Tue, Feb. 23, 1:54 PM
- In a marquee win for Google (GOOG -1.5%) in its battle against cloud infrastructure giant Amazon Web Services (AWS), subscription music streaming leader Spotify (Private:MUSIC) has announced it's migrating its infrastructure to the Google Cloud Platform.
- Spotify, which has historically relied on its own servers: "The storage, compute and network services available from cloud providers are as high quality, high performance and low cost as what the traditional approach provides. This makes the move to the cloud a no-brainer for us. Google, in our experience, has an edge here, but it’s a competitive space and we expect the big players to be battling it out for the foreseeable future."
- The company adds Google's unmatched data platform and tools were a big selling point. "Good infrastructure isn’t just about keeping things up and running, it’s about making all of our teams more efficient and more effective, and Google’s data stack does that for us in spades." Spotify VP Nicholas Harteau says his firm has already moved 250K of its 20M user accounts onto Google's cloud, and will migrate its entire service to Google within 18 months.
- Spotify never mentions AWS in its announcement. However, the company is listed on Amazon's (NASDAQ:AMZN) site as a client. Per Amazon, Spotify has used AWS' S3 storage service to store music tracks, and its CloudFront CDN service to deliver apps and software updates.
- The deal comes a few months after Google put VMware co-founder Diane Greene in charge of its cloud businesses, following the acquisition of a startup Greene founded (Bebop Technologies).
- Synergy Research estimates Amazon still had over 30% of the broader market for public, private, and hybrid cloud infrastructure and app platform services, a share over 3x that of #2 Microsoft. IBM was ranked #3, and Google #4.
Tue, Feb. 23, 3:21 AM
- Alphabet (GOOG, GOOGL) is shuttering Google Compare, its U.S. comparison-shopping site for auto insurance, credit cards and mortgages after one year, WSJ reports.
- The quick reversal is a setback to the company's efforts to provide consumers with niche shopping and financial-services tools, and follows the demise of a similar website called Google Advisor that was shuttered in 2011.
- Other sites that let consumers compare rates on financial services have seen a recent surge in investor interest. Shares of LendingTree (NASDAQ:TREE) are up 55% over the past year, while Bankrate (NYSE:RATE), up 2% in the past year, could also benefit from Google’s move.
Fri, Feb. 19, 11:36 AM
- Digging through this week's 13F filings, Evercore ISI's Pankal Patel and team attempt to separate the holdings of hedge funds and other active managers.
- What they found were that institutions (active managers) were most overweight Wells Fargo (NYSE:WFC), IBM, and Coca-Cola (NYSE:KO). Two new names on the overweight short-list: Level 3 Communications (NYSE:LVLT) and Zimmer Biomet (NYSE:ZBH).
- Hedge funds, on the other hand, were most overweight Time Warner Cable (NYSE:TWC), Priceline (NASDAQ:PCLN), and Netflix (NASDAQ:NFLX). Hedge funds also added to holdings of AIG, Humana (NYSE:HUM), Alphabet (GOOG, GOOGL), and EMC during Q4.
- Also of interest: While consumer discretionary stocks (NYSEARCA:XLY) continue to be the top over-weighted sector for hedge funds, they pulled back from those names considerably during the quarter, and added to tech (NYSEARCA:XLK) in a big way. They also added to their underweight in the consumer staples stocks (NYSEARCA:XLP).
Tue, Feb. 16, 10:26 AM
- The trend of "modular finance" in which technology forces financial firms to be best of breed for each product and cuts the advantage of being "full service" hasn't spread to insurance, says Citi's Todd Bault, noting the interconnected and hard-to-automate nature of the industry.
- "While it is clear that P&C insurance fails modularity in several ways (e.g. business is sold in programs, not lines of business), AIG superficially seems modular (Life vs. P&C), but has an extensive history of interconnectedness that is a bigger problem than it seems."
- What the insurance industry (and AIG) may need, says Bault, is a tech firm like Alphabet (GOOG, GOOGL) teaming with an investment bank to buy AIG and turn it into an insurance FinTech lab.
Thu, Feb. 11, 4:16 PM
- Google/Alphabet (GOOG -0.1%) is developing a VR headset that doesn't need to be paired with a PC, phone, or console, the WSJ reports. The company is also reportedly working on a more advanced version of its ~$20 Cardboard VR viewer, which relies on Android phones to provide a headset's CPU, display, sensors, and software. The Cardboard successor is said to be made of plastic, and to contain chips and sensors.
- The report follows one from the FT stating Google is building a new VR headset for smartphones that will "feature better sensors, lenses and a more solid plastic casing" than Cardboard. It also follows Google's creation of a standalone VR unit led by former Google Apps chief Clay Bavor.
- Facebook, whose Oculus unit is generally seen as having an early hardware/software lead in the VR market, is due to begin shipping its first commercial Oculus Rift VR headset next month - it costs $599, and needs to be paired with a PC featuring a high-end GPU. Oculus has also partnered with Samsung to launch the less powerful Gear VR headset - it costs $99, and needs to be paired with a Samsung smartphone.
- Meanwhile, the FT has reported Apple has created a large VR/AR team, and built headset prototypes. Apple (unsurprisingly) hasn't confirmed or denied anything, but Tim Cook did provide positive remarks about the VR market's potential during Apple's January earnings call.
Wed, Feb. 10, 2:48 AM
- A significant barrier to Google's (GOOG, GOOGL) plan to put driverless cars on the roads has been removed, after the NHTSA supported its interpretation that a robot could meet the legal definition of a driver.
- Google has also filed for another potential use of its artificial intelligence system in a patent award that described an "autonomous delivery platform" for trucks.
- The driverless transport vehicle would carry several lockers that could only be opened by the recipient of a package, using a PIN code or credit card.
Tue, Feb. 9, 5:03 AM
- Google Chief Executive Sundar Pichai has received a stock award valued at $199M, lifting his equity stake in Alphabet (GOOG, GOOGL) to more than $600M, while making him one of the world's highest-paid executives.
- The grant appears to be part of an effort to hold on to Pichai, who last year took responsibility for businesses that generate about 90% of Alphabet's revenue and an even larger percentage of its profit.
- Pichai's salary is not known, however, because he wasn't included as an executive officer in Google's annual proxy statement, although that may change next time around.
Wed, Feb. 3, 2:45 PM
- Amit Singhal, Alphabet/Google's (GOOG -3.7%, GOOGL -3.6%) SVP of search and a long-time employee, is retiring. He'll be replaced by John Giannandrea, an engineering VP in charge of Google's A.I./machine learning efforts. Giannandrea's background is noteworthy in light of the huge machine learning investments Google is making for both its core search engine and Google Now.
- Though not the most headline-grabbing part of Google's empire anymore, search remains (by far) the company's biggest profit creator. Improving mobile search monetization and Google Shopping search ad growth had (along with YouTube's ad growth) much to do with Google's 31% Y/Y Q4 paid click growth.
- Separately, YouTube has announced its Red subscription service (combines ad-free YouTube with a music subscription service) will launch four original series' on Feb. 10, including one from YouTube star PewDiePie. Google has suggested it will try to provide exclusive content for Red without competing head-on with the likes of Netflix and Amazon for premium Hollywood material.
- Also noteworthy: Google has removed an ad-blocking plugin that works with Samsung's Android browser from the Play Store. Apple began allowing Mobile Safari ad-blockers on iOS last September via iOS 9; download activity has moderated following an initial surge.
- After rallying yesterday in the wake of Google's Q4 beat, shares are now trading below where they did prior to the Q4 report; Apple is once more has the world's biggest market cap. The Nasdaq is down 0.5%.
Wed, Feb. 3, 11:13 AM
- Bloomberg reports Google (GOOG, GOOGL) is "planning to publicly give its support" for Qualcomm's (QCOM +1.4%) first ARM (ARMH +2.2%) server CPUs at an investor event next week. It adds Google and Qualcomm have cooperated on design work, and that the former will commit to using the latter's chips if they meet performance goals.
- Google is the world's biggest server buyer, and has largely relied on Intel's (INTC -4.1%) Xeon CPUs. The Web giant's adoption of Qualcomm processors, even if for only a fraction of its workload, would act as a major reference win for the fledgling ARM server CPU market. There has been speculation Amazon might also adopt ARM server CPUs, following its acquisition of chip startup Annapurna Labs (recently unveiled a line of low-end network processors).
- Qualcomm is just four months removed from showing off a prototype ARM server CPU featuring custom cores. The company has been hoping the server market will provide a long-term sales lift as it continues dealing with mobile pressures - Qualcomm's chip division (QCT) sales fell 22% Y/Y in calendar Q4 to $4.1B.
- Intel has been hoping to keep Google and other major Web/cloud clients loyal in part by providing custom Xeon CPUs, and by creating products that place Xeon chips and recently-acquired Altera's FPGAs (can be programmed on the fly to handle new algorithms/code) in the same package. Qualcomm has partnered with Altera archrival Xilinx.
- Qualcomm and ARM are higher in spite of a 1.6% Nasdaq drop. Intel is underperforming; shares are down 3.3% after accounting for the fact Intel is trading ex-dividend.
Tue, Feb. 2, 9:17 AM| Tue, Feb. 2, 9:17 AM | 5 Comments
Mon, Feb. 1, 5:58 PM
- With strong mobile growth providing a lift, Gmail has topped 1B monthly active users, Alphabet/Google (GOOG, GOOGL) disclosed on its Q4 call. The e-mail service had 900M MAUs as of last May. Other Google offerings with 1B+ MAUs: Search, Android, YouTube, Maps, Chrome, and Google Play. (live blogs: WSJ, MarketWatch)
- Regarding surging paid click volumes (up 31% Y/Y in Q4, with 40% growth on Google sites), Google once more mentioned the impact of YouTube's TrueView ad format - a video ad viewed from start to finish is considered a paid click. CFO Ruth Porat mentioned ad format changes served to lower ad prices and boost clicks, and declared both mobile and PC ad monetization to be healthy.
- Porat urged analysts to look at the performance of Google's Other Bets segment - it had 2015 revenue of $448M and op. loss of $3.57B - on an annual basis rather than a quarterly one, and insisted Google is being efficient with its investments. Nest, Fiber, and the Verily life sciences unit are said to be the main revenue-generating parts of the Other Bets segment.
- She added capex is expected to grow again 2016, after surprisingly dropping in 2015 to $9.9B (equal to 13% of revenue). In addition to Google's data center infrastructure, Fiber and other bets will be an area of focus for capex.
- Also mentioned: 1) Spending from Google Play store buyers rose 30% in 2015. 2) U.S. revenue rose 24% Y/Y, and U.K. revenue (hurt some by a strong dollar) 16%. Forex had a $1.3B revenue impact, or $1B after factoring currency hedges. 3) Google is pushing for exclusive content for the YouTube Red subscription service. 4) ~$43B of Google's $73.1B cash balance is overseas.
- GOOG +5.5% after hours to $793.00. GOOGL +5.4% to $812.00.
- Google/Alphabet's Q4 results, Q4/2015 details
Mon, Feb. 1, 4:32 PM
- Alphabet/Google's (GOOG, GOOGL) Other Bets reporting segment, broken out by itself for the first time, had 2015 revenue of $448M (+37% Y/Y), and an operating loss of $3.57B (up from $1.94B in 2014). The segment's Q4 revenue totaled $151M (+42% Y/Y), and its op. loss $1.1B. Other Bets includes Google Capital, Google Fiber, Nest, Calico, and the Google X long-term R&D unit, among other things.
Core performance: Core Google (includes Google search, display ads, Maps, YouTube, and Android) had 2015 revenue of $74.5B (+13% Y/Y) and op. income of $23.4B (+23%). The segment's Q4 revenue rose 18% to $21.8B - Google sites revenue +20% to $14.9B, Google Network revenue +7% to $4.1B, other revenue (Google Play, hardware, etc.) +24% to $2.1B.
Paid clicks (boosted by YouTube, mobile search, and Google Shopping) rose a strong 17% Q/Q (lifted some by seasonality) and 31% Y/Y - Y/Y growth accelerated sharply from Q3's 23% and Q2's 18%, and was well above expectations of 22-23%. Google sites paid clicks +40% Y/Y, Google Network clicks (hurt by competition and quality control efforts) +2%. Cost per click (ad prices) fell 5% Q/Q and 13% Y/Y, worse than expectations for a ~6% drop. Google sites cost per click -16% Y/Y, Google Network -8%.
- Forex/TAC: Forex had a 600 bps impact on Q4 revenue growth (+18% Y/Y vs. +24%). Traffic acquisition costs were 21% of revenue vs. 22% a year ago.
Financials: $1.8B was spent in Q4 to buy back 2.4M shares. Operating expenses were 36% of revenue vs. 37% a year ago - R&D spend rose to $3.5B, sales/marketing to $2.7B, and G&A to $1.6B. Cost of revenue was 38% of revenue, same as a year ago. Boosting EPS: The effective tax rate was just 5%, down from 18% a year ago. Headcount rose 15% Y/Y to 61,814.
Capex totaled $2.1B in Q4, and $9.9B over the whole of 2015 (down from $11B in 2014). Q4 free cash flow was $4.3B (up from $2.8B a year ago). Alphabet ended 2015 with $73.1B in cash (much of it offshore) and $5.2B in debt.
- GOOG +5.1% after hours to $790.50. GOOGL +5.4% to $812.40. For now, Alphabet/Google has passed Apple to become the most valuable traded U.S. company.
- Alphabet's Q4 results, PR, earnings release (.pdf)
Mon, Feb. 1, 4:03 PM
- Alphabet (NASDAQ:GOOG): Q4 EPS of $8.67 beats by $0.58.
- Revenue of $21.33B (+17.8% Y/Y) beats by $560M.
- Shares +6.4%.
Sun, Jan. 31, 5:35 PM
Thu, Jan. 28, 8:52 AM
- Amazon (NASDAQ:AMZN) is up 3.7% premarket, Google/Alphabet (GOOG, GOOGL) up 2.2%, and Netflix (NASDAQ:NFLX) up 2.5% after fellow FANG trade member Facebook (up 14.7%) trounced Q4 estimates on the back of 57% Y/Y ad revenue growth. Nasdaq futures are up 0.6%.
- Separately, eBay, which has been losing share to Amazon and others for some time, is down 12.1% after issuing soft Q1/2016 guidance to go with in-line Q4 results. eBay's GMV was flat Y/Y at $21.9B, with Marketplace GMV dropping 3% to $20.7B.
- eBay spinoff PayPal is up 4.8% after beating Q4 estimates with the help of a 23% Y/Y increase in payment volume to $81.5B, and issued in-line Q1/2016 guidance.
- Amazon's Q4 report arrives this afternoon, and Google's on Monday afternoon. Last week, Netflix reported mixed Q4 results and strong subscriber adds.
Wed, Jan. 27, 2:58 AM
- Four years after unveiling its wearable glass headset, Alphabet (GOOG, GOOGL) has shut down several social media accounts linked to its Glass gadget, ending the push to popularize its pricey eyeglasses.
- A statement on a Google Plus page said: "Hi Explorers, we've had a blast hanging out with you on G+ throughout the Explorer Program."
- Google stopped selling Glass to consumers last year, but unveiled a reboot of the device, called GG1, in December.
Alphabet, Inc. is a newly founded holding company for the Google group of businesses. Under the new operating structure, its main Google business will include search, ads, maps, apps, YouTube and Android and the related technical infrastructure (the 'Google business'). Businesses such as Calico,... More
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