GOOG Down With A Rocky Market Stocks are falling as the raising of the debt ceiling vote passes in the Senate and as Americans cut back on their spending in June for the first time in nearly two years. Shares of GOOG were up modestly in early trading but quickly dove in the negative to meet a red tech tape. Catalysts include continued
Android momentum in the smartphone and tablet markets worldwide; regaining ground in China; any revival or partners for
Google TV; the roll-out of
Google Music and social network Google+; and progress in other newer initiatives (location-based services, mapping, gaming, Chromebooks, etc.). The stock trades at approximately
13x Enterprise Value / EBIT, inexpensive relative to historical trading levels.
Google Acquires Dealmap From Under Microsoft (MediaPost) Google acquired The Dealmap, a company in the daily deals space, to support
Google Offers. Dealmap claims about 2 million users who check in to get access to deals from 450 sources that are organized by location. In a twist, the startup signed a commercial distribution agreement with
Microsoft earlier this year to become Bing's primary provider of local and daily deals. No doubt Google will honor all contracts inked prior to the acquisition, but the length of the agreement, as well as how
Microsoft will support deals in the future, are unclear.
Read » Browser Share Numbers Show Chrome Gaining Ground (Various via techDygest) Two reports out from Net Applications and StatCounter:
- According to Net Applications for the month of July, Internet Explorer fell 0.87 points to 52.8% and Firefox fell 0.19 points, to 21.5%. That said, Chrome and Safari both made gains, of 0.34 and 0.57 points each, to 13.5% and 8.1%, respectively.
- According to StatCounter in the U.K., Chrome overtook Mozilla Firefox to become Britain's second-most popular Web browser after Microsoft's Internet Explorer with 21% share. Probably just as well Chrome is closing in considering Internet Explorer users are stupid.
Read » Android Balloons In The Second Quarter, Leading Smartphone OS By Long Shot (BGR) While
Apple owns the largest share of handset shipments and profits among the world’s top smartphone vendors,
Android is still the leading smartphone operating system by a wide margin. Google's mobile operating system
Android has captured ~50% of the global smartphone market, growing 379% in the second quarter, according to Canalys. The worldwide smartphone market grew 73% year-over-year to more than 107.7 million units shipped last quarter, and Android lead the market in 35 of the 56 countries tracked.
Read » Why Google Is Winning The Smartphone Wars (Forbes) A good way to visualize a computing platform is as a funnel; at the narrow end of the funnel is a human user and at the wide end of the funnel is "the world." Google focuses on the later, making Android work gracefully with as much of the “real world” as possible. When
Apple was building its own hardware, Google was cutting deals with numerous manufacturers. While Apple was negotiating an exclusive carrier deal, Google offered liberal licensing terms in an effort to get all carriers on board. This explains why
iOS has been losing ground to Android even though most people agree that the
iPhone is the best single smartphone on the market.
Read » Daily Trader: Buy Google On The Dips (Seeking Alpha) Google is relatively fairly priced, and maybe a bit undervalued at current levels. Google is definitely a growth stock at this point, but is growing at quick enough levels to outperform the general market. At nearly 20% expected earnings growth over the next 3-5 years, Google's earnings will be nearly $65 per share. At a 15X ratio, Google would be trading at nearly $1,000. Google might not have the upside of Apple, it is a fairly safe growth stock that should outpace the S&P 500 over the next five years.
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