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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, 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
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.
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. 17, 2015, 12:41 PM
- Morgan Stanley has upgraded Yandex (YNDX +5.9%) to Overweight, and hiked its target by $2 to $20. Shares are close to a 5-month high of $16.61.
- Separately, Google (GOOG, GOOGL) says it will contest in court a September ruling from Russian regulators declaring the company's Android app/service bundling requirements violate antitrust law. Yandex, which has been losing Russian search share to Google thanks in part to the latter's strong mobile share, soared when the ruling was announced.
- Google has until Dec. 18 to amend its deals with smartphone OEMs to comply with the Russian ruling. Meanwhile, Yandex recently disclosed it's among the long list of firms to have asked EU regulators to probe Google's Android policies.
- Last month: Yandex gains after Q3 beat, revenue guidance hike
Oct. 23, 2015, 9:14 AM
Oct. 23, 2015, 8:58 AM
- "This is the second straight quarter where Google introduced some more investor friendly policies," says Piper Jaffray's Gene Munster, reiterating his Overweight rating on Alphabet (GOOG, GOOGL) and boosting the price target to $812 from $723. The $5.1B buyback was a surprise, he says, and follow's last quarter's talk about expense cuts. Next quarter, the trend will continue as Google is broken out from the company's other bets.
- Munster boosts his FY16 EPS estimate to $34.42 from $33.82.
- Other price target hikes come from Jefferies ($900), Credit Suisse ($850), Cowen ($880), and Mizuho ($850).
- The stock's higher by 11.5% to $726.89 in premarket trade.
- Previously: More on Google: $5B buyback launched, YouTube/mobile discussed on call (Oct. 22)
- Previously: Alphabet beats by $0.14, beats on revenue (Oct. 22)
Oct. 22, 2015, 5:37 PM
Oct. 22, 2015, 5:18 PM
- Seven months after naming Ruth Porat its CFO, Google/Alphabet (GOOG, GOOGL) is ready to begin returning capital. A $5B buyback, good for repurchasing ~1% of shares, has been launched. The buyback covers the non-voting Class C shares (NASDAQ:GOOG).
- Google had $72.8B in cash/marketable securities at the end of Q3, and just $5.2B in debt. However, much of the cash is offshore.
- On the earnings call (live blog), management has talked up YouTube ad growth, and suggested it has much to do with both Google's strong paid click growth and declining cost per click. The remarks come a day after a $10/month ad-free YouTube/Google Music service was unveiled.
- New Google CEO Sundar Pichai states Google has indexed over 100B deep links within 3rd-party apps, as it tries to head off the threat posed by mobile users bypassing search in favor of going directly to apps. 40% of mobile searches now have in-app results within their top 5 results.
- Pichai reiterates mobile now accounts for over 50% of searches. He also notes over 20M Chromecast devices have been sold to date.
- GOOG +11.1% after hours. GOOGL +9.6%. Both share classes have made fresh highs.
- Q3 results, details
Oct. 22, 2015, 4:27 PM
- Google/Alphabet's (GOOG, GOOGL) paid clicks rose 6% Q/Q and 23% Y/Y in Q3, after having grown 18% in Q2 and 13% in Q1. Clicks on Google sites (boosted by YouTube and mobile search) rose 7% Q/Q and 35% Y/Y. Clicks on partner sites (hurt by quality control efforts and competition) were flat Q/Q and down 5% Y/Y.
- Ad prices: Cost per click (CPC - hurt by relatively low smartphone ad prices and YouTube growth) remained under pressure, dropping 1% Q/Q and 11% Y/Y. Google site CPC -2% Q/Q and -16% Y/Y; partner CPC +1% Q/Q and -4% Y/Y.
- Segment/regional performance: Ad revenue from Google sites +6% Q/Q and +16% Y/Y to $13.1B. Partner site ad revenue +2% Q/Q and +4% Y/Y to $3.7B. Other revenue (Google Play, Nexus hardware, Nest, Fiber, etc.) +11% Q/Q and Y/Y to $1.9B. The U.S. was 47% of revenue, up from 44% a year ago; the U.K. remained 10% of revenue.
- Forex/TAC: A strong dollar had an 8% impact on revenue growth (+13% vs. +21%). $286M worth of forex hedging gains were recorded. Traffic acquisition costs were 21.3% of revenue vs. 21.1% in Q2 and 22.6% a year ago.
- Financials: Non-GAAP cost of revenue fell to 36% of revenue from 37% a year ago. Operating expenses remained 31% of revenue - R&D was 13%, sales/marketing 11%, and G&A 7%. Capex fell slightly Y/Y to $2.37B, and free cash flow totaled $3.63B (below net income of $5.1B). The effective tax rate was only 19%, down from 24% a year ago.
- GOOG +9.9% after hours to $716.00. GOOGL +8.2% to $737.07.
- Q3 results, PR, slides (.pdf)
Oct. 15, 2015, 12:26 PM
- Looking to halt ongoing share losses to Gmail (or at least slow them), Yahoo (NASDAQ:YHOO) has overhauled its iOS/Android Mail apps. New features include a smarter search engine that makes suggestions based on queries and message content, the ability to fully manage Hotmail, Outlook.com, and AOL.com e-mail accounts, and social media content integration for contact profiles.
- Getting the most attention is Yahoo Account Key, a feature that lets users login without a password by linking their Yahoo account to a mobile device, and approving/denying logins via push notifications sent to the device. Yahoo argues Account Key is more secure than passwords, and eliminates the possibility of a user being unable to logic due to forgetting his/her password.
- comScore estimates Yahoo Mail had 71M U.S. users as of August, down from 96M two years earlier. Over the same time, Gmail's (GOOG, GOOGL) U.S. base, strengthened by the pre-installing of a Gmail app on devices using Google's version of Android, is believed to have grown to 135M from 96M.
- Yahoo is up strongly thanks to Alibaba, which is up 3.9%. Q3 results are due on Oct. 20.
Oct. 13, 2015, 12:24 PM
- The enemy of my enemy is my friend: Yandex (NASDAQ:YNDX) has struck a deal with Microsoft (NASDAQ:MSFT) to act as the default home page and search engine for the Edge and Internet Explorer browsers on Windows 10 devices in Russia, Turkey, and Ukraine. The agreement follows a similar deal between Microsoft and Baidu for China.
- The deal gives Yandex a shot in the arm as it tries to halt Google's (GOOG, GOOGL) share gains: LiveInternet estimates Google's Russian search share has risen from 27% in Jan. 2014 to 35% last month, while Yandex's has fallen from 62% to 57%. Yandex jumped in September after Russian regulators declared Google's Android app/service bundling requirements (have done much to strengthen the company's mobile search position) violated competition rules.
Oct. 9, 2015, 9:59 AM
- Twitter (TWTR +1%) has updated to Twitter's Amplify video ad platform to let advertisers buy pre-roll ads for various content categories, rather than having to set up a deal with a particular content publisher. The solution also lets advertisers target specific audience groups watching a type of content.
- Publishers currently supporting the service include Sports Illustrated, The Weather Channel, Fox, and AOL. They receive a cut of ad revenue via automated payments.
- The solution has much in common with how YouTube (still by far the biggest player in online video ads) monetizes its content. One notable difference: Twitter is taking a 30% cut on ad sales, less than YouTube's (GOOG, GOOGL) 45%. Facebook (NASDAQ:FB) has also been gradually rolling out new video ad buying options and formats. However, the company has said it's uninterested in pre-roll ads.
- Shares have rallied strongly during a week that has seen Jack Dorsey named permanent CEO, and the Moments (Project Lightning) curated event stream service roll out.
- Update: Some more Twitter video ad news: Glenn Otis Brown, the exec leading Twitter's video ad program, has left to join startup investor/builder Betaworks.
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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