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Tue, Jan. 12, 5:08 PM
- Re/code reports Google (GOOG, GOOGL) is "forming its own dedicated division for virtual reality computing."
- Clay Bavor, previously in charge of both Google Apps (Gmail, Docs, Drive, etc.) and the Cardboard VR platform, is now solely running the VR unit. Diane Greene, the Google board member whose startup (Bebop Technologies) was recently acquired by the company for $380M, will now be in charge of apps.
- Google already has a healthy VR presence - Cardboard (relies on Android phones to work, supports cheap hardware) has received a measure of developer support, and YouTube has become a popular source for VR-friendly 360-degree videos. However, Facebook's (NASDAQ:FB) Oculus unit is widely seen as having a hardware technology lead in the nascent market, and has won the support of numerous developers. Oculus announced last week the first consumer Rift VR headset (requires a PC with a powerful GPU) will sell for $599 and begin shipping in late March.
- Separately, Google has announced its annual I/O developer's conference (typically features a slew of product announcements) will be held this year from May 18-20 in Mountain View, CA.
Fri, Jan. 8, 12:37 PM
- Reuters reports the NFL plans to stream all three of next year's London games online, and is in talks with Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) about streaming rights.
- Yahoo streamed an October London game between the Bills and Jaguars, and reportedly paid $20M for the right to do so. An average of 2.36M viewers were watching the stream at any given time, and 15.2M watched at some point.
- Back in 2013, it was reported Google met with the NFL about obtaining the rights to the NFL's Sunday Ticket package. However, the NFL would up extending its Sunday Ticket deal with DirecTV. Apple was once rumored to be interested in the rights to English Premier League broadcasts.
Dec. 30, 2015, 3:59 AM
- Google Glass has finally gotten its long awaited makeover. A new FCC filing reveals a reboot of the device, called GG1, although it still may be some time before it's ready for consumer release.
- What's new? It lacks a nose-bridge, has foldable arms, does not fully wrap around the users' face, and contains improved tech specs (processor, battery life and wireless connectivity).
- The biggest feature: The initial version of glass, which sold for $1500, prompted a widespread privacy backlash because of the inability to see when the device was recording, but the new gadget will see a green light come on when it's capturing video.
Dec. 28, 2015, 1:45 PM
- Encouraged by Q4 figures and commentary from major search engine marketing firms (SEMs - they handle search ad spend from a variety of clients), Axiom Capital's Victor Anthony has hiked his his Alphabet/Google (GOOG +1.4%, GOOGL +1.6%) target by $100 to $1,000.
- Anthony notes major SEM firm iProspect saw its Google ad spend rise 26% Y/Y in Q4, up from Q3's 2% and Q2's 12%. Peers RKG and IgnitionOne respectively saw 21% and 18% Q4 spending growth, up from 18% and 14% in Q3.
- He adds all three firms "have seen zero impact from ad blockers on search," and indicated Google search ad spend "is likely to grow near current growth rates in 2016." They also don't expect social media ad spend (currently dominated by Facebook) to take share from search.
- Anthony's Q4 revenue and EPS estimates have been upped to $21.21B and $8.21, his 2016 estimates to $87.64B and $35.19, and his 2017 estimates to $102.85B and $44.12. All three sets of estimates are above consensus. The hike comes two months after Google reported its paid clicks rose a stronger-than-expected 23% Y/Y in Q3, with clicks on Google sites (lifted by mobile search and YouTube) rising 35%.
- Alphabet/Google is higher on a day the Nasdaq is down 0.3%. With the year almost ever, the Class A shares (NASDAQ:GOOGL) are up 47% YTD, and the Class C shares (NASDAQ:GOOG) up 44%.
Dec. 23, 2015, 4:23 AM
- Google is building a new messaging app that enables users to text friends or a chatbot, which will search the web and other information sources to answer a question, WSJ reports.
- Although it's still unclear when the company will launch the platform, it sounds like it's meant to directly compete with Facebook M, a bot that Facebook is testing inside of Messenger.
- Google is also likely to allow other developers to build chatbots that run on the service.
Dec. 22, 2015, 12:20 AM
- Yahoo Autos reports Google/Alphabet (GOOG, GOOGL) and Ford (NYSE:F) are creating a JV that will build self-driving cars using Google's technology. The companies reportedly plan to announce their effort at CES (runs from Jan. 6-9).
- The JV, which limits Ford's legal liability, is said to be non-exclusive. Google has also been talking with other automakers, as it pushes forward with a goal of bringing a self-driving car to market by 2020. The company has suggested it doesn't want to be an auto manufacturer itself, but rather a hardware/software supplier to third-party automakers.
- The report comes a week after one from Bloomberg stating Google plans to make its self-driving car unit a separate Alphabet company. In September, Google hired ex-Hyundai America chief John Krafcik to lead its self-driving efforts.
- Google has a head-start in both creating advanced self-driving systems/prototypes and collecting real-world driving data - it has logged 1.3M miles to date - but is far from alone in going after the market. Mercedes-Benz, BMW, Nissan, Volvo, and Tesla are among the existing automakers to have invested in autonomous driving R&D. Baidu, Samsung, and Uber are also interested, and Apple reportedly so.
- Last week: Ford wins permit for public testing of self-driving cars
Dec. 20, 2015, 6:21 PM
- Not surprisingly, a Nielsen study on the most popular 2015 U.S. smartphone apps found the core Facebook (NASDAQ:FB) app to be #1, with an estimated 126.7M average monthly unique users (+8% Y/Y). Facebook Messenger was #3 (96.4M users, +31%), and Instagram #8 (55.4M, +23%).
- YouTube (GOOG, GOOGL), was #2 with 97.6M users (+5%). Google Search was #4 (95.4M, +3%), Google Play #5 (89.7M, +7%), Google Maps #6 (87.8M, +8%), and Gmail #7 (75.1M, +4%).
- Apple (NASDAQ:AAPL) had the last two spots in the top-10, via its Music app (54.6M users, +26%) and Apple Maps (46.4M, +16%).
- Nielsen estimates 52.6% of U.S. smartphone users are on Android, and 42.7% using an iPhone. Smartphone penetration (as a % of mobile subscribers) is pegged at 80% as of September, up just slightly from 78% at the end of 2014.
- Though now claiming less than 1/6 of the world's ~1.8B smartphone users, the U.S. remains disproportionately important from a digital advertising standpoint. Facebook received 50% of its Q3 revenue from North America; Google/Alphabet received 47% of its Q3 revenue from the U.S..
- Last year: Flurry estimates Google/Facebook account for 35% of U.S. mobile usage
Dec. 17, 2015, 4:43 AM
- Google plans to make its self-driving cars unit, which will offer rides for hire, a stand-alone business under the Alphabet (GOOG, GOOGL) umbrella next year, Bloomberg reports.
- The service could be launched in San Francisco and Austin, where it has tested the cars extensively, and could be first deployed in confined areas like college campuses, military bases or corporate office parks.
- Alphabet's driverless car project started in 2009 with the aim of building a self-driving vehicle by 2020.
Dec. 8, 2015, 4:06 PM
- Chicago (population of 2.7M, metro area of 9.7M) and Los Angeles (population of 3.9M, metro area of 18.6M) would easily be the largest cities in which Google/Alphabet (GOOG) offered Fiber's pay-TV and gigabit broadband services, should it do so. (Google blog post)
- To date, Fiber has been launched in Kansas City, Austin, and Provo, and has been promised to launch in Atlanta, Nashville, Raleigh-Durham, Charlotte, San Antonio, and Salt Lake City. In addition to Chicago and L.A., Phoenix, San Diego, Irvine, San Jose, Jacksonville, Tampa, Oklahoma City, Louisville, and Portland are on the list of potential Fiber cities.
- The latest announcement follows the Alphabet restructuring, which puts Fiber i a separate division from core Google. It also shortly comes a day after AT&T said it would bring its GigaPower broadband service to 38 more metro areas, including several potential Fiber cities.
Dec. 3, 2015, 10:14 AM
- The WSJ reports YouTube (GOOG -0.1%) is talking with studios to license TVs and movie shows for its $10/month Red subscription service. Former MTV and Netflix execs are reportedly involved in the effort.
- Unlike Netflix, Amazon, or Hulu, YouTube isn't looking to license shows and movies that have already aired elsewhere, but rather brand-new material. A source states the content could be either exclusively streamed on Red or simultaneously released via movie theaters, TV networks, DVDs, etc.
- Red, which launched in October, combines ad-free YouTube with offline downloads, the Google Play Music streaming service, and exclusive access to some YouTube-financed content. Hollywood content licenses would further up Google's investment in the service, which many suspect is being sold at a loss given its price is on par with that of popular standalone music streaming services such as Spotify and Apple Music.
Dec. 1, 2015, 1:22 PM
- RBC's Mark Mahaney (Outperform rating, $880 target) believes Google's (GOOG +2.6%, GOOGL +2.4%) improved financial transparency following the Alphabet restructuring will drive higher multiples - one could argue it already has - and that the company could ultimately be worth $1,000/share or more on a sum-of-the-parts basis.
- Mahaney notes core Google (features search, display ads, Maps, Google Apps, YouTube, and Android) has seen 17%-23% Y/Y organic growth each quarter for the last 3 years, and estimates the business has a near-50% op. margin. He sees YouTube and Android (estimated 2015 revenue of $7B and $4B, respectively) helping sustain the core Google's growth.
- Among non-core assets, Mahaney argues Nest and Fiber are each set to produce over $1B/year in revenue, and that other businesses (e.g. self-driving cars, the Calico anti-aging unit) could also produce substantial value. He estimates Google's non-core assets will have a 2015 op. loss somewhere between $3B and $6B, and sees a major opportunity to cut costs under new CFO Ruth Porat (previous).
- Separately, Barclays' Paul Vogel argues Google/Alphabet, Amazon, and Facebook will perform well again in 2016. All three companies have easily outperformed the Nasdaq this year.
- Both the voting Class A (NASDAQ:GOOGL) and non-voting Class C (NASDAQ:GOOG) shares have made new highs. The former are up 48% YTD, and the latter up 45%. The Class A and C shares now respectively trade for 23x and 22x 2016 EPS consensus estimates.
Nov. 24, 2015, 3:59 PM
- The WSJ reports Alphabet (GOOG -0.9%) will start charging subsidiaries such as Google Fiber, Google Life Sciences, and Google X (long-term projects) for services such as computing (servers), recruiting, and marketing.
- The accounting move aims to make various parts of Alphabet/Google's empire more accountable for their spending, following years of major investments in high-risk/high-reward projects. The report comes four months after one noting new CFO Ruth Porat has begun "an internal audit examining costs, revenue and accounting systems," and that new hiring restrictions are in place.
- Soon after that, Google posted a Q2 EPS beat made possible in part by spending controls. Porat stated on the Q2 call Google plans to direct ~70% of its spending towards its core business, ~20% towards adjacent areas, and ~10% towards big new ideas.
- A source tells the WSJ Alphabet hopes to eventually "be a family of companies that offers efficient, centralized services to help entrepreneurs grow businesses faster." Over the weekend, The Information reported talks with Autodesk CEO Carl Bass to make Bass the head of Alphabet's robotics unit fell through partly because of disagreements over how much control Bass would have over the unit.
Nov. 23, 2015, 2:47 PM
- Goldman Sachs' Hedge Fund VIP list of the 50 most-heavily-owned stocks have trailed the S&P 500 by about 500 basis points (down 2% vs. the S&P's 3% gain) year-to-date, including 720 basis points of underperformance since the start of October (down about 8% vs. down about 1%).
- Call it the Valeant effect: Health-care stocks have accounted for about 70% of the year-to-date 2% decline.
- Based on the most recent filing, hedge funds are bailing on some of their poorer performers, including Valeant (NYSE:VRX), HCA Holdings (NYSE:HCA), Endo (NASDAQ:ENDP), Ally Financial (NYSE:ALLY), and NorthStar Realty (NYSE:NRF), and have instead placed bets on Baidu (NASDAQ:BIDU), Mylan (NASDAQ:MYL), MGM Resorts (NYSE:MGM), and GE.
- After the shakeup, the top five hedge fund hotels: Allergan (NYSE:AGN), Facebook (NASDAQ:FB), Alphabet (GOOG, GOOGL), Time Warner Cable (NYSE:TWC), and Amazon (NASDAQ:AMZN).
Nov. 23, 2015, 1:22 PM
- Down on Friday after providing soft FQ4 sales guidance and an FY16 subscription/billings guidance cut to go with an FQ3 beat, Autodesk (ADSK +3.9%) has more than recovered its losses today.
- A weekend report from The Information may or may not be playing a role: The site states Autodesk CEO Carl Bass recently talked with Larry Page about becoming the head of Google parent Alphabet's (GOOG, GOOGL) robotics unit. The talks are said to have fallen through "for a mix of reasons," including the amount of control Bass would have over the unit.
- Sources talking with The Information argue rejections such as Bass' point to an "inherent weakness" in Alphabet's structure: The company still isn't providing its non-Google operating units (they include Nest Labs, Calico, Google Ventures, Google Capital, and A.I. unit DeepMind) the kind of autonomy sought by many entrepreneurs.
- Andy Rubin, the former head of Google/Alphabet's robotics unit and before that its Android chief, left last year. The WSJ reported at the time Rubin was "facing constraints on his activities at Google." Google/Alphabet has made a string of robotics acquisitions in recent years.
Nov. 19, 2015, 5:21 PM
- Google (GOOG, GOOGL) has bought Bebop Technologies, a stealth-mode startup that has been working on an enterprise cloud app development platform, and which was founded by VMware co-founder and Google board member Diane Greene.
- Greene will now lead a new unit containing all of Google's cloud businesses, including Google Apps (productivity apps), Google for Work (custom versions of Google products for enterprises), and the Google Cloud Platform (cloud infrastructure and app platform services). CEO Sundar Pichai declares the move will "bring together product, engineering, marketing and sales and allow us to operate in a much more integrated, coordinated fashion."
- Pichai provides some vague details regarding Bebop: "[B]ebop is a new development platform that makes it easy to build and maintain enterprise applications ... bebop and its stellar team will help us provide integrated cloud products at every level: end-user platforms like Android and Chromebooks, infrastructure and services in Google Cloud Platform, developer frameworks for mobile and enterprise users, and end-user applications like Gmail and Docs."
- The move comes shortly after Google SVP Urs Hölze proclaimed (in remarks that may or may not have been blessed by Google's brass) the company's Cloud Platform revenue could surpass its ad revenue in five years. With 90% of Google's Q3 revenue coming from ads (and much of the rest from hardware, Google Play, etc.), that could prove a tall order.
- Rackspace (NYSE:RAX) fell 6.1% in regular trading, with Hölze's remarks having been mentioned as a potential culprit. Stifel defended Rackspace, arguing the remarks were misunderstood and that Rackspace will eventually strike a deal to provide managed services for Google's cloud offerings, much as it has with Amazon and Microsoft.
- Synergy Research estimates Google is the 4th-largest player in the in the broader market for public, private, and hybrid cloud services, trailing IBM, Microsoft, and 800-lb. gorilla Amazon. The company has tried to differentiate its cloud offerings by emphasizing developer needs; the Bebop acquisition fits with that effort.
Nov. 19, 2015, 9:28 AM
- A month after announcing a partnership related to Microsoft's Azure public cloud platform, Akamai (NASDAQ:AKAM) states it's partnering with Google (GOOG, GOOGL) to create direct interconnects foir in-region traffic going between Google's public cloud infrastructure and Akamai's global CDN.
- The tie-up is promised to "reduce hosting and egress costs and improve performance for Akamai customers taking advantage of Google Cloud Platform." Up to a 66% reduction in Google egress costs is promised.
- Google is believed to be a top-4 public cloud infrastructure/app platform (IaaS/PaaS) services provider, along with Amazon (easily the market leader), Microsoft, and IBM. Amazon offers a proprietary CDN service known as CloudFront.
- AKAM +1.3% premarket to $59.99.
Alphabet Inc through its subsidiary Google Inc is engaged in improving the ways people connect with information & products including Search, Android, YouTube, Apps, Maps & Ads. It also produces internet-connected home devices & provides internet services.
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