Kris Tuttle

Verizon's Droid Is the Real Deal

Steve Jobs is said to be a pretty polarizing individual. That's good and bad sometimes. Apple seems to have made an enemy of Verizon which is an important member of the ecosystem. AT&T is a good partner but is that what Apple really wants?

If Verizon can execute well (a big question I know) they can create a pretty powerful "not the iPhone" choice for consumers, particularly Verizon FiOS customers.

Until recently Apple has had an "easy schedule" of games to play. Microsoft has been crippled by their own lousy execution and Vista, Google hasn't had a mobile offering, Nokia has been MIA on smart phones forever and RIM is great but too tied to business users to get in their way.

Now we have what looks like a decent platform with Android coupled with good phones from Motorola and others and a Microsoft that may have a decent product cycle in front of them.

Doesn't have to be a bad thing for Apple to have some decent competition. Maybe their products will get even better, even faster. Everyone should love a challenge.

How Big Will Android Get?

Everyone should just do their own market forecast. Then if we aggregate them we'll know the future!

Motorola Doubles Down on Android

Feels like MOT did the right thing here. They were not going to compete with Apple or Nokia or RIMM and win on their own.

Google is the company with the most mojo now and if MOT can tap into that energy they can be effective against the other players. If you are a Google user the MOT phones may stack up better than RIMM for traditional productivity use. Nokia has their own clueless approach plus an alliance with Microsoft so.... nothing.

It still remains to be seen how effectively MOT senior management can get out of their own way this time around. This company seems to shoot itself every time things are looking up. Maybe this time they will do less damage.

[Disclosure: We are long a little MOT in our "research proving ground fund" over at R2.]

Motorola's Cliq Builds on iPhone Concept

How about "communicator?"

I know it's tainted by having been used in Star Trek but it seems to fit.

video, email, messaging, status updates, location, phone - all sounds right

Expecting a Sell-Off: 35 Ways to Protect for Less

If you are concerned about the general market but still wanting to stay long the individual stocks that are most attractive one could short the closest index: SPY, QQQ, SMH to provide a cushion. If they underlying stock selection is good then even if the pullback doesn't come you should stay in positive territory. Then you can adjust your short position in the index as you see fit. Covered calls are also okay but they cut both ways and you can still lose quite a bit of capital with them. Unless you set up a stop loss with a buyback of the (much lower) call options at a certain threshold.

Senior Google Executive Leaves for AOL...Why?

Another potential interpretation of the facts could be that if he works a miracle on AOL he could be in line to run all or a major part of TWX as president or something.

(I don't know the situation well, just pointing out the logic.)

Staying Cool on Palm, For Now

Seeking Alpha deleted the link to the full report but you can find it over on our blog at www.research2zero.com/.../ and look at the Palm update there.

The Short Case for Amazon.com

I've heard that AMZN is "just a retailer" arguments for about a decade now. It's true of course but if you're going to analyze the stock from that perspective you are likely to get your head handed to you.

Amazon has fundamental differences from typical retail stocks as well as big differences from raw technology names like RIMM, GOOG and AAPL.

A simple-minded approach to these names just doesn't work very well. We agree that valuation matters and over the long term these companies are judged on their long-term returns on invested capital.

The disruptive theme can push the stock fairly high. If the market comes to believe that books are ready to go the way of the newspapers (I'm not sure I agree) then the leaders in the eBook segment will do very well. Because Amazon is in the book and media business they stand to gain or lose the most from the move. (Sony is strong in the technology but it won't move the needle either way there.)

So if you want to play in AMZN I think you need to do A LOT more work, including understanding their cloud-based technology and service businesses.

The move from $50 to $66 was pretty abrupt so I can understand the desire to put a short on but it's really a trading call.

Does Google Care About PCs?

The one thing that I could see Google doing in this area is an extension of the "Google Desktop" which addresses the Linux OS space more intimately.

This is only interesting to me because of the emerging netbook market. Most seem to be going with XP on the devices now or some versions of Linux. Since most of these are planned to work on the net and use it heavily it opens the door to a deeper Google footprint. Might it include an OS? Probably not is my guess but it's not impossible.

Leaving Google in No Man's Land

I think the average investor perceives far more moving parts at Google than at Apple or Research in Motion. When technology stocks like these go down many investors can't maintain or get the conviction back to buy and hold the name. The simpler the story, the easier it is to get it back and become convinced. To me Apple is the clearest even though people are confused about the iPod transition that may happen this year.

Even though the bulk of Google revenue comes from advertising the number of products, initiates and markets they are in is hard for investors to fully grasp. Even harder for them is knowing if companies like Microsoft, Amazon or eBay are doing something that might hurt prospects for Google.

On top of it analysts cut near-term estimates and price targets based on the latest news blip. This causes investors to wonder about the long-term story even though it is not changed. For the record we established a fundamental valuation on Google a few months ago of $800 per share. Since nothing has changed the fair value estimate remains the same.

Market sentiment and near-term news and noise will push the stock around but unless one doubts the fundamentals of the Internet one would want to own the stock at these levels.

Will Better Browsers Pose a New Worry for Google?

I think the power of the browser is something that might be latent and could mark a change in the dynamics of the search market.

Google Audio Ads Have Yet To Take Off

There are two obstacles that one can see right away:
1. Radio advertising is very expensive, especially if you are a national rather than regional company.
2. Creating a quality radio spot seems to involve some services from a professional production company that creates another expense.

The $400 credit is nice but it sounds like one will be spending a few thousand on any radio campaign compared to a few hundred for AdWords.

We are still considering trying radio for the learning experience but the cost/value equation doesn't look nearly as good as what we get today from online advertisements.