Wed, Aug. 26, 10:47 AM
- Believing Google (GOOG +4.4%, GOOGL +4.2%) is in the early stages of a multi-year margin expansion cycle, Goldman's Heather Bellini has upgraded to Conviction Buy, and set an $800 target.
- Bellini: "Google is implementing greater transparency, and we believe the management team is signaling a greater focus on cost control given recent earnings call commentary and the new operating structure with Alphabet." Three firms upgraded after the Alphabet announcement, and BMO and Axiom respectively upgraded just before and after the Q2 report.
- Bellini adds talks with 20 Fortune 1000 marketing execs yielded positive commentary. "Google was cited as the vendor most likely to see the greatest increase in spend over the next three years, with mobile search and video advertising highlighted as key areas of growth. For mobile advertising, Google Search emerged as the ad format with the greatest ROI, ahead of Facebook. While we believe the shift of TV advertising budgets moving to video may take longer than many in the market anticipate, our checks ranked YouTube as the best online substitute for TV advertising dollars."
- Google is among the large-cap standouts as the Nasdaq posts a 1.9% gain. The Class A and C shares respectively go for 19x and 18x 2016E EPS.
Mon, Aug. 24, 8:03 AM
- Tech stocks in the U.S. are sharply lower in early action after the sector fell just as hard as broad market averages in China and Japan. Tech heavyweights aren't getting spared amid the carnage.
- Google (NASDAQ:GOOG) -4.1% premarket to $587.31.
- Apple (NASDAQ:AAPL) -5.1% to $100.38.
- Microsoft (NASDAQ:MSFT) -3.9% to $41.41.
- Facebook (NASDAQ:FB) -3.4% to $83.05.
- Yahoo (NASDAQ:YHOO) -6.6% to $30.75 and Alibaba (NYSE:BABA) is down 8.7% to $62.26 as concerns over growth in China mount.
- The Nasdaq 100 futures contract is off 4.8%.
- Related ETFs: XLK, VGT, HACK, SOXL, FDN, GGT, TECL, USD, SMH, IYW, TDIV, IYZ, SOXX, ROM, XSD, VOX, SOXS, FTEC, TECS, RYT, PBS, PSI, IGV, QTEC, IGM, FXL, SSG, PSCT, IGN, MTK, REW, XTL, PXQ, FCOM, XSW, PSJ, PTF, LTL, TLL
Fri, Aug. 21, 7:08 AM
- Google (GOOG, GOOGL) plans to spin off its life sciences team into a standalone company within Alphabet, according to a Google+ post from Sergey Brin.
- Brin says Andy Conrad will head the business which is focused on using R&D to develop solutions for diseases.
- Conrad is a former Project Manager at Google X.
Thu, Aug. 20, 6:41 PM
- "A number of sources" tell Digiday Google (GOOG, GOOGL) is testing the inclusion of video ads within search results, and that the subject has "come up in discussions between Google and the ad industry." Bing already offers video ads through its Rich Ad format, and Yahoo is working on its own solution.
- With search ads still accounting for a giant portion of Google's profits, the payoff could be big. Video ads can drive higher conversions (product sales, sign-ups, etc.) and ad prices in some instances, and can also make search more appealing to brand advertisers who have historically opted for other online ad formats.
- Such a move would also be about going where the money happens to be flowing: Online video ads are rapidly taking share from traditional display ads, as more TV ad dollars move online. Google, of course, is already well-exposed to this trend via YouTube. However, Facebook and others are also aggressively going after the opportunity.
- The reports comes a month after the launch of Purchases on Google, a solution that aims to boost e-commerce ad conversion rates/prices by allowing users clicking on an ad to complete their transaction on Google's site, using credit card info previously provided to Google.
Thu, Aug. 20, 2:35 AM
- Yesterday was the 11th anniversary since Google's (GOOG, GOOGL) initial public offering, and there's no doubt the company has had a remarkable run (Class A shares +1,277%).
- Although the online advertising giant has given a massive return to investors, there are still 13 stocks that outperformed Google since 8/19/2004:
- Alexion Pharmaceuticals (NASDAQ:ALXN); Amazon (NASDAQ:AMZN); Apple (NASDAQ:AAPL); Celgene (NASDAQ:CELG); Gilead Sciences (NASDAQ:GILD); Intuitive Surgical (NASDAQ:ISRG); Keurig Green Mountain (NASDAQ:GMCR); Monster Beverage (NASDAQ:MNST); Netflix (NASDAQ:NFLX); Priceline (NASDAQ:PCLN); Regeneron Pharmaceuticals (NASDAQ:REGN); salesforce.com (NYSE:CRM); Vertex Pharmaceuticals (NASDAQ:VRTX).
Wed, Aug. 19, 2:35 AM
- Google (GOOG, GOOGL) has unveiled a cylinder-shaped Wi-Fi router named OnHub, moving closer towards the connected home and drawing more users to its services.
- The router comes with in-built antennas that will scan the airwaves to spot the fastest connection and can be pre-ordered for $199.99 at several online retailers.
Tue, Aug. 11, 10:27 AM
- Stifel, Mizuho, and Monness Crespi have upgraded Google (GOOG +5.5%, GOOGL +5.3%) to Buy after the Web giant announced it's creating a holding company structure under the Alphabet label, and is making Sundar Pichai the CEO of its core operations. Susquehanna launched coverage at Positive shortly before the announcement broke.
- BMO's Daniel Salmon (Outperform, $770 target) joins many others in praising the improved transparency expected to result from the shakeup: "The only complaint we heard from investors regarding last quarter’s earnings call was the lack of increased transparency into the business. Breaking out YouTube was a popular request and while Alphabet won’t do that, the move has certainly addressed the broader interest in better understanding the different components of Google..."
- RBC's Mark Mahaney (Outperform, $750 target): "We have long assumed that Google’s Core Advertising segment is very highly profitable – perhaps well north of 60% EBITDA margins. The new disclosure should confirm this ... the re-organization will likely lead to some efficiencies from a more focused management team. Finally, we believe Mr. Pichai is a logical, and strong, choice to lead the core Google platform."
- Deutsche's Ross Sandler (Buy, target hiked to $840): "We estimate Core Businesses (Search, YouTube and Apps) at $59B in revenue in 2015, growing 14% (+21% ex-FX). This would put the Emerging Businesses segment at $763m (Figure 1). If we were to assign a 55% EBITDA margin to Core (assuming near 70% for search, the remaining below the average), that business would generate $38B in 2016 EBITDA and likely fetch at 15x multiple once investors see the stronger financial profile. Emerging contains many loss making businesses and we believe EBITDA loss could be $3B in 2016."
- Om Malik suspects Alphabet is set to make large investments in other companies, and argues keeping some distance between those investments and core Google will lower regulatory scrutiny. Like others, he also sees parallels between the Alphabet structure and Berkshire Hathaway - Larry Page has long been a Warren Buffett fan.
Tue, Aug. 11, 9:16 AM
Mon, Aug. 10, 4:57 PM
- Google (GOOG, GOOGL) is forming a new parent company called Alphabet, Larry Page discloses in an eye-popping blog post. Alphabet will contain Google proper, as well as offshoot companies that are "pretty far afield of [Google's] main Internet products." The Google X lab, which has worked on products such as self-driving cars and drones, will be separate from Google proper, as will the Ventures and Capital investment arms.
- Larry Page will be the CEO of Alphabet, and fellow co-founder Sergey Brin its president. Sundar Pichai, who last fall was put in charge of Google's core products, is now the CEO of Google proper.
- Page: "Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG ... we are not intending for this to be a big consumer brand with related products--the whole point is that Alphabet companies should have independence and develop their own brands."
- GOOG +3.8% AH to $657.80. GOOGL +4.1% to $690.00.
- Update: More details can be found in Google's 8-K filing for the shakeup. In addition to Google X, Ventures, and Capital, Nest (now responsible for Dropcam and Google Glass, in addition to smart thermostats/smoke alarms) will be outside core Google, as will Fiber. Core Google will include "search, ads, maps, apps, YouTube and Android and the related technical infrastructure."
- Update 2 (6:23PM ET): GOOG and GOOGL are now both up 6.2% AH.
- Update 3: Analysts praise the shakeup for providing more financial transparency regarding Google's operations and capital allocation. Meanwhile, there's speculation Google pulled the trigger on the move after Pichai received an offer to become Twitter's CEO.
Thu, Jul. 30, 7:40 PM
- The WSJ and Re/code report Google (GOOG, GOOGL) is quietly distributing a new version of Google Glass to various enterprise partners ahead of a full launch later this year. Re/code adds the device's price is expected to be "well below" the $1,500 charged for the Explorer Edition of Glass.
- The WSJ states the product is being pitched "exclusively to businesses," and that a new consumer version of Glass is still "at least a year away." The paper suggests this decision was made by Nest CEO/former iPod chief Tony Fadell, who began overseeing Glass several months ago and (perhaps owing to his Apple pedigree) "prefers to keep products under wraps until they are ready for consumer use."
- As previously indicated by 9to5 Google, the enterprise Glass model is foldable, contain a larger display, and have a more rugged/industrial design than the Explorer Edition. The WSJ notes the enterprise model does away with the Explorer Edition's wire-like frame in favor of a button-and-hinge system that lets it attach to a variety of glasses.
- Related tickers: HIMX
Thu, Jul. 30, 3:45 AM
- Google's (GOOG, GOOGL) Project Loon has signed its first national agreement with the government of Sri Lanka, making the island nation a frontrunner in the race to provide countrywide Wi-Fi access from giant helium-filled balloons.
- Details of the memorandum of understanding don't provide a timetable to when the project will begin, but sources say a launch is "highly unlikely" to happen in 2015.
Mon, Jul. 27, 6:57 PM
- Some of the biggest and best known U.S. businesses join the Obama administration in trying to build momentum for a deal at the climate change summit in Paris later this year.
- A dozen publicly traded companies - AA, AAPL, MSFT, BAC, BRK.B, KO, GM, GS, GOOG, PEP, UPS and WMT - committed to support a “strong" outcome in Paris, and made new pledges to take a variety of steps to tackle climate change.
- For example, Alcoa says it will reduce absolute greenhouse gas emissions in the U.S. by 50% by 2025, and BRK plans to retire 75% of its coal-fueled generating capacity in Nevada by 2019.
- In addition to company-specific goals, the White House says today's announcements total at least $140B in new low-carbon investment and more than 1,600 MW of new renewable energy.
Mon, Jul. 27, 2:19 PM
- Further paring its ambitions for the platform, Google (GOOG +0.7%, GOOGL +0.6%) will no longer require users on YouTube and various other services to identify themselves with their Google+ profiles.
- Google: "People have told us that accessing all of their Google stuff with one account makes life a whole lot easier. But we’ve also heard that it doesn’t make sense for your Google+ profile to be your identity in all the other Google products you use. So in the coming months, a Google Account will be all you’ll need to share content, communicate with contacts, create a YouTube channel and more, all across Google ... And for people who already created Google+ profiles but don’t plan to use Google+ itself, we’ll offer better options for managing and removing those public profiles."
- The company is 15 months removed from shifting resources away from Google+ (launched in 2011) to other teams, and announcing Google+ chief Vic Gundotra is leaving. More recently, Google placed its cloud photo-storage/sharing features (previously a part of Google+) into standalone Google Photos apps.
- In spite of the pullbacks, and the platform's inability to challenge Facebook's social networking hegemony, Google+'s identity services and +1 button have been seen as a valuable way to gather demographic and interest data on Google users - data that could later be used for ad targeting.
- Google is higher on a day many Internet stocks are posting steep losses. The Nasdaq is down 0.8%.
Wed, Jul. 22, 7:33 PM
- Another ding to MTV (VIA, VIAB) after a year of ratings challenges, as programming chief Susanne Daniels is leaving the network after nearly three years there to join YouTube (NASDAQ:GOOG).
- Mina Lefevre will take over as an executive VP in charge of all scripted development and programming, and report directly to network president Stephen Friedman.
- Daniels was charged in 2012 with refocusing the network, but has faced double-digit ratings declines for the past two years -- a problem afflicting all Viacom's networks to varying degrees.
- At Google-owned YouTube, she'll be VP of the company's original-content pipeline. YouTube detailed its investments in original content in April, including work with Smosh, the Fine Bros. and AwesomenessTV.
- Elsewhere, VH1 named Chris McCarthy its new general manager. McCarthy held the same position at MTV2 and Logo.
- Previously: Viacom takes $785M writedown for restructuring (Apr. 06 2015)
- Previously: CEO: Viacom restructuring to wrap this month, save $250M (Mar. 09 2015)
- Previously: Viacom reportedly prepping companywide layoffs (Feb. 23 2015)
Fri, Jul. 17, 12:44 PM
Fri, Jul. 17, 10:42 AM
- Axiom Securities has upgraded Google (GOOG +13.4%, GOOGL +14.8%) to Buy following the company's Q2 beat and investor-pleasing comments about spending discipline, potential capital returns, and YouTube/mobile growth. MKM has launched coverage at Buy, and plenty of other firms have hiked their targets. Google's market cap is now above $450B.
- Deutsche's Ross Sandler: "We think this could be the dawn of a new era for shareholders. Google is showing investors that its management team (even pre-Ruth Porat) cares deeply about its stock price and talent retention. We've long held that innovation is alive and well, and the narratives around irrelevance in mobile or share loss to Facebook that weighed on the multiple were somewhat misguided ... We have increased our 2016 EPS by 7%, and we expect the multiple to expand..."
- Credit Suisse's Stephen Ju: "YouTube is starting to contribute more meaningfully to revenue as it helped to drive acceleration in paid click growth to +30% (vs. 1Q15 25%) as well as U.S. revenue growth to 16%. Google Play was in-line with our estimate, suggesting it continues to grow at ~35% on an FX-neutral basis. As we have noted earlier, we continue to see clear indications of these two emerging business lines exerting greater impact..."
- MKM's Rob Sanderson: "The growth story is very much alive. However, we think that solid expense control and discussion of disciplined capital allocation going forward were the more material drivers of the stock gains." His list of potential long-term growth drivers includes "mobile's ability to influence the 90% of retail transactions not online, video ad dollars migrating online, monetization of mobile apps, and new ad products."
- BMO's Daniel Salmon, who upgraded ahead of earnings yesterday: "[W]e felt the most important elements were: 1) investor interest was piqued by comments about potential capital return when considering financing options; 2) the acceleration of YouTube metrics across the board ... 3) CBO Kordestani’s emphasis of the billion+ user bases for YouTube, Chrome, Android, Search, Maps, etc. sounded very much like the 'portfolio of apps' strategy/messaging that has served Facebook so well. While we tepidly stepped into this recommendation yesterday, our conviction is now much stronger..."
- Prior Google coverage, CC transcript
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