    Google doesn't like to disclose a lot of granular information regarding its search. You have to read between the lines a little bit: total search was up, revenue was well up. Desktop search grew slightly while mobile search exploded. Yet, Cost Per Click continued to decline. It was an inference I made but I'm confident enough to write it and the editors were confident enough to publish it.
    Jun 18, 2013. 10:50 AM | Likes Like |Link to Comment
  • Google's Cost Per Click Improvement Drives Stock Higher [View article]
    Hi kowtow,

    Unfortunately Google give us very limited disclosure. My original Google article goes over all the possible drains on ROIC, ROA as well as Asset Turnover. While the fiber and Google Glass projects are exciting, Google does not have a history of monetizing these things. Take Chrome and Android, for example. Ultimately I believe it is the non-monetization, along with some of the whacky projects, that is dragging these returns down.
    Jan 26, 2013. 03:21 AM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Hi Abe. I did double check and submit a correction. Looks like I was wrong on the Planetary Resources,
    Jan 11, 2013. 08:31 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Oh, no problem don't worry about it. It was actually 3AM over here when I made that first, semi-coherent reply...
    So... Microsoft and Google have very different focuses and business models. I actually like Google's better. Google's main source of profit is search ads and display ads, where Microsoft's is from selling software and its PC operating system. In my opinion its kind of tough to compare metrics with those different focuses.
    The one thing those two have in common is that their other businesses are distant seconds and often defensive plays to compliment their "bread and butter." I guess they are competitors, but not diametrically speaking.
    If I were to compare the two, however, I would say Microsoft's 14-some times earnings and 3.4% dividend give it a much greater margin of safety than one at 23+ times earnings and no dividend in sight.
    Jan 9, 2013. 10:23 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    ... What he said!
    Jan 9, 2013. 10:13 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Hi Modernis, that's a good question. I had considered that and decided that valuations with other search companies such as Yahoo would be neither helpful nor meaningful. We already know that Google is best of breed. Yahoo's numbers are all over the place, anyways.: I believe they had some unprofitable quarters recently. I didn't want to confuse or skew. As for Microsoft, search isn't their core business and their valuation is bases as a software company. There's always Baidu and Yandex but they're not much like Google as a company, either: they've no subsidized hardware to give away and their metrics should be better. Truth is that Google is really one of a kind and I felt it would take away from the insight of this article as well as waste my readers' time, which I really don't want to do.
    Jan 9, 2013. 02:20 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    You could be right, dude. That's why there's two sides to every trade and the price is what it is. My concern with 1-6 is how Google will monetize any of those. Thusfar they haven't had a good history of monetizing their non-search products. Apple has, conversely, done a great job at monetizing most of their products. This is, frankly, why they overtook GOOG's market cap in the first place. Maybe all the non-believers are out of the stock, but judging from the price momentum over the last six months there are probably a lot more loose apples that will fall out of the tree when it is shaken. I think the thing is that my article attracted a lot of other Google bears and we're all just hanging out here. Ha! But sentiment actually seems pretty good right now.
    Jan 9, 2013. 04:15 AM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Hi Wise Owl and thanks for the comment. I was expecting someone to bring up the law of large numbers, and I agree it has to be some kind of factor, too. Still, there was a time not too long ago when Apple and Google had the same market cap, and now Apple's is twice Google's. I don't know the secret to making something like that happen, of course, but it seems Page and Brim don't either. I guess my real concern is that I don't like how management is treating its shareholders and everyone else.
    Jan 9, 2013. 12:17 AM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Thanks John,

    500 would be a huge pullback. In fact that's where I bought it back then. I'd consider it if it did, but I'd really have to think before dipping back into Google.
    Jan 9, 2013. 12:11 AM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Thanks Sal!
    I listened to Cramer yesterday, too. I was hoping he would reiterate that we should sell Google into obvious strength, but he changed his call. Obviously, I think Cramer is wrong on this one.
    Jan 8, 2013. 09:29 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Thanks Guivi,

    I believe it will come down, as well. As an investor who was in Google for almost three years, I became frustrated with the diminishing returns as well as unwillingness to pay a dividend like, say, an Apple. At a trailing P/E of 23 I decided now was a good point to exit.
    Jan 8, 2013. 06:06 PM | 1 Like Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Indeed. I believe the question should be IF mobile catches up with desktop search in profitability. There's no guarantee that it will ever be as profitable. After all, disruptive change is kind of par for the course. Google did the disrupting 15 years ago. Maybe it's on the receiving end these days.
    Jan 8, 2013. 06:04 PM | 1 Like Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Thanks for pointing that out, Dan Seeks Alpha.

    I believe it is something the company invested in, but I'll look into it more closely, and if it isn't I'll submit a correction. This was another source I used. Admittedly, I just read the headline.
    http://bit.ly/UUHyql
    Jan 8, 2013. 06:00 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Thank you Piptief! When I wrote this article I was a bit fearful of creating "flame wars" because I know that many people love Google.
    Jan 8, 2013. 05:54 PM | Likes Like |Link to Comment
  • The Fundamental Case To Sell Google [View article]
    Hi Got That Swing,

    If their Chromebook strategy is anything like their Android strategy I would say that all signs point to "no" on big profits coming from new hardware. They will likely not try to monetize it but use it to increase penetration on other Google apps and of course search and display ads.
    Jan 8, 2013. 05:53 PM | 1 Like Like |Link to Comment
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