Google misses by a country mile, but still looks cheap!

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.


The actual results themselves can be viewed via their investor relations page: Google Inc. Announces Third Quarter 2012 Results. They still have an enormous amount of cash, upwards of 45 billion Dollars, that still translates to 19.8 percent of their market cap, or roughly 138 Dollars of their 695 Dollar closing price yesterday. When the stock reopened for trade, with around 40 minutes of the session left the damage had already been done. At 12:30 the results were prematurely released, the stock was around 755 Dollars a share. 8 minutes later it was at 689 bucks a share. The trading halt was called just after ten to one local time. When the stock re-opened, the buyers stepped in and now, after the dust has settled the stock is back above 700 Dollars in the post market. Pre market. Whatever you want to call it, perhaps just the outside of normal hours market, sounds like a better explanation.

So what happened? I don't care about the release timing, why did everyone get their knickers in a knot about the results? Why did they miss by quite some margin? It is the issue that is plaguing all of the advertising industry, how to monetize the move to mobile! And it was not that people are not advertising online, the average price paid per click fell 15 percent in the last quarter, that was the main issue. Ad sales actually increased. This was a nice summary with a whole lot of videos, if you are interested: Google Under Pressure to Wring Sales From Mobile Users.


I found possibly the best analysis of everything Google, from the WSJ, Live: the Google Earnings Disaster. Not too sure that I agree with the headline. But don't get your knickers in a knot. On the conference call Larry Page said the following: "We have a policy of not talking about the future. I tend to be very impatient. I think that we're positioned very well and uniquely well because we have a significant fraction on mobile. That's a great start. We're working on changes, we've been investing in the space for a long time, our mobile monetization isn't zero. We've got a good base there and I don't think the things we need to do are that huge to get us in a very good spot. I think we have an opportunity to be higher monetization than where we are now with some innovation, which we're good at doing."

I think that Google are one of the few companies that can actually change the world. And that have changed the world. You need to search on something specifically, boom, you have that search device enabled either by them or a competitor in your pocket. No more do you have to argue about something at a restaurant table, you have the answers fully available in your pocket. Driverless cars is my recent favourite. Google have more than 8 million patents on the USPTO database. How cool is Google street view? Monetization of the internet is something that many people grapple with. I think that Google is going to continue to change the world. Think about it, PSY's Gangnam Style is about to go through 500 million views. I agree with this article: Opportunity in Google's Fat Finger. We think that this is a buying opportunity. Nobody even talks about the future advertising revenue via YouTube, which I use a whole lot more than many other people.