Jan. 31, 2014, 11:44 AM
- 13 sell-side firms have upped their Google (GOOG +3.6%) PTs following the company's mixed Q4 results and split announcement. Shares remain higher on a down day for equities.
- Google's market cap now stands at $395B, and its enterprise value (market cap - net cash/investments) of $342B exceeds Apple's $301B.
- Needham (Buy, PT raised to $1,350 from $1,150) is pleased with Google's accelerating international paid click growth (likely driven by mobile), and the strong performance of its "Other Google Revenue" segment (fueled by the Nexus 5 and Chromecast).
- RBC (Outperform, PT upped to $1,400 from $1,300), like others, is happy Motorola ($384M Q4 op. loss) will soon be out of the way, and notes Google's core international revenue rose 30% Y/Y. It's also pleased traffic acquisition costs remain under control, and isn't too worried heavy investments led Google's core op. margin to fall 220 bps Y/Y.
- UBS (Buy, PT raised to $1,350 from $1,300) thinks Google's cost per click (-11% Y/Y in Q4) will improve as Enhanced Campaigns and product listing ads gain more traction.
- Shares currently go for 20x 2014E EPS (exc. net cash).
- More on Google, CC transcript
Jan. 30, 2014, 5:52 PM
- After initially treading water in response to its Q4 report, Google (GOOG) has jumped to new highs. A likely factor: The company has announced a long-delayed stock split that (by creating "Class C" shares with no voting power) will further cement Larry Page, Sergey Brin, and Eric Schmidt's control over the company is set to finally take place.
- Following the split (set for April 2), Google's newly-created Class C shares will trade under the company's present symbol, while currently-traded Class A shares will trade under the symbol GOOGL.
- Google's CC (live blog) was predictably upbeat, and predictably short on specifics. Sales chief Nikesh Arora claims Google's closely-watched Enhanced Campaigns (creates joint PC/tablet search ad campaigns) is yielding strong ROIs, but doesn't provide any numbers. He also talked up YouTube's efforts to partner with Nielsen (NLSN) to measure video ad campaigns for marketers.
- Larry Page, who mentioned in October he wouldn't be joining some earnings calls, didn't join this one.
- Q4 results, details
Jan. 27, 2014, 12:44 PM
- U.S. and Chinese Internet stocks are adding to last week's big losses, as investors continue taking profits following major 2013 gains. Chinese stocks were hit last week by an emerging markets selloff, weak PMI data, and an SEC ban (pending appeal) on audits from the Chinese units of big-4 U.S. accounting firms.
- Twitter (TWTR -8.2%), the company bears are most likely to point to when arguing a new Internet stock bubble has formed, is headlining the U.S. decliners. Shares are still up 25% from their post-IPO opening trade of $45.10.
- Other U.S. decliners: GOOG -3.1%. FB -2.9%. YELP -5.3%. Z -5.1%. LNKD -4.3%. P -3.2%. ANGI -4.1%. ZNGA -3.1%. GRPN -3.1%.
- Chinese decliners: BIDU -2.9%. CCIH -19%. BITA -14.6%. CTRP -7.4%. NQ -7.9%. LONG -9.4%. DANG -7.3%. SOHU -4.3%. GOMO -5.8%. SINA -3.3%. QUNR -7.7%. SFUN -5.4%. WBAI -7.5%. RENN -5%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Jan. 21, 2014, 8:17 AM
- There's a new Street-high price target of $1,450 from Google (GOOG), courtesy of Pac Crest (from $1,135) and Credit Suisse (from $1,200).
- CS: Near-term checks suggest healthy growth for O&O software in Q4 consistent with the first three quarters of 2013, while the company continues to execute against its long-term thesis.
- Pac Crest expects a solid Q4 (report on Jan. 30) thanks to strong results from search.
- Shares +0.8% premarket
Jan. 14, 2014, 7:28 AM
- "Google (GOOG) is well positioned to benefit from the migration of brand advertising dollars online," says analyst Peter Stabler, upgrading to Outperform with price target raised to $1,300-$1,350 from $900-$1,000. "We anticipate Google will strengthen its leadership position in the fight for brand budgets and raise 2013/2014 EPS from $43.82/$51.83 to $44.30/$54.4."
- Near-term, Wells says, product listing advertising adoption accelerated meaningfully last quarter based on commentary from SEMs and leading e-commerce platforms.
- Midterm, there's the YouTube revenue model and proprietary analysis of Nielsen TV quintile data. "Simply said, Nielsen quintile data clearly points to online video as an ideal campaign supplement to aid reach of light-viewing linear TV consumers, a critically important audience for most TV advertisers."
- Shares +1.5% premarket
Dec. 31, 2013, 2:00 PM
- Google (GOOG +0.7%) has begun offering the first version of Google Glass (provided earlier this year to a limited number of developers/enthusiasts) to certain subscribers of its All Access music subscription service. But for now, the display glasses are still priced at a steep $1,500.
- Glass' full commercial launch is expected in early 2014, and will likely be accompanied by a price cut. Ahead of the launch, Google has been busy creating a developer ecosystem, and plenty of businesses have been coming up with use cases. At the same time, concerns about privacy (stemming from Glass' built-in camera) and social discomfort haven't gone away.
- Wired's Mat Honan has provided a mixed review of Glass after using it for a year. He notes the product created a lot of social tension - "Again and again, I made people very uncomfortable. That made me very uncomfortable." - and refrained from wearing it in many public settings.
- At the same time, Honan is a big fan of Glass' Google Now integration - "[Now's] ambient location awareness, combined with previous Google searches, means extremely relevant notifications come to your attention in a way they just can’t on a smartphone." - and states Glass made him "hate" using his phone due to the social withdrawal it produces.
- Honan: "Glass, and the other things like it, won’t always be ugly and awkward ... The future is on its way, and it is going to be on your face."
- Glass microdisplay supplier Himax (HIMX +4.7%) is rallying for the second day in a row. Shares have made new highs, and are closing out the year up 519%.
Dec. 20, 2013, 10:29 AM
- Ambarella (AMBA +11.2%) announces it's working with Google (GOOG +0.7%) on "a new class of wearable cameras" that supports the Web giant's Helpouts live video-based instructional/teaching service. (PR)
- Leveraging one of its video-processing SoCs, Ambarella has created a reference design enabling "small form factor wearable cameras that allow users complete mobility during a Helpouts session." The cameras support the simultaneous recording and Wi-Fi-based streaming of full HD video, as well as image stabilization.
- Ambarella, which delivered an FQ3 beat earlier this month, is making new highs, and is now up 146% YTD.
Dec. 3, 2013, 11:10 AM
- Rackspace (RAX -5.9%) is once more falling (previous) due to a product announcement from a cloud infrastructure (IaaS) rival, only this time the culprit is Google (GOOG +0.5%) rather than Amazon (AMZN -1.8%). The search giant has taken its Compute Engine IaaS platform out of beta, and has cut computing and persistent storage prices by 10% and 60%, respectively.
- Amazon is also lower, as are Red Hat (RHT -1.3%) and data center owner Equinix (EQIX -0.9%). Like Racksapce, Red Hat is a major supporter of the OpenStack IaaS platform.
- In addition to cutting prices, Google has greatly expanded Compute Engine's feature set. The company has added support for more Linux variants (inc. Red Hat and rival distributions) and popular app deployment tool Docker, and is launching a 16-core computing instance and high-I/O storage instances for intense workloads.
- Amazon, which just unveiled several new cloud services, still has a big edge on Google in terms of scale, feature set, and developer support. But consulting firm Scalr declares Google to be ahead of Amazon in terms of performance and reliability. They're considered even on pricing.
- Moreover Google's IT and engineering resources, together with its expertise in creating cheap, high-performance, data center hardware, should make it a solid rival in time, at least for basic computing/storage services.
- Previous: Amazon dominates cloud infrastructure
Nov. 22, 2013, 9:32 AM
- 3D Systems (DDD +5.7%) has struck a multi-year deal with Motorola Mobility (GOOG) to support the latter's Project Ara, an open-source initiative meant to enable custom smartphones for which users can mix and match various hardware components (the display, processor, memory, radios, etc.). (PR)
- 3D is expected to make smartphone enclosures and modules for Ara, and act as Motorola's "exclusive fulfillment partner" for the project.
- Also: 3D and Motorola will create "a continuous high-speed 3D printing production platform and fulfillment system," and 3D plans to "substantially expand its multi-material printing capabilities" to help make the project possible.
- If successful, Ara would represent a radical departure from how mobile phones have been manufactured for decades, and could offer consumers an unprecedented level of hardware customization. But the project will need to gain the backing of major component suppliers to make headway.
Oct. 30, 2013, 12:14 PM
- Perion (PERI -10.7%) and AVG (AVG -12.2%), both of whom depend heavily on search toolbar deals to monetize freely-distributed apps/services, are selling off after Israeli translation software vendor Babylon announced Google (GOOG -0.4%) is ending a search toolbar deal. Babylon shares finished down 62% in Tel Aviv.
- The toolbars bundled by companies such as Babylon, Perion, and AVG have often been criticized as "foistware" that users wind up unintentionally installing, and sometimes have trouble removing. However, Babylon has been viewed as a worse offender than many.
- Google, meanwhile, has been willing to sacrifice ad revenue this year by enforcing stricter policy terms, with the goal of creating a better user experience. Thanks to policy changes, Google's ad network revenue rose only 1% Y/Y in Q3 and 7% in Q2; that compares with 22% and 18% growth, respectively, for revenue coming from Google sites.
- Chardan is defending Perion: The firm points out both Perion and reverse merger partner Conduit have two-year deals in place with Google, and that Perion also has a 4-year deal (inked earlier this year) with Yahoo. Chardan also declares Perion hasn't engaged in the "questionable practices" Babylon took part in, and has conducted better product testing/optimization.
Oct. 18, 2013, 10:29 AM
- "We believe that Google's (GOOG +12.8%) ability to monetize experiences through engagement-based services will allow it to disrupt many hardware and software layers over time," writes Evercore's Ken Sena, exemplifying the glowing analyst commentary that has followed Google's Q3 beat.
- Sena, who is raising his PT to $1,100, sees Google's services investments pressuring near-term margins, but also creating "a stronger platform ecosystem in which more collected data, better predictive analytics, and an increased amount of screen connectivity will lead to better overall search economics in addition to new opportunities."
- Needham and Jefferies have raised their PTs to $1,150, and Deutsche has raised its target to $1,220. YouTube's mobile growth, strong paid click volumes, and the potential for Enhanced Campaigns to lift search ad sales (after doing less damage than expected in Q3) are all mentioned as reasons to stay bullish.
- U.S. Internet peers continue to rally in sympathy: FB +4.1%. LNKD +3.7%. YELP +7.8%. AMZN +3.3%. Z +3.9%. TRLA +4.8%. ZNGA +2.8%.
- Foreign Internet names are also moving higher: BIDU +5%. YOKU +6.9%. SINA +3.7%. RENN +4.4%. QIHU +4.9%. DANG +5.9%. YNDX +4%. SIFY +3.4%.
- Google's Q3 results, details, CC remarks, transcript
Oct. 18, 2013, 9:15 AM
Oct. 17, 2013, 4:03 PM
Sep. 20, 2013, 1:36 PM
- After meeting with Google Glass (GOOG) LCOS microdisplay supplier Himax (HIMX +5.3%), Chardan's Jay Srivatsa reports Google has prompted Himax to ramp production, and thinks Glass will see a full commercial launch in Q1 2014. He adds Google might launch more than one Glass model, to cater to those needing prescription glasses.
- Srivasta believes Himax has already raised microdisplay production to 500K units/month from a prior 200K/month, and is set to produce 850K/month by the end of Q1.
- Pricing for a commercial version of Glass remains a mystery. The developer edition was sold earlier this year for $1,500. Google has said it doesn't plan to run ads on Glass, and wants to profit from hardware sales.
- Himax also told Srivasta it's in the "early stages of ramping [microdisplay] production for another company," which the analyst believes is Microsoft (MSFT -2.5%). Himax thinks the company's product could launch in mid-2014.
- Meanwhile, TechCrunch reports Microsoft might spend up to $200M to buy wearable computing patents and assets from military contractor Osterhout Design. Osterhout has worked on head-mounted displays in the past, among many other products.
- Yesterday, Oppenheimer reported Himax is seeing "significant" interest in its microdisplays from other firms in the wake of the Google deal. Himax shares are making new highs again today.
Aug. 22, 2013, 12:24 PM
- Tech pundit and Google Glass evangelist Robert Scoble reports hearing Google (GOOG +0.3%) is planning to rent 6K sq. feet worth of space at every Best Buy (BBY +2.8%) store next year to promote Google Glass.
- Is Scoble's source off by a decimal? Best Buy's stores have 20K-45K sq. feet of floor space (inc. register aisles and everything else). If the rumor is true, Google would be renting 13%-30% of available space.
- Regardless, Best Buy appears to be getting a lift from the rumor, as is Glass microdisplay supplier Himax (HIMX +3%).
- Google already has a Chromebook marketing partnership with Best Buy.
Jul. 18, 2013, 4:06 PM
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