The Information reports Larry Page has proposed creating a new Google (GOOG +0.4%) R&D unit for projects even more ambitious/long-term than those handled by Sergey Brin's Google X (responsible for Glass, self-driving cars, and delivery drones, among other things).
The unit would be known as Google Y. Some of the projects reportedly mulled for it include a more efficient airport design and a new model city. Page is also said to be interested in near-term projects such as having biometric security replace passwords, and making location tracking accurate to within inches.
Meanwhile, in a note today, Nomura argues YouTube's video ad revenue could accelerate from 23% in 2014 to 27% in 2015 and 29% in 2016, as monetization efforts pick up and major brands direct more ad spend to the online video giant. The firm sees YouTube's gross video ad revenue rising to $8.8B in 2017 from $3.3B in 2013.
The Information previously reported YouTube had $1.5B in 2013 net revenue (excludes revenue-sharing). Jefferies has argued YouTube is worth up to $40B, or more than Netflix ($27B market cap).
Facebook (FB -0.3%) reportedly has reached out to some of YouTube's (GOOG -0.7%) top content producers and encouraged them to test distributing their videos on the social network, in another signal that it wants to muscle in on the video site.
Content creators now use Facebook to promote their programming but prefer people to watch the videos on YouTube and other platforms where they can make money through ad sales more easily.
FB and the video content creators are discussing how advertising might be incorporated into these videos, and some sort of ad product likely will be rolled out by the end of the year, WSJ reports.
The Explorer Edition of Google Glass (GOOG, GOOGL) is now available in the Devices section of Google's U.S. Play store. Before, they were only available through a dedicated Glass store.
The display glasses still cost $1,500; Google has begun throwing in a free pair of frames or sunglasses that make users slightly less conspicuous. There's still no word on when Glass will see a full commercial launch, which almost certainly will involve a lower price.
Himax (HIMX +3.8%) is trading higher. Shares sold off this spring on reports Google is thinking of using an OLED microdisplay instead of a Himax LCoS microdisplay in its next-gen Glass model.
Apple (NASDAQ:AAPL) is adding new security features to iCloud, following the posting of celebrity photographs on the Internet from hacked accounts.
A new layer of notifications will alert users if an effort is made to change a password, log in from a new device or restore files.
The company will also add additional password protection by sending an extra code to a person’s mobile phone after a password is entered.
Meanwhile, Apple, Google (GOOG, GOOGL), Intel (NASDAQ:INTC) and Adobe (NASDAQ:ADBE) have appealed the rejection of a proposed $324.5M settlement over a lawsuit which accused the four tech companies of limiting competition by conspiring not to hire each others' workers.
Google's (GOOG +0.1%) Calico anti-aging startup and pharma giant AbbVie (ABBV -0.2%) plan to initially invest $250M apiece on developing treatments for age-related diseases. Depending on how the effort progresses, each company could invest another $500M.
Costs and profits will be equally split. Calico will oversee early-stage drug R&D and trials; AbbVie will provide early-stage support and potentially late-stage R&D and marketing.
Calico was launched a year ago, is headed by Genentech chairman/ex-CEO Art Levinson, and has been busy hiring renowned anti-aging researchers. Fortune previously reported Google has committed "a minimum of hundreds of millions" of dollars to the company.
Add delivery drones to the list of products being developed by the Google X (NASDAQ:GOOG) long-term R&D division. In an in-depth column, The Atlantic reports Google has carried out over 30 test flights for its drone initiative, known as Project Wing, and hopes its drones can eventually be used by its same-day delivery service to deliver products within minutes.
Google, whose effort has been ongoing for 2 years, has opted for an unconventional aircraft design called a tail-sitter. It's described as "a hybrid of a plane and a helicopter that takes off vertically, then rotates to a horizontal position for flying around." By contrast, Amazon's (NASDAQ:AMZN) Prime Air delivery drones rely on 8 helicopter-like propellers.
Google's drones lower products to the ground using a tether featuring "a little bundle of electronics" at the end. The electronics detect when a package hits the ground, and then detach and are pulled back up.
The Atlantic doesn't shy away from the fact plenty of reliability and safety questions remain, as do nuts-and-bolts hardware issues such as improving battery life and reducing noise. Google is said to be "in the very early days of developing a mature, reliable detect-and-avoid system."
Wing is headed by MIT roboticist Nick Roy. Over the last 12 months, Google has bought leading military robot maker Boston Dynamics, solar-powered drone maker Titan Aerospace (meant to further Google's Web connectivity and imagery efforts), A.I. tech developer DeepMind, and hardware engineering/design firm Gecko Design.
Google (GOOG -0.5%) was unable to buy Twitch due to concerns about "potential antitrust issues" related to the acquisition, Forbes reports. Due to the antitrust issues (stemming from Google's ownership of YouTube), the companies reportedly couldn't agree on a breakup fee.
Meanwhile, Amazon (AMZN +2.4%) is rallying amid favorable reviews for the Twitch acquisition. Analyst Jan Dawson sees Twitch expanding Amazon's advertising scale and drawing in new customers, and thinks its streaming tech could strengthen other Amazon services. "Amazon is clearly taking digital media very seriously, and spending heavily to fund it."
The Verge's Ben Popper observes Twitch will get to make full use of AWS, and will now have Amazon's resources to help with licensing. VC Ethan Kurzweil (a Twitch investor) thinks non-gaming use cases are possible. "We think that Amazon is investing here in Internet infrastructure and something more than gaming media ... What Twitch has really built here is a video-based community around any activity."
Twitch, whose platform allows users to live-stream their gaming activity (along with running commentary), has 50M+ users and a network of 4K+ content provider partners. The startup claims its average user watches 95 minutes/day of content.
Buying Twitch would represent a major investment by Amazon in free (ad-supported) online video. Thus far, the bulk of the company's Web video investments have been directed towards Prime Instant Video. Amazon has also been fleshing out its own game studio.
The Information's report shortly follows a WSJ report stating Amazon is working on a keyword-based ad platform (called Sponsored Links) that aims to replace ads based on Google's bread-and-butter AdWords keyword platform on Amazon's site and elsewhere. Amazon has already built up a sizable ad business, aided by its volumes of customer data.
Gecko Design is an 18-year-old product design/engineering firm that has done work for Dell, H-P, Logitech, and Herman Miller, among others. As usual, Google (GOOG - unchanged) hasn't disclosed an acquisition price.
Gecko will be joining Sergey Brin's secretive Google X unit. Google X projects for which Gecko's hardware skills could be of value include Glass (still awaiting a full commercial launch) and Google's self-driving car effort.
Google has already been working with eyewear vendors to make Glass more aesthetically pleasing (and less conspicuous). Meanwhile, the company showed off its first internally-designed self-driving car prototypes in May; they have no steering wheels or pedals.
Nevertheless, Goldman's list of 50 stocks which "matter most" to hedge funds has outperformed the S&P 500 on a quarterly basis 66% of the time since 2001. The stocks this quarter (posted in order of the number of funds in which a name is a top-10 holding):
A special call-out to Northstar Realty (NYSE:NRF), Visteon (NYSE:VC), SunEdison (NYSE:SUNE), Macquarie Infrastructure (NYSE:MIC), and Lamar Advertising (NASDAQ:LAMR) for making the list of hedge fund hotels despite their relatively tiny market caps.
Android Police reports YouTube's (NASDAQ:GOOG) anticipated subscription music service will be called YouTube Music Key, come bundled with Google's All Access music service (to be renamed Google Play Music Key), and cost $10/month.
As previously reported, the service provides access to both YouTube music videos to go with audio-only listening. A screenshot suggests 20M+ songs will be included. No word on the launch date, or on how many holdout indie labels (previous) have signed up.
The WSJ and The Information report Google plans to officially offer accounts to kids under 13 for the first time. Parents would reportedly have the ability to set up accounts and establish controls,and a kids-friendly version of YouTube would also be offered. Privacy laws place strict limits on marketing to kids.
Google has updated its mainstay AdWords search ad platform to allow advertisers to track when an ad leads to a phone call. The feature is of particular value for mobile and local advertising, where marketers are often looking to enable a phone call rather than an online order/sign-up.
The WSJtakes a look at how Google's efforts to offer vertical search results in fields such as travel (previous), online retail, and local are upsetting advertisers who fear their bookings platforms are being marginalized. On former online travel exec: "All the value add is going to Google and everyone else becomes a commodity,"
A Google VP insists his company is simply trying to "get you the information you need as fast as possible." Moreover, like other Google moves that have unsettled advertisers, the backlash hasn't yet done much to affect ad spend, especially since many marketers feel Google's dominant search share leaves them with no choice but to stay the course.
David Einhorn took some Apple (AAPL -0.4%) profits in Q2: Greenlight Capital owned 9.4M Apple shares at the end of June, down from a split-adjusted 14M at the end of March.
On the other hand, Leon Cooperman's Omega Advisors bought 1.3M shares during the quarter; Cooperman had bailed out of Apple in Q3 of last year. Adjusted for the split, Carl Icahn's position is roughly steady at 52.8M shares.
IDC estimates the iPhone accounted for 11.7% of Q2 smartphone units, down from 13% a year ago. Android's (NASDAQ:GOOG) share rose to 84.7% from 79.6%, and industry shipments grew an estimated 25.3% (down slightly from Q1's 28.6%) to 301.3M.
At the same time, IDC notes over 80% of iPhone shipments ($561 Q2 ASP) involved a $400+ unsubsidized price, with the remainder in the $200-$400 range. Nearly 60% of Android shipments involved sub-$200 phones, with the remainder split almost evenly between $200-$400 and $400+ devices.
Following government pressure, China Mobile has cut its 2014 phone subsidy budget to $3.4B from a prior $5.5B. With the carrier having spent $2.5B on subsidies in 1H14, its fall iPhone 6 subsidies will likely be light.
Meanwhile, Apple has begun storing some of its iCloud data for Chinese users on local servers provided by China Telecom (CHA -0.3%). Apple insists the move, which comes amid ongoing NSA-related tensions, was partly made to improve local iCloud performance/reliability.