Research archive for GOOG

Holy smokes. This is probably the most amazing video you will watch all day. And if you do watch something more amazing, please share with us. It is titled A First Drive and contains the prototype vehicle. The first thing people notice when they get in the little bug, that looks not too dissimilar to the Smart Car. And then the big one, no steering wheel, and no brakes. The brakes could be a bit of a problem, don't you think? Or not. The having more time with one another is important, but whether or not that time is well spent or not, that is important too. What is the point of everyone fiddling on their smart device when sitting with their backs to one another? These are still for urban and suburban spots, no speed here.

Last week while South Africans were slowing things down in anticipation for the long weekend, Google released their results. We gave you the brief highlights from their release with the promise of a more detailed analysis this week.

Nooooooo (slow motion one), what is going on with Google? You saw right, the price halved, but that did not mean that your value halved. Simply, because two years after announcing that, the founders and essentially controllers of the business, Larry Page and Sergey Brin, would split the shares and control the company through their special voting rights B shares, the stock has finally split.

Last night we received an announcement from 2 of our recommended stocks listed on the NYSE. Its very exciting actually, Google Glasses have struck up a relationship with Sunglass manufacturer Luxottica. Remember I did a write up on Luxottica, the manufacturer of brands such as Oakley, Ray-Ban and Arnette sunglasses in a piece titled Lifting the shades on eyewear.

Google reported numbers post the market last evening, these were for the full year and fourth quarter. Cash on hand, and this always amazes me, is 58.72 billion Dollars. As a percentage of their market cap it is around 15 percent. Nowhere near as high as the hardware manufacturers, like Apple and Cisco and the like, but not too dissimilar to Facebook, as you will recall yesterday. Whilst you could classify Google as a software company, they posses an enormous amount of hardware and patents for hardware. When did Google ever fall over and you were not able to search the internet? Never. Or perhaps a long time ago.

Over the past couple of years Google has become our 6th biggest position in New York. This has been the result of constant additions as well as a fast appreciating share price. The stock was up over 50% last year. The businesses initial focus is on advertising revenue through people using their search site. That makes sense as a very profitable business model. But the company has bucket loads of cash ($57bn at the end of last year) and a very ambitious and innovative management team.

Staying with stocks, Google topped 1000 Dollars a share for the first time, and the level stuck. Remember on Friday we covered their results, which beat expectations comfortably and perhaps left people feeling like they had not quite had their fill! 1011,41 Dollars a share is where the stock closed, many internet related and advertising stocks rallied in sympathy with Google, perhaps it is time for a ten for one split. Because then maybe the company can be included in the Dow Jones Industrial Average. But I guess that maybe Larry, Sergey and Eric (the chaps with ultimate control) have a Buffett like approach, and do not want more shares in issue. It sounds simple enough, you do not create any further value by doing a stock split, you do make the stocks more liquid maybe. Personally it does not matter if a company trades at 1 Rand or at 10 Rand or 1000 Rand, what matters is the value that you invest in a specific company, relative to the other companies in your portfolio. If buying one or one hundred thousand shares gets you to that point, then so be it. If you must own Berkshire Hathaway (the A shares trade at 175,400 Dollars a share), then buy the B shares, which trade at 116.97 Dollars a share. You can own a piece of Buffett, but would you want to now? Not sure.

Google reported third quarter results last evening after the market closed. You can download them and have a look here: Google Inc. Announces Third Quarter 2013 Results. Revenues and earnings top estimates. The business as we will discuss shortly is essentially an online advertising platform. As a customer, you get the ability to bid for space on the web, ahead of people offering a similar service. If you want to know what the real nitty gritty about this company and how it all works: Advertising on Google AdWords: An overview. You can have a lot more pointed advert to people who are searching for that very product or service. As you can see, this is very attractive to both sides of a potential transaction, as both a searcher and advertiser.

Google reported numbers last evening after the market closed. These are for the second quarter, and of course for the first half. Normally one is always presented with the price (after market) and then the numbers, but I did my best to try and avoid the price entirely and then to focus solely on the numbers. Because after all, price should be last, after the exploration of the business, right? Perhaps not for everyone, but you get the point that I am trying to make.

It has been exactly a year yesterday since GANGNAM STYLE was released by PSY. As I was doing this piece, the video had 1,743,631,346 hits. The most watched YouTube video of all time is not in English (the most spoken first and second language worldwide), it is not mandarin, which is the world's largest first language at roughly 12.5 percent of the globes population. But rather Gangnam style is in a language that is spoken by only 76 million people (as a first language), 1.14 percent of the globes population. And you can bet that the vast majority of the 24.5 million people in North Korea have not seen the YouTube clip, because of the oppressive regime that means a lack of internet connectivity. And an oppressive regime, oh, we said that. I bet that the folks would rather have freedom than the internet.

Which Waze is this going to go? And by that, I am talking about the business called Waze, an Israeli business that did not exist in 2007. Now, the talk of the town is that Google are the most successful bidder and are willing to pay somewhere in the region of 1 billion Dollars for the business that isn't (in human terms) at junior school yet. 80 whole employees, with 10 in California, the rest in Israel. Now before you say, Israel, what is that about, remember that Israel has outside of North America the highest number of listed companies on the NASDAQ, per territory. Israel has more university graduates as a percentage of their population than any other country in the world. Israel apparently produces more scientific papers per capita and files more patents per capita than any other country in the world. Seems like relatively low rainfall, clear air and moderate temperatures mixed in with clever people make the perfect cocktail for human ingenuity!

Google reported numbers post market, and at face value they certainly look good enough to me. They are available here: Google Inc. Announces First Quarter 2013 Results. Cash and cash equivalents swelled to 50 billion Dollars. Revenue increased 31 percent to 14 billion Dollars for the quarter, 55 percent of that outside of the US. So there you go, whilst Google has their biggest market inside of the US, it is no longer more than half. And in fact had been falling for a while, last quarter the US contributed 46 percent of revenues. The other big territory and I guess no surprises, is the UK, 11 percent of their revenues. Hmm.... they managed to employ a whole 30 people for the quarter (1000 added in the Google core businesses, there must have been pink slips elsewhere), so guess who wasn't hiring on balance. Capex is always huge, having to keep up with growing demand, they invested 1.2 billion Dollars in their infrastructure.

Google reported numbers after hours. Here it is, the release as per their investor relations page: Google Inc. Announces Fourth Quarter and Fiscal Year 2012 Results. This time around there was no {insert Larry quote here}. Nor was the release early, this was not a disaster from a corporate relations point of view. Google cash and marketable securities for the year to end December 2012 added up to just over 48 billion Dollars. They could buy Dell two times over and have some cash left over, around 4 billion Dollars. Instead Microsoft is currently rumoured to be engaging Dell along with some private equity types. The original search engine for what is Google now (the website tells me it was originally called BackRub) was built by Larry and Sergey in 1996. The company was founded in 1998, by some amazing coincidence (luck?) they managed to miss the worst of the tech bubble crash. Listing was in August of 2004, the IPO went off worse than anticipated, they priced below 90 Dollars a share, 85 bucks in fact. I don't ever remember them trading at that level, even if you had paid 108 Dollars a share a few days later, your return would be 550 percent from late 2004. Major acquisitions included YouTube for 1.65 billion Dollars, or roughly 1.29 Dollars per view of PSY's Gangnam Style.

Google Inc. 1600 Amphitheatre Parkway, Mountain View, California That was plain embarrassing. From the company that is the king of search this is just downright wrong. On their website, Google says that their "...mission is to organize the world's information and make it universally accessible and useful." I guess that there is nothing about a timeous and orderly release thereof! It turns out that it might not have been their fault, but rather their filing agent released the results earlier than anticipated. That normally is not too big a deal, if the results are inline with Mr. Market's expectations, but these were a big miss. The early release saw a wild selling scramble and the stock was halted. The horror of it all. An embarrassment for one of the kings of tech.

Google hit the streets with results afterhours and a beat of expectations, which is always comforting to see. A bottom line beat, but a top line miss. EPS was anticipated to be just over 10 Dollars a share, a slight beat of 10.12 Dollars was delivered, revenue missed but still showed a 35 percent increase on Q2 2011, the comparable quarter. If you are looking for the official release then you will have to check out Google finance ironically, over here: Google Inc. Announces Second Quarter 2012 Financial Results. I use Google Finance all the time, it is one of my favourite free services, if not absolute favourite. I do NOT use the Yahoo! service because that comes with a login.