Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: Liberty on May 16, 2011, 04:19:27 PM

Title: GOOGL - Google
Post by: Liberty on May 16, 2011, 04:19:27 PM
A lot of people here are investing in GOOG, especially at recent prices (down 17% in the past 3 months), yet we didn't have a thread to discuss our favorite ad-company-that-masquerades-as-a-search-company  ;)
Title: Re: GOOGL - Google
Post by: FFHWatcher on May 16, 2011, 04:31:28 PM
How do you know that a lot of people here are investing in GOOG?
Shouldn't there be some sort of write up/analysis that goes along with the post? (I am lazy).
Title: Re: GOOGL - Google
Post by: globalfinancepartners on May 16, 2011, 04:36:39 PM
I was surprised to see Glenn Greenberg of Brave Warrior Capital selling a quarter of his position in the recent 13F.  He had always been very bullish on Google in various interviews I read.

http://www.dataroma.com/m/holdings.php?m=CCM
Title: Re: GOOGL - Google
Post by: VAL9000 on May 16, 2011, 05:42:17 PM
I saw this today:
http://www.bloomberg.com/news/2011-05-16/google-plans-to-sell-3-billion-of-bonds-in-its-debut-three-part-offering.html

Seems to be in line with the concerns voiced on this board regarding repatriation taxes.

Google's such a crazy company to try to value.  On one hand you have a great growth trend in a highly profitable business with economics that lend themselves well to the dominant player.  There are only one or two real competitors worldwide..  It's a dream come true!

On the other hand, you have this:

Android
Android G1
Blogger
Gmail
Google Ad Manager
Google AdSense
Google AdWords
Google Alerts
Google Analytics
Google App Engine
Google Apps
Google Blog Search
Google Book Search
Google Buzz
Google Calendar
Google Checkout
Google Chrome
Google Chrome Netbook
Google Chrome OS
Google Code
Google Contacts Data API
Google Custom Search
Google Desktop
Google Docs
Google Earth
Google Finance
Google Friend Connect
Google Gears
Google Groups
Google Health
Google Images
Google Labs
Google Latitude
Google Local
Google Maps
Google Mini Search Appliance
Google Mobile Application
Google Moderator
Google News
Google Notebook
Google Patent Search
Google Places
Google Product Search
Google Profiles
Google Reader
Google Scholar
Google Search
Google Search Appliance
Google Site Search
Google Sites
Google SketchUp
Google Social Graph API
Google Special Searches
Google TV
Google Talk
Google Toolbar
Google Translate
Google Video
Google Voice
Google Wave
Google Web Toolkit
Google eBooks
Knol
Lively
Nexus One
Nexus S
Orkut
Picasa
Pubsubhubbub
Sidewiki
iGoogle
YouTube
Enterprise Search
 & much much more.

 -- Few of which pay their way.  Plus investments in clean tech, cars that drive themselves, various random acquisitions, yadda yadda yadda.

There's so much failure at Google.  You really need to have conviction in the idea that what you're witnessing is the process of innovation unfold in a very public way.  These guys have serious cojones to experiment in the market that way.  They've done a good job at changing the brand Google from "search" to "smart people who do crazy things".  I truly believe that the outcome of this process will be another big hit, but it's hard to say when that will happen or what it will look like.

Personally, I would love to own a car that drives itself.  I would probably pay a 20-50% premium for a car with that feature.
Title: Re: GOOGL - Google
Post by: Liberty on May 16, 2011, 07:49:32 PM
How do you know that a lot of people here are investing in GOOG?
Shouldn't there be some sort of write up/analysis that goes along with the post? (I am lazy).

This is based on what people have been saying in various threads. I don't have a crystal ball.

And yes, an analysis would be best, but I don't have one right now and I figure that the next best thing is to start a thread anyway because it'll probably grow into something pretty useful. Sometimes people just need a canvas before they start painting...
Title: Re: GOOGL - Google
Post by: Myth465 on May 16, 2011, 07:53:10 PM

Personally, I would love to own a car that drives itself.  I would probably pay a 20-50% premium for a car with that feature.


These would sell like crazy in Texas. No more drunk driving.
Title: Re: GOOGL - Google
Post by: alpha23 on May 16, 2011, 09:28:54 PM
I saw this today:
http://www.bloomberg.com/news/2011-05-16/google-plans-to-sell-3-billion-of-bonds-in-its-debut-three-part-offering.html

Seems to be in line with the concerns voiced on this board regarding repatriation taxes.

Google's such a crazy company to try to value.  On one hand you have a great growth trend in a highly profitable business with economics that lend themselves well to the dominant player.  There are only one or two real competitors worldwide..  It's a dream come true!

On the other hand, you have this:

Android
Android G1
Blogger
Gmail
Google Ad Manager
Google AdSense
Google AdWords
Google Alerts
Google Analytics
Google App Engine
Google Apps
Google Blog Search
Google Book Search
Google Buzz
Google Calendar
Google Checkout
Google Chrome
Google Chrome Netbook
Google Chrome OS
Google Code
Google Contacts Data API
Google Custom Search
Google Desktop
Google Docs
Google Earth
Google Finance
Google Friend Connect
Google Gears
Google Groups
Google Health
Google Images
Google Labs
Google Latitude
Google Local
Google Maps
Google Mini Search Appliance
Google Mobile Application
Google Moderator
Google News
Google Notebook
Google Patent Search
Google Places
Google Product Search
Google Profiles
Google Reader
Google Scholar
Google Search
Google Search Appliance
Google Site Search
Google Sites
Google SketchUp
Google Social Graph API
Google Special Searches
Google TV
Google Talk
Google Toolbar
Google Translate
Google Video
Google Voice
Google Wave
Google Web Toolkit
Google eBooks
Knol
Lively
Nexus One
Nexus S
Orkut
Picasa
Pubsubhubbub
Sidewiki
iGoogle
YouTube
Enterprise Search
 & much much more.

 -- Few of which pay their way.  Plus investments in clean tech, cars that drive themselves, various random acquisitions, yadda yadda yadda.

There's so much failure at Google.  You really need to have conviction in the idea that what you're witnessing is the process of innovation unfold in a very public way.  These guys have serious cojones to experiment in the market that way.  They've done a good job at changing the brand Google from "search" to "smart people who do crazy things".  I truly believe that the outcome of this process will be another big hit, but it's hard to say when that will happen or what it will look like.

Personally, I would love to own a car that drives itself.  I would probably pay a 20-50% premium for a car with that feature.



It's an interesting list, because I checked a few, and most of them do lead to some sort of revenue for Google, or they will in the future. Whether it is a click ad, an opportunity to sell data about users to corporate clients, a licensing fee, a royalty or some other stream of revenue, these folks are the world's experts on how to monetize a website / application, etc. They are becoming the most intelligent (savvy) company in the world as far as user behavior goes (remember that other companies have been paying big bucks for this for a long time). So I have no problem with Google casting a few lines. They have a lot more opportunities to monetize their services than they are actually taking, and for most of these, they lead to a stream of revenue somewhere down the click path.
Title: Re: GOOGL - Google
Post by: claphands22 on May 17, 2011, 12:03:41 AM
Google is interesting. Adjust for cash per share and using analyst estimates for 2012, GOOG has a cash adjusted P/E of 11.37  Not bad for a business that has a strong moat, high ROIC, reasonable growth prospects and lots of free options with all their other projects.

That all being said, I'm currently reading In The Plex, the google book Munger recommended..I'm not finished with the book yet, but I'm not too keen on Larry Page at this point.
Title: Re: GOOGL - Google
Post by: prunes on May 17, 2011, 05:53:18 AM
http://gregmankiw.blogspot.com/2011/05/google-plays-yield-curve.html
Title: Re: GOOGL - Google
Post by: DCG on May 17, 2011, 06:04:21 AM
I saw this today:
http://www.bloomberg.com/news/2011-05-16/google-plans-to-sell-3-billion-of-bonds-in-its-debut-three-part-offering.html

Seems to be in line with the concerns voiced on this board regarding repatriation taxes.

Google's such a crazy company to try to value.  On one hand you have a great growth trend in a highly profitable business with economics that lend themselves well to the dominant player.  There are only one or two real competitors worldwide..  It's a dream come true!

On the other hand, you have this:

Android
Android G1
Blogger
Gmail
Google Ad Manager
Google AdSense
Google AdWords
Google Alerts
Google Analytics
Google App Engine
Google Apps
Google Blog Search
Google Book Search
Google Buzz
Google Calendar
Google Checkout
Google Chrome
Google Chrome Netbook
Google Chrome OS
Google Code
Google Contacts Data API
Google Custom Search
Google Desktop
Google Docs
Google Earth
Google Finance
Google Friend Connect
Google Gears
Google Groups
Google Health
Google Images
Google Labs
Google Latitude
Google Local
Google Maps
Google Mini Search Appliance
Google Mobile Application
Google Moderator
Google News
Google Notebook
Google Patent Search
Google Places
Google Product Search
Google Profiles
Google Reader
Google Scholar
Google Search
Google Search Appliance
Google Site Search
Google Sites
Google SketchUp
Google Social Graph API
Google Special Searches
Google TV
Google Talk
Google Toolbar
Google Translate
Google Video
Google Voice
Google Wave
Google Web Toolkit
Google eBooks
Knol
Lively
Nexus One
Nexus S
Orkut
Picasa
Pubsubhubbub
Sidewiki
iGoogle
YouTube
Enterprise Search
 & much much more.

 

Not really sure what you mean by 'on the other hand' they have those things. Adsense/Adwords is their core business. A lot of the things you listed there are small things like browser add ons. Yes, they have made some mistakes (Google Wave & Buzz), and I question how freely they spend $ sometimes, but a good majority of things on that list are great products, many of wich they either monetize through Ads or helps direct people to their core business, or at the very least has helped build the Goole brand. Things like Android, GMail, Google Maps, Google Analytics, Google Alerts, Google Talk, Google Voice, Picasa and others are all outstanding products.

What I don't like seeing Google continuing to try to get into is commerce. Google Shopping is very good, but when they've tried to handle selling products themselves, they've struggled. Them trying to sell the Nexus One themselves was a mess, as they completely overlooked the fact that people will need tech support and customer service that they were not prepared for. While Android is very good, the Android Marketplace continues to be a bit of a mess. I don't have much confidence in their ability to sell things like books and music. Even their Chrome App & Extensions store is pretty damn confusing.

Title: Re: GOOGL - Google
Post by: rkbabang on May 17, 2011, 06:47:14 AM
Personally, I would love to own a car that drives itself.  I would probably pay a 20-50% premium for a car with that feature.

Me too, but I think this has the potential to be a bigger idea than just selling driverless cars for personal use. I think of all the things Google is doing this has the potential to be the most game changing.  If, of course, they can pull it off.  The A.I. would have to be rock solid and just simply work.  Imagine if you could just send your 10yr old off to grandma's 60 miles away alone in the car?  This may even create other options which make the need for most private car ownership uneconomical in comparison for most people.  Imagine a subscription service for everyday vehicles and maybe even fractional ownership service "netcars" for luxury vehicles.  You would always use exactly the vehicle for the task.  If you are going out to dinner with the wife, push a few buttons on your smartphone and a car comes around the corner in a few minutes to pick you up and take you to the restaurant.  After the restaurant you call again and another car comes zipping by to take you home.  Going to the movies with your 3 kids and 6 of their friends you push a few buttons and a 10 passenger vehicle comes and gets you.  Go to the grocery store in a tiny vehicle, come home in one with a large cargo compartment.  Without the need of drivers order pizza you get a pin number a vehicle shows up in your driveway that is just a big box on wheels with a number of heated compartments.  You punch in your pin and one of the compartments pops open, you take out your order, close the compartment, and the vehicle zips off to either the next stop or back to the pizza place.  You need 15 sheets of plywood, you order it online and within 20 minutes a vehicle pulls up in your driveway or jobsite with the wood for you to unload, almost like ordering pizza. Would grocery delivery be cheaper and offered almost everywhere if there was no need to pay drivers? Almost instant delivery of all kinds of things would be more economical.

Think of the mobility issues the very young, very old, and the disabled have in our current society and how this would change their lives.  If this works and works well, you could see fewer cars on the road and a much more efficient transportation system where everyone gets to where they want to go cheaper and easier than now and everyone gets the things they need delivered to them whenever they want them.

This could change almost everything about how we live our daily lives.

--Eric
Title: Re: GOOGL - Google
Post by: VAL9000 on May 17, 2011, 07:05:13 AM
Not really sure what you mean by 'on the other hand' they have those things. Adsense/Adwords is their core business. A lot of the things you listed there are small things like browser add ons. Yes, they have made some mistakes (Google Wave & Buzz), and I question how freely they spend $ sometimes, but a good majority of things on that list are great products, many of wich they either monetize through Ads or helps direct people to their core business, or at the very least has helped build the Goole brand. Things like Android, GMail, Google Maps, Google Analytics, Google Alerts, Google Talk, Google Voice, Picasa and others are all outstanding products.
I meant that it makes it hard to value Google.  The ad business is clear enough.  But all this other stuff is a net cost and determining what the value is can be tricky.  It's harder even to value Google Voice vs. Skype - there's no visibility and the products are partially integrated.  There's no cohesive product strategy (yet), and so the vision of the company's many, many offerings are cloudy.  I didn't say it was net bad.  I think I was pretty clear about what I think we're seeing (process of innovation).

What I don't like seeing Google continuing to try to get into is commerce. Google Shopping is very good, but when they've tried to handle selling products themselves, they've struggled. Them trying to sell the Nexus One themselves was a mess, as they completely overlooked the fact that people will need tech support and customer service that they were not prepared for. While Android is very good, the Android Marketplace continues to be a bit of a mess. I don't have much confidence in their ability to sell things like books and music. Even their Chrome App & Extensions store is pretty damn confusing.
I see commerce as unavoidable for Google.  They aren't very good at it now, but they will figure it out.  It's necessary to capture the full spectrum of mobile platform capabilities (e.g. app store purchases, media purchases).

Here's a thought, does Google's inability to play well with others hold it back from further commercial success?  Nexus and bidding up spectrum are two fine examples in telecom.  A lack of music and movie deals are two more.  The book search deal still another.

They managed to partner with Sony on TV and Sprint on Google Voice, so there are some valid examples of success in that area..  But I'd like some opinions on that idea.
Title: Re: GOOGL - Google
Post by: VAL9000 on May 17, 2011, 07:09:20 AM
rkbabang,

Interesting thoughts.  I came up with another.  I was driving (yes driving!) to work today and got a little irritated with the number of huge 18-wheelers on the highway.  Then I thought, hey, if Google could automate driving, they could own the whole trucking / logistics business.  Result: cheaper, more efficient transit.  There's the power of tech invading yet another industry.
Title: Re: GOOGL - Google
Post by: Liberty on May 17, 2011, 07:41:06 AM
Google seems to live by "release early, release often", and if something doesn't work, it doesn't matter too much..

Apple does its beta testing in private and only releases when things are polished enough.

These two approaches can be valid. Hardware is more permanent, so it needs to be better from the start. But with software, Google's approach works.

And a lot of what they do is just to widen the moat a bit or help the brand's mindshare.
Title: Re: GOOGL - Google
Post by: rkbabang on May 17, 2011, 08:15:20 AM
rkbabang,
Interesting thoughts.  I came up with another.  I was driving (yes driving!) to work today and got a little irritated with the number of huge 18-wheelers on the highway.  Then I thought, hey, if Google could automate driving, they could own the whole trucking / logistics business.  Result: cheaper, more efficient transit.  There's the power of tech invading yet another industry.

Absolutely.  Although I don't envision Google making the vehicles themselves, more them selling/licensing the software and maybe small control modules at most to vehicle manufacturers of all types.  I can't see Google manufacturing an 18 wheeler nor a passenger car. But if they own the market for the automation, they will profit regardless of who makes the vehicles themselves.

--Eric
Title: Re: GOOGL - Google
Post by: Liberty on May 20, 2011, 01:50:14 PM
I thought this piece was pretty good:

http://abovethecrowd.com/2011/03/24/freight-train-that-is-android/

Quote
So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy. In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.
Title: Re: GOOGL - Google
Post by: goldfinger on May 20, 2011, 03:45:59 PM
I thought this piece was pretty good:

http://abovethecrowd.com/2011/03/24/freight-train-that-is-android/

Quote
So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy. In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.
Exactly. It has a great business but it needs to spend energy in diversion wars exactly like Microsoft.
Title: Re: GOOGL - Google
Post by: txlaw on May 21, 2011, 05:57:24 AM
I thought this piece was pretty good:

http://abovethecrowd.com/2011/03/24/freight-train-that-is-android/

Quote
So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy. In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.
Exactly. It has a great business but it needs to spend energy in diversion wars exactly like Microsoft.

I disagree with this assessment.  Android and Chrome/Chrome OS are both moat enhancing and revenue generating projects.

The more people use the Internet/web, the more money Google makes.  Remember, Google doesn't just provide Google services like search, YouTube, Gmail, and Maps.  Google also powers the display of ads on many third party websites.

If Google can accelerate every person's use of the Internet, they will accelerate the overall interaction with Google (through use of Google services and websites that use Google ads and analytics) and make more money.  Developing Android, Chrome and Chrome OS are ways to accelerate the use of the Internet.  That's why Eric Schmidt has said that Android pays for itself.  Much of the new ad revenue that has come online, so to speak, and that will come online has made Android a phenomenal investment.

Think about it this way.  Before iOS and Android, people didn't really use the Internet on anything but their computers.  Now, people can use the Internet on multiple devices and for a bigger slice of their time. 

I'm in the line at the DMV and bored to death, so I might use my Android phone to read some publication, which displays ads delivered by Google.  Or I might watch a video on YouTube.  Or I might do a search for some product I need to get for the weekend.

Very smart.

And it's not free, really.  Advertisers help monetize the software.  And consumers allow Google to collect data on their preferences, either on a personalized basis or in the aggregate.  There's value in information.
Title: Re: GOOGL - Google
Post by: VAL9000 on May 21, 2011, 08:15:40 AM
I disagree with this assessment.  Android and Chrome/Chrome OS are both moat enhancing and revenue generating projects.
I agree with the disagree, but I disagree with both assessments.  I see Android/Chome/Chrome OS as mildly moat enhancing and eventually seriously revenue generating.

My thoughts on these products being mildly moat enhancing come from analogies in the search market to date.  Google was able to dominate search with zero interest in the OS and Browser markets.  Google's market share in search hasn't grown since the wide adoption of Android or the introduction of Chrome. 

Inverting the process, Microsoft's browser has steadily lost market share over time, whereas Chrome and Firefox have steadily gained over time.  Switching the default search engine is so much easier than switching the whole browser, and yet while people are abandoning IE, the effect on search choice has been muted.

I don't see how Google enhances its moat all that much by introducing client-side applications and operating systems, when it's been shown that you can win without them, and you can lose with them.

On the revenue enhancement side, if Google doesn't learn how to make Android seriously profitable for themselves, then it's because they've lost.  I come to this conclusion in a few different ways, but the main ones are 1) there's already a profitable and proven business model for Android, 2) monetizing Android only matters if you win, 3) you can't subsidize forever.

1 - iOS exists.  It is hugely popular and hugely profitable.  You can trace iOS's roots back to the iPod and iTunes, which is how I prefer to see the evolution of this business model.  iOS is the king daddy of media delivery, and Apple manages to both make a huge profit on the hardware, and make a huge and passive profit on the software (media).  If Google can't replicate this same system with Android, they will always be playing catch-up to Apple's media machine.  The scary part is the hold on consumers gets stronger every day: as in, why switch to Android? I would have to repurchase all of my apps, music and movies that I own in iTunes.  Scary view of media "ownership", and a very attractive moat for Apple.

2 - The law of the internet seems to be "capture the market, then monetize" (e.g. twitter, facebook, youtube, linkedin).  If Google fails at the second part, it's because they're still trying to capture the market with a superior product.  View this through the YouTube lens.  This purchase had been heavily subsidized for years, ensuring that Google would stomp out all competition.  Only now that practically no serious competitors remain are they figuring out how to end the cash bleed on this beast.  Android is nascent as a business, but there is at least one model and something will be implemented.

3 - Dovetailing nicely from 2, you really can't continue to subsidize forever.  I know that money flows like water In The Plex, so I'll ignore the basic economic arguments here.  Instead I'll focus on what happens with competition.  If Android is winning with a no-money-made business model, and Apple has a money making business model, well, Apple will win eventually.  Apple will be able to pay more to beat Google at development, at marketing, at incentivizing users, and all other things.  Google subsidizing Android against all that forever is just not possible.  In this case, the economic potentials are really, really, really big.  If you can capture 100% of the media delivery platform, then you become effectively the world's global content provider.  It's such a big business that I can't even begin to compute what it would be worth.  Regardless, the honey pot is enormous, and if you can't figure out a way to make it pay, then you will have it taken away by someone who can.
Title: Re: GOOGL - Google
Post by: Liberty on May 21, 2011, 01:29:48 PM
I don't see how Google enhances its moat all that much by introducing client-side applications and operating systems, when it's been shown that you can win without them, and you can lose with them.

I think it's a defensive move, and might widen the moat even if it doesn't actually increase their market share much. They don't want to lose control over the layer that separates them from their customers. They don't want Apple or Microsoft to somehow say "screw you google, on our hardware/OS, your products will now be hard to use and not the default choice" or "something's not working? you have to go through us to fix it and we'll take our sweet ass time". Unfortunately for them, they haven't found a way in Facebook's walled garden yet...

Right now a lot of people will still switch back to Google, but over time I think such tactics  could erode the moat and brand...
Title: Re: GOOGL - Google
Post by: goldfinger on May 21, 2011, 02:28:47 PM
Quote
If Google can accelerate every person's use of the Internet, they will accelerate the overall interaction with Google (through use of Google services and websites that use Google ads and analytics) and make more money.  Developing Android, Chrome and Chrome OS are ways to accelerate the use of the Internet.  That's why Eric Schmidt has said that Android pays for itself.  Much of the new ad revenue that has come online, so to speak, and that will come online has made Android a phenomenal investment.

Look I have been in this business for 2 decades. I have retro-engineered some Google products for some tactical reasons in the past. A lot of companies want to directly or indirectly increase internet use. Maybe a third of the Silicon Valley is dedicated to that or some of that to some extent somewhere in business models.
What makes users go back to Google products? A combination of psychological presence, functional presence and completeness, product relevance, technological excellence and accessibility. When I speak of diversion wars I mean maintaining relevance and completeness.
However, for many things, I can switch out of Google now. Recently I complemented some searches I made with Bing. I was truly impressed by the results. Many users I know spend their time on Yahoo (legacy) and Facebook (new exciting stuff). That is it! If they get access to search from any of the two and are led to believe that the results are close to as good as with Google they will just not think twice.
I am not attacking or criticizing Google. I am just saying that competitive pressures are higher than estimated most of the time.
Title: Re: GOOGL - Google
Post by: txlaw on May 21, 2011, 02:33:28 PM
My thoughts on these products being mildly moat enhancing come from analogies in the search market to date.  Google was able to dominate search with zero interest in the OS and Browser markets.  Google's market share in search hasn't grown since the wide adoption of Android or the introduction of Chrome. 

Inverting the process, Microsoft's browser has steadily lost market share over time, whereas Chrome and Firefox have steadily gained over time.  Switching the default search engine is so much easier than switching the whole browser, and yet while people are abandoning IE, the effect on search choice has been muted.

I don't see how Google enhances its moat all that much by introducing client-side applications and operating systems, when it's been shown that you can win without them, and you can lose with them.

There are two ways that these projects are moat enhancing.

First, as Liberty argues, establishing a beach head on all devices that need an OS layer is vital to ensure that companies like Microsoft don't have the ability to break GOOG's services or displace them by replacing with their own easy to access services.

Remember, MSFT notoriously tried to: (1) implement a shitty version of Java that would cause Java itself to be abandoned; and (2) dominate in the browser market by taking advantage of the QWERTY factor (see the browser wars).  MSFT did this because  they were afraid that these two technologies would eventually displace or lead to the decreased profitability of the MSFT ecosystem.  "Embrace, extend and exterminate" was the motto at Mr. Softee.

GOOG engineers are keenly aware of this threat and need to make sure that their products are not broken or fail to reach full potential due to not being in the OS layer at all.

Second, developing these projects are moat enhancing because the core Google service, search/augmented reality/AI, is enhanced by playing a large part in the OS layer due to the virtuous cycle aspect of the service.  The more information you soak up, the better your service gets.  The better your service gets, the more information you soak up.

And having client side apps helps too.  Take Google Maps/Google Earth.  Location data is fundamental to AR and AI, and it's obvious that these services make Google more intelligent.

On the revenue enhancement side, if Google doesn't learn how to make Android seriously profitable for themselves, then it's because they've lost.  I come to this conclusion in a few different ways, but the main ones are 1) there's already a profitable and proven business model for Android, 2) monetizing Android only matters if you win, 3) you can't subsidize forever.

Android is already profitable.  

Android has brought in revenue that would not otherwise have accrued to Google.  That's why Eric Schmidt has said that Android pays for itself.  And that's what makes Android so difficult to deal with.  Mobile device manufacturers get to use Android as the OS for their new devices and they get part of the rev share that results from that.  It's a win/win for manufacturers and Google, who have to compete with Apple.

Additionally, we have to remember that there is a temporal element to the monetization of search and other Google services.  Google benefits if you can interact with Google services at any time with ease.  In fact, any time you need to do something, if Google can help you out with that, they have a share of your attention, which they may be able to monetize.

Android, Chrome, and Chrome OS help increase Google's time share on a per capita basis by helping consumers take full advantage of the Internet.

I wouldn't be surprised if MSFT eventually switches to the same biz model for Win Phone.

1 - iOS exists.  It is hugely popular and hugely profitable.  You can trace iOS's roots back to the iPod and iTunes, which is how I prefer to see the evolution of this business model.  iOS is the king daddy of media delivery, and Apple manages to both make a huge profit on the hardware, and make a huge and passive profit on the software (media).  If Google can't replicate this same system with Android, they will always be playing catch-up to Apple's media machine.  The scary part is the hold on consumers gets stronger every day: as in, why switch to Android? I would have to repurchase all of my apps, music and movies that I own in iTunes.  Scary view of media "ownership", and a very attractive moat for Apple.

I would agree that Apple's media platform, ITunes, strengthens Apple's moat.  

However, I would not characterize iOS as tracing its roots to iTunes.  Rather, I see it as a consumer-facing OS layer that traces its roots to OS X, and that represents Jobs and Co's understanding of how things are evolving in a world where ubiquitous connectivity is the norm.  Take a look at Lion, the next version of the MacOS.  You will see that iOS and OS X are converging.

----

The biz model is simply different for Apple.  Both iOS and Android are profitable for their companies.
Title: Re: GOOGL - Google
Post by: txlaw on May 21, 2011, 02:48:42 PM
Quote
If Google can accelerate every person's use of the Internet, they will accelerate the overall interaction with Google (through use of Google services and websites that use Google ads and analytics) and make more money.  Developing Android, Chrome and Chrome OS are ways to accelerate the use of the Internet.  That's why Eric Schmidt has said that Android pays for itself.  Much of the new ad revenue that has come online, so to speak, and that will come online has made Android a phenomenal investment.

Look I have been in this business for 2 decades. I have retro-engineered some Google products for some tactical reasons in the past. A lot of companies want to directly or indirectly increase internet use. Maybe a third of the Silicon Valley is dedicated to that or some of that to some extent somewhere in business models.
What makes users go back to Google products? A combination of psychological presence, functional presence and completeness, product relevance, technological excellence and accessibility. When I speak of diversion wars I mean maintaining relevance and completeness.
However, for many things, I can switch out of Google now. Recently I complemented some searches I made with Bing. I was truly impressed by the results. Many users I know spend their time on Yahoo (legacy) and Facebook (new exciting stuff). That is it! If they get access to search from any of the two and are led to believe that the results are close to as good as with Google they will just not think twice.
I am not attacking or criticizing Google. I am just saying that competitive pressures are higher than estimated most of the time.

I don't disagree that competitive pressures are high.  There is room for more than one big dog in the search/AI/AR space.  In fact, in the past I have characterized Google search as Coke, Bing as Pepsi, and Wolfram Alpha as Dr. Pepper.  Facebook, no doubt, will be gunning for Google as well.

And there's room for other competitors for other Google services.

However, the pie is greatly expanding for this market.  To quote Patrick Byrne (aka Wacky Patty): “It’s like swimming around in Lake Michigan and asking did you bump into each other. The world is so much bigger than anyone gets. It’s so enormous.”

Android is helping Google capture market/time share, and this market/time share is already being monetized.  Therefore, to say that Android, Chrome, and Chrome OS are merely defensive products is incorrect.  That's why I disagreed with the article.
Title: Re: GOOGL - Google
Post by: goldfinger on May 21, 2011, 03:00:41 PM
Quote
If Google can accelerate every person's use of the Internet, they will accelerate the overall interaction with Google (through use of Google services and websites that use Google ads and analytics) and make more money.  Developing Android, Chrome and Chrome OS are ways to accelerate the use of the Internet.  That's why Eric Schmidt has said that Android pays for itself.  Much of the new ad revenue that has come online, so to speak, and that will come online has made Android a phenomenal investment.

Look I have been in this business for 2 decades. I have retro-engineered some Google products for some tactical reasons in the past. A lot of companies want to directly or indirectly increase internet use. Maybe a third of the Silicon Valley is dedicated to that or some of that to some extent somewhere in business models.
What makes users go back to Google products? A combination of psychological presence, functional presence and completeness, product relevance, technological excellence and accessibility. When I speak of diversion wars I mean maintaining relevance and completeness.
However, for many things, I can switch out of Google now. Recently I complemented some searches I made with Bing. I was truly impressed by the results. Many users I know spend their time on Yahoo (legacy) and Facebook (new exciting stuff). That is it! If they get access to search from any of the two and are led to believe that the results are close to as good as with Google they will just not think twice.
I am not attacking or criticizing Google. I am just saying that competitive pressures are higher than estimated most of the time.

I don't disagree that competitive pressures are high.  There is room for more than one big dog in the search/AI/AR space.  In fact, in the past I have characterized Google search as Coke, Bing as Pepsi, and Wolfram Alpha as Dr. Pepper.  Facebook, no doubt, will be gunning for Google as well.

And there's room for other competitors for other Google services.

However, the pie is greatly expanding for this market.  To quote Patrick Byrne (aka Wacky Patty): “It’s like swimming around in Lake Michigan and asking did you bump into each other. The world is so much bigger than anyone gets. It’s so enormous.”

Android is helping Google capture market/time share, and this market/time share is already being monetized.  Therefore, to say that Android, Chrome, and Chrome OS are merely defensive products is incorrect.  That's why I disagreed with the article.

Understand now. Your points make total sense. You are right!
Title: Re: GOOGL - Google
Post by: VAL9000 on May 21, 2011, 03:37:53 PM
Like I said, I think that this stuff is mildly moat enhancing, but I don't think that the examples that have been brought up are terribly significant in terms of defending AdWords and AdSense (which I consider the castle).  I give credit to preemptively defending against technical restrictions and adding to the pile of data that Google can mine to improve its search.  But I can't say that I agree with the idea that aggressively pursuing the mobile operating space is really about making search/context that much better, or defaulted to Google on those devices.  The payoff is tiny compared to what's possible.

And to be sure, Android's "profitability" is a joke.  This isn't a business worth caring about in its current state.  What I can tease from Schmidt's cryptic statement is that if you assign the ads clicked on by Android users to the Android business unit, then it's profitable.  This seems like a weak attempt to appease people that you shouldn't need to appease.

However, I would not characterize iOS as tracing its roots to iTunes.  Rather, I see it as a consumer-facing OS layer that traces its roots to OS X, and that represents Jobs and Co's understanding of how things are evolving in a world where ubiquitous connectivity is the norm.  Take a look at Lion, the next version of the MacOS.  You will see that iOS and OS X are converging.
iOS isn't anything without the App Store, so you can't really break them up.  The App Store is iTunes for software.  Hence, I trace the business model roots back to iTunes (not the software roots, which I think is what you're getting at, which on that we can agree).  iOS and OS X converging makes a lot of sense and will further strengthen the ecosystem as well as Apple's moat.

I think the major difference we have is not in what Android does..  I agree that it does all of the things you say that it does.  My main point is that Android isn't a moat.  It's a castle.  If Google misses the opportunity to make Android hugely profitable then it will be a loss for everyone.  Part of the reason why I hate myself for buying Apple devices is because I can see the hole that I'm digging myself into.  Pretty soon I'll have more to lose by switching from Apple than to gain - even if the go-to-device were free.  The world needs a serious competitor to the Apple ecosystem, otherwise the freedom that we enjoy today on our PCs will be seriously jeopardized in the "post-PC era".
Title: Re: GOOGL - Google
Post by: txlaw on May 22, 2011, 10:42:06 PM
And to be sure, Android's "profitability" is a joke.  This isn't a business worth caring about in its current state.  What I can tease from Schmidt's cryptic statement is that if you assign the ads clicked on by Android users to the Android business unit, then it's profitable.  This seems like a weak attempt to appease people that you shouldn't need to appease.

There's really nothing cryptic about Schmidt's statement.  Google's goal is to organize and make accessible the world's information, and to play a major part in AI/augmented reality.  They monetize this core service they are providing to the world by gaining users' attention so that they are able to serve up advertisements to the users.  Things they do that increase Google's timeshare with consumers will increase revenue. 

The concept of a "loss leader" applies here.  Android is not profitable if you think of profitability in a very simplistic manner.  Take, for example, the typical movie theater business.  The actual showing of movies is mildly profitable or just break even for the theater.  They make most of their money on concessions and advertising.  But showing movies is a necessary step for being in the movie theater business.

Android can be thought of as a loss leader that makes tons of money for Google by increasing consumers' use of the web.  What is good for the web is good for Google.  And Android, like iOS, absolutely has increased consumers' use of the web during their day.

Have you ever wondered what the hell Google is trying to do with its ultra high speed fiber to the home project?  It's not just because they love to burn money for cool stuff and to demonstrate to the public just how much innovation we've missed out on due to the machinations of the old line telecom industry.  Google intends to light a fire under the telecom and technology world and accelerate people's use of the cloud because Google is not just a "search company," it's also a cloud infrastructure provider.  There probably won't be direct cash returns from the Google fiber project, but in the long run, there will be immense returns if they can show just how much better the Internet could be in the US for consumers.

If Google misses the opportunity to make Android hugely profitable then it will be a loss for everyone.  Part of the reason why I hate myself for buying Apple devices is because I can see the hole that I'm digging myself into.  Pretty soon I'll have more to lose by switching from Apple than to gain - even if the go-to-device were free.  The world needs a serious competitor to the Apple ecosystem, otherwise the freedom that we enjoy today on our PCs will be seriously jeopardized in the "post-PC era".

The world will be much better if Android never becomes hugely profitable in the sense that you seem to be arguing for (i.e., licensing fees a la Windows).  Android should remain essentially free for manufacturers to adopt and adapt for various uses. 

The openness and low-cost nature of Android will increase its penetration into the market and will eventually allow Android to compete with iOS on the user experience front.  Even Woz has said that he thinks Android will eventually become the dominant mobile device platform.

Android doesn't need to be monetized directly because, as I said before, what's good for the web is good for Google.
Title: Re: GOOGL - Google
Post by: Liberty on May 22, 2011, 11:47:57 PM
Here's a detail from the 2010 GOOG AR that I found interesting: 48% of revenues are from the USA, 52% from the rest of the world. Nice geographical diversification.
Title: Re: GOOGL - Google
Post by: VAL9000 on May 23, 2011, 06:16:52 PM
There's really nothing cryptic about Schmidt's statement.  Google's goal is to organize and make accessible the world's information, and to play a major part in AI/augmented reality.  They monetize this core service they are providing to the world by gaining users' attention so that they are able to serve up advertisements to the users.  Things they do that increase Google's timeshare with consumers will increase revenue. 

The concept of a "loss leader" applies here.  Android is not profitable if you think of profitability in a very simplistic manner.  Take, for example, the typical movie theater business.  The actual showing of movies is mildly profitable or just break even for the theater.  They make most of their money on concessions and advertising.  But showing movies is a necessary step for being in the movie theater business.
Maybe the statement itself isn't cryptic, but the assignment of revenues is.  I like the theater analogy so let's go with that.  In the theater business, Android is the movie theater and search is a movie.  Google plays the part of both theater builder/operator and movie producer.  What Schmidt is doing is assigning the profitability of the movie production business to the movie theater that it was played in.  I think it's a flawed assignment because it assumes that if they didn't build these theaters, these movie goers would stay home instead.  I don't think that's true.  I think the number of total searches that Android's existence truly accounts for is somewhere between 0% and 100% of the searches performed on Android.  That is, the assignment is flawed to the degree that the number of users who, in the absence of Android, would have purchased a smartphone anyway and searched on Google anyway (Keep in mind, Google owns 97% of the mobile search market, so this isn't a trivial amount).

It's not that Android isn't profitable if looked at this way, it probably is. I think Android has been good for Google.  I just don't really agree with this kind of arbitrary revenue assignment.  I don't see Chrome or FireFox or IE getting credit for their various search enabling contributions to Google's bottom line.  To me, the whole statement seems disingenuous - why would Google need to justify Android at all?

The world will be much better if Android never becomes hugely profitable in the sense that you seem to be arguing for (i.e., licensing fees a la Windows).  Android should remain essentially free for manufacturers to adopt and adapt for various uses. 
I don't think I suggested anywhere that this should be the model.  I said that Google should look to Apple for the model of how to monetize Android.  Apple's model obviously doesn't include any software licensing.

The model that I'm suggesting is to provide a platform where commerce can take place.  Android runs on phones and tablets, and it's also the basis for GoogleTV.  The potential that I see here is in media (music, movies, applications) - whether it's cloud streaming or standard rights-driven, or if it's free or ad-supported.  Google's opportunity with Android is to create a market and a platform that fosters creativity and commerce, and for doing so they are justified in making a profit.  Like Apple, Google can sit between the customer and the media provider, sucking up little percentages of transactions..  except with Android they have the considerable advantage of being device independent and more widely adopted.  Currently, the solution for the customer is sub-par.  The whole process of buying media is fragmented and under-served.  Google doesn't really have their game together on the media side.  It's disappointing but I think they can fix it.  To use the theater analogy, to turn a good profit in the movie theater business, Google needs to get its concession stands in order.
Title: Re: GOOGL - Google
Post by: txlaw on May 23, 2011, 08:06:19 PM
Maybe the statement itself isn't cryptic, but the assignment of revenues is.  I like the theater analogy so let's go with that.  In the theater business, Android is the movie theater and search is a movie.  Google plays the part of both theater builder/operator and movie producer.  What Schmidt is doing is assigning the profitability of the movie production business to the movie theater that it was played in.  I think it's a flawed assignment because it assumes that if they didn't build these theaters, these movie goers would stay home instead.  I don't think that's true.  I think the number of total searches that Android's existence truly accounts for is somewhere between 0% and 100% of the searches performed on Android.  That is, the assignment is flawed to the degree that the number of users who, in the absence of Android, would have purchased a smartphone anyway and searched on Google anyway (Keep in mind, Google owns 97% of the mobile search market, so this isn't a trivial amount).

The movie theater example was used to demonstrate how a loss leader works.  I could have used the razor and blades model or the selling of burgers at cost to sell high margin fries and beverages as examples, as well.  Let's not get too cute with the analogy.

Look, the real question is whether consumers would use Google search, browse the web, watch videos on YouTube.com, or watch videos on third party sites powered by YouTube as often if there were no iOS or Android.  I don't think they would.  

It's pretty well known that when you reduce the latency of a website, people will be more likely to use the website more often.  The reduction of latency across the web, in general, has gotten people to use the web far more often than they used to.  It's not just the proliferation of content that has caused increase use of the Internet.  It's also the faster speed at which we are able to access the info, apps, and media that has caused us to use the Internet more and more.  

The demand for/interaction with Google services goes up when the web is made easier and cheaper to use, and Android does that.

It's not that Android isn't profitable if looked at this way, it probably is. I think Android has been good for Google.  I just don't really agree with this kind of arbitrary revenue assignment.  I don't see Chrome or FireFox or IE getting credit for their various search enabling contributions to Google's bottom line.  To me, the whole statement seems disingenuous - why would Google need to justify Android at all?

Assigning credit to Chrome and Firefox is warranted, and if you were to ask Google people why they developed the Chrome browser or why they supported Firefox, they would say they did it to make the web better.  There's no question in my mind, at least, that Chrome and Firefox have made the web experience much better.  IE?  The only reason it has gotten better is because of Firefox and Chrome.  

Better web, better for Google.  Not just for search but for all Google services.

I don't think I suggested anywhere that this should be the model.  I said that Google should look to Apple for the model of how to monetize Android.  Apple's model obviously doesn't include any software licensing.

The model that I'm suggesting is to provide a platform where commerce can take place.  Android runs on phones and tablets, and it's also the basis for GoogleTV.  The potential that I see here is in media (music, movies, applications) - whether it's cloud streaming or standard rights-driven, or if it's free or ad-supported.  Google's opportunity with Android is to create a market and a platform that fosters creativity and commerce, and for doing so they are justified in making a profit.  Like Apple, Google can sit between the customer and the media provider, sucking up little percentages of transactions..  except with Android they have the considerable advantage of being device independent and more widely adopted.  Currently, the solution for the customer is sub-par.  The whole process of buying media is fragmented and under-served.  Google doesn't really have their game together on the media side.  It's disappointing but I think they can fix it.  To use the theater analogy, to turn a good profit in the movie theater business, Google needs to get its concession stands in order.

I don't consider applications media, but I suppose if you are going to take the position that iTunes is a platform, then you have to characterize apps as media.  I don't think that really makes much sense, though.  iTunes is merely a storefront that is integrated very tightly with the iOS platform.

There's really no reason why anyone should have to buy their media or apps from a platform provider such as Google or Apple, where the platform provider gets some cut of the revenues.  You might argue that buying through the platform providers allows for a less fragmented experience.  But why does this less fragmented experience have to come from either Google or Apple?  

I'd love to see Spotify come to the US and take market share away from iTunes.  I like having Netflix as my main source of professionally created video rather than iTunes.  Both these services reduce the fragmentation that you're talking about.  

YouTube.com is a great service that provides a "platform" for user generated video.  It happens to be owned by Google, but that didn't have to be the case.  

Amazon is actually trying to be a major storefront for Android apps.  I don't think it would be so bad if Amazon succeeds because Amazon will be much better than either Apple or Google at allowing the best apps to rise to the top.

You're right that Google does not have its game together when it comes to partnering with content owners.  But that's really not their expertise.  It would be nice for shareholders if they could expand on that (and they're trying), but if all they get out of Android is the expansion of their core mission, we will do just fine.
Title: Re: GOOGL - Google
Post by: DCG on May 24, 2011, 05:49:08 AM
Oh no...this thread has been lvlt'd.
Title: Re: GOOGL - Google
Post by: txlaw on May 24, 2011, 08:31:06 AM
A good example of why Google needs to be involved in developing mobile device OS's:

http://arstechnica.com/open-source/news/2011/05/new-mobile-web-google-maps-highlights-sorry-state-of-native-ios-app.ars

Apple's lack of updates to the native iOS [Google Maps] app is another indication that the company intends to create its own mapping application. Around a year ago, Apple acquired both the online mapping company Placebase and mapping mashup firm Poly9, which was about the same time that the native iOS app started to diverge, capability-wise, from the desktop and Android versions. Lately, speculations have arisen that Apple will create mapping features that integrate with a revamped MobileMe.
Title: Re: GOOGL - Google
Post by: txlaw on May 24, 2011, 08:56:28 AM
PS  Hopefully it will dawn on the mayors around the world that they too can usurp the last mile guys and become the new at&t or Comcast in their towns.

Unfortunately, the last mile guys will fight tooth and nail to make sure that that doesn't happen, including getting legislation passed that prevents municipalities from effectively deploying fiber.

See, e.g., http://arstechnica.com/tech-policy/news/2011/03/cable-backed-anti-muni-broadband-bill-advances-in-north-carolina.ars

That's why we need forward thinking companies like GOOG to break the stranglehold on the last mile so that both consumers and GOOG will benefit in the long run.
Title: Re: GOOGL - Google
Post by: VAL9000 on May 24, 2011, 09:31:56 AM
The movie theater example was used to demonstrate how a loss leader works.  I could have used the razor and blades model or the selling of burgers at cost to sell high margin fries and beverages as examples, as well.  Let's not get too cute with the analogy.
It wouldn't matter which analogy you used..  It's not me getting cute with the analogy, it's Schmidt getting cute with the revenue.  The assignment of revenue to Android means that you need to unassign it from search.  It doesn't sit well with me because there's no consistency in reporting along those lines.  It's a one-off sound bite, one that I think is unnecessary.

Look, the real question is whether consumers would use Google search, browse the web, watch videos on YouTube.com, or watch videos on third party sites powered by YouTube as often if there were no iOS or Android.  I don't think they would.  
I agree, but the question is to what degree with regards to Android.  For me, I don't look at the numbers that way.  I see search as search and people use it because it's good.  Android is a defense mechanism but I think a revenue generator primarily.  I could be wrong, but that's life with opinions :)

I don't consider applications media, but I suppose if you are going to take the position that iTunes is a platform, then you have to characterize apps as media.  I don't think that really makes much sense, though.  iTunes is merely a storefront that is integrated very tightly with the iOS platform.

There's really no reason why anyone should have to buy their media or apps from a platform provider such as Google or Apple, where the platform provider gets some cut of the revenues.  You might argue that buying through the platform providers allows for a less fragmented experience.  But why does this less fragmented experience have to come from either Google or Apple?  

I consider apps media because they act roughly the same from the platform perspective.  You pick from a catalog, pay for a download, suck it in over the web, etc.  It's not traditional media and there's definitely a gradient running from music/movies, to video games, to newspaper apps, to productivity apps.  That is, the thing that looks most like media is former, and the bit that looks the least like media is the latter.  It's just a convenient label.

Buying through the platform provider isn't required, but giving up the opportunity would be waste.  They can do it, and they should do it.  I think they will do it.  Look at the next step in Android's evolution: NFC.  Android acting as a credit card.  I don't see Google saying "buy an android, and then find a third party provider to run your credit card transactions through at a retailer."  It just doesn't jive.  An integrated solution is so much better.  And frankly I'd feel much better if I only had to give my credit card information once to a single payment processor with a lot on the line to secure that payment, rather than give it to a bunch of different small vendors.  Sony is a good example of what happens when a bunch of amateurs achieve scale in credit card processing.
Title: Re: GOOGL - Google
Post by: txlaw on May 24, 2011, 10:00:19 AM
Some more color from Schmidt on building platforms:

http://news.cnet.com/8301-30685_3-20065613-264.html
Title: Re: GOOGL - Google
Post by: VAL9000 on May 25, 2011, 08:45:13 AM
Some more color from Schmidt on building platforms:

http://news.cnet.com/8301-30685_3-20065613-264.html

The Chrome web app store reads to me like it's similar to the iTunes business from Google's perspective.  Offer a store for a captive market and make revenue by charging a fee based on the transactions.

Regardless, it looks like we'll find out part of the answer to the Android revenue stream riddle soon:

http://online.wsj.com/article/SB10001424052702304066504576343613260587314.html?KEYWORDS=android+nfc

Last week, I'd have said firmly that Google would take a cut of these payments (and other payments), and that's how they'll make money on Android.

However, your arguments have been really well formed and insightful...  so I think it's equally possible that during this unveiling Google will say that they won't take a cut, and instead rely on point-of-sale advertising/couponing to drive revenue for Android.  I like this model because it is significantly more aligned with the Android product offering - the search reassignment of revenue didn't do it for me (for reasons stated).  I can also see a similar advertising model applied to app store media, although I don't think it would be as effective as the traditional couponing model.

So, we'll see, but either way I appreciate you taking the time to debate the various revenue models with me.
Title: Re: GOOGL - Google
Post by: txlaw on May 25, 2011, 04:37:02 PM
Some more color from Schmidt on building platforms:

http://news.cnet.com/8301-30685_3-20065613-264.html

The Chrome web app store reads to me like it's similar to the iTunes business from Google's perspective.  Offer a store for a captive market and make revenue by charging a fee based on the transactions.

Regardless, it looks like we'll find out part of the answer to the Android revenue stream riddle soon:

http://online.wsj.com/article/SB10001424052702304066504576343613260587314.html?KEYWORDS=android+nfc

Last week, I'd have said firmly that Google would take a cut of these payments (and other payments), and that's how they'll make money on Android.

However, your arguments have been really well formed and insightful...  so I think it's equally possible that during this unveiling Google will say that they won't take a cut, and instead rely on point-of-sale advertising/couponing to drive revenue for Android.  I like this model because it is significantly more aligned with the Android product offering - the search reassignment of revenue didn't do it for me (for reasons stated).  I can also see a similar advertising model applied to app store media, although I don't think it would be as effective as the traditional couponing model.

So, we'll see, but either way I appreciate you taking the time to debate the various revenue models with me.


Yup, tomorrow will be interesting.

Always good to get differing views of a holding because it forces you really think through your analysis. 
Title: Re: GOOGL - Google
Post by: VAL9000 on May 26, 2011, 10:04:53 AM
Yup, tomorrow will be interesting.

Always good to get differing views of a holding because it forces you really think through your analysis. 
I just saw that Google isn't making money on payments, so it looks like it's the couponing model.

Related, Groupon just got smoked.
Title: Re: GOOGL - Google
Post by: txlaw on May 26, 2011, 10:19:20 AM
Yup, tomorrow will be interesting.

Always good to get differing views of a holding because it forces you really think through your analysis. 
I just saw that Google isn't making money on payments, so it looks like it's the couponing model.

Related, Groupon just got smoked.


Groupon should have taken the offer.  What a bunch of idiots. 
Title: Re: GOOGL - Google
Post by: VAL9000 on May 26, 2011, 10:39:38 AM
Groupon should have taken the offer.  What a bunch of idiots. 
Well at least Google Wallet explains what they were thinking, offering $6bn for Groupon.
Title: Re: GOOGL - Google
Post by: Liberty on May 26, 2011, 07:29:24 PM
http://www.bloomberg.com/news/2011-05-26/google-says-demand-surges-for-video-advertising-on-partner-website-network.html

Quote
Google Inc. (GOOG) said it has doubled the number of video ads that it places on partner sites in the past year, a sign it’s making headway in a push to expand display advertising.

Demand for video ads also has boosted Google’s AdMob network, which targets applications and websites on mobile devices. Requests for the spots have grown an average of more than 70 percent month to month since July, the company said.
Title: Re: GOOGL - Google
Post by: Viking on June 16, 2011, 01:19:36 PM
How are people valuing Google? (I wonder if holding equal amounts of MSFT and Google at current prices does not lower risk and still provides outsized return potential over next few years?)

2010 Act Op Earnings = $29.62 (all from RBC)
2011 Est Op Earnings = $32.18
2012 Est Op Earnings = $37.62
Net Cash per Share = $97.00

Share Price (June 16) = $501.00
Est 2011 Op Earnings PE = 15.6; after cash 2011 PE = 12.6

1.) The first hurdle is how do you value their cash hoard? One way is to assume all is international and reduce by 35% (tax rate); $97 - 35% = $62/share; after cash 2011 PE = 13.6
2.) How good is management at deployment of retained earnings? Incomplete, as it just looks to be building up as cash on the balance sheet.
3.) Is management good? Yes (they dominate their main markets)
4.) Is management shareholder friendly? Doesn't look like it to me; if I had one really big immediate concern this would be it
5.) Is there a moat? Yes, if Charlie's comments are to be believed.
6.) Business ecomonics good? Look great.  
7.) Primary risk? Perhaps lack of social angle (i.e. Facebook).
Title: Re: GOOGL - Google
Post by: Hester on June 16, 2011, 02:47:18 PM
GOOG is definitely getting attractive. I'm not big on forward earnings, but even using trailing earnings they are making at least $27 per share. Putting a tax discount on the net cash, they are at a 16 multiple.

 The way I look at it is, the market's historic (that is to say over the last few decades) after tax multiple is about 16-17ish. So even on a conservative, tax discounted ex-cash trailing multiple they are selling for the same valuation as the market historically. Yet, they have better growth and a much higher quality business. A security's reward should match it's risk, and if GOOG's business model has less risk than the average stock, why are they selling at the same valuation? For a higher quality business to thus be efficiently priced, it should sell at a higher multiple than the average business, because future earnings are safer and have a higher probability of occuring.

Investors are offered the chance to buy, in Munger's words, the highest moat business in the world, at the same price as an average business. Doesn't make any sense.
Title: Re: GOOGL - Google
Post by: Viking on June 16, 2011, 04:47:35 PM
Hester, I like your thinking.

My learning over the last year has been to stop messing around with average companies trading at steep discounts. Too much work and too much risk. I am going to try and limit my search to great companies and buy them when they get reasonably cheap (hence my interest in Google). I would rather spend my time learning as much as I can about industry leaders; my experience is they all evenually go on sale (over a 12 to 24 month time horizon); maybe not crazy cheap but on sale.
Title: Re: GOOGL - Google
Post by: bargainman on June 16, 2011, 09:10:13 PM
Not sure if this was posted, but here's a look into what they've been planning with their cash:

http://www.businessweek.com/magazine/content/10_23/b4181033582670.htm
Title: Re: GOOGL - Google
Post by: Liberty on June 17, 2011, 11:42:23 AM
Quote
Reuters reported that Oracle Corporation is seeking damages 'in the billions of dollars' from Google Inc., in a patent lawsuit over the smartphone market, according to a court filing. The disclosure on Thursday was the first time either side publicly mentioned the cumulative scale of Oracle's damages claims. Barring any settlements, a trial between Oracle and Google is expected to begin by November. Google has called an Oracle damages report "unreliable and results-oriented," and asked a U.S. judge in San Francisco to ignore it, court documents show. In disputing Oracle's methodology, Google also asked the court to keep private some damages information Google disclosed in a court filing. Oracle then accused Google of trying to conceal the fact Oracle's damages claims in the case are in the billions, according to a document filed on Thursday. Oracle said it did not object to having the information about its damages become public.

http://www.reuters.com/finance/stocks/GOOG.O/key-developments/article/2345579
Title: Re: GOOGL - Google
Post by: Liberty on June 20, 2011, 10:16:53 AM
Nibbled on some GOOG today. I agree with Charlie Munger on the size of their moat, and I think they'll also do pretty well in mobile and cloud services. Their ad platform is basically infrastructure now, and I don't really see what could kill it in the next decade, so they should keep capturing a good fraction of the growth in advertising online and on mobile (with nice margins) for the foreseeable future.
Title: Re: GOOGL - Google
Post by: JAllen on June 20, 2011, 11:43:11 AM
Where has Charlie Munger discussed Google's moat?
Title: Re: GOOGL - Google
Post by: Viking on June 20, 2011, 11:56:34 AM
www.marketwatch.com/story/buffett-munger-praise-googles-moat (http://www.marketwatch.com/story/buffett-munger-praise-googles-moat)
Title: Re: GOOGL - Google
Post by: JAllen on June 20, 2011, 01:39:27 PM
Thanks guys!  Somehow I missed that....  I don't perceive it to be that big myself but going to have another gander  ::)
Title: Re: GOOGL - Google
Post by: Liberty on June 20, 2011, 01:43:43 PM
And eventually all the data centers will be connected to allow the end users device to do voice and visual searches.

Google's way ahead of you. Voice and image searches, for both mobile and desktop:

http://googleblog.blogspot.com/2011/06/knocking-down-barriers-to-knowledge.html
Title: Re: GOOGL - Google
Post by: goldfinger on June 20, 2011, 02:11:33 PM
And eventually all the data centers will be connected to allow the end users device to do voice and visual searches.

Google's way ahead of you. Voice and image searches, for both mobile and desktop:

http://googleblog.blogspot.com/2011/06/knocking-down-barriers-to-knowledge.html

Yes but Microsoft is there too and believe it or not it actually performs better technically than Google on some areas of search!

But the problem is not the technology that both have, it is the point of access. Skype acquisition will actually surprise in the long run
as its possible applications are many and dreadful for competitors. One thing to consider is that the PC is going to look more and more
like a tablet or small portable device in the future but it will still keep the competitive advantage of local computing power. Battery life is expanding,
Intel and AMD and PC makers are investing tremendous amounts of money to perfect this type of machines in power, size, weight, capabilities etc...
Add advanced User Interfaces, super reliable network communication channels and software, sexy designs and you get a device that could be the one that consolidates the multi-device market one day... With Skype and similar communication software you get super phones among other things!
Title: Re: GOOGL - Google
Post by: Liberty on June 20, 2011, 03:25:52 PM
Yes but Microsoft is there too and believe it or not it actually performs better technically than Google on some areas of search!

Could you point me to where that's possible? I haven't found voice search or search by image on Bing. Thanks.

Google has those features live on its site, I've used both today.
Title: Re: GOOGL - Google
Post by: goldfinger on June 20, 2011, 06:01:19 PM
Yes but Microsoft is there too and believe it or not it actually performs better technically than Google on some areas of search!

Could you point me to where that's possible? I haven't found voice search or search by image on Bing. Thanks.

Google has those features live on its site, I've used both today.

Go to Images on www.bing.com. Voice I haven't investigated but they claim to be ready.
I believe you should read what Mindy Mount (VP and CFO of MSFT online division) had to say in a recent conference.
Just go there http://www.microsoft.com/investor/default.aspx and go to the Events frame, there is a transcript there of her interview there. Actually read Cowen too...
Of course they are going to talk their book, but only to a certain extent.
The other part of my answer was to make you think about the fact that PCs may not be dead at all... And Xbox is a gift made in heaven to increase the consumer business.
Title: Re: GOOGL - Google
Post by: Liberty on June 20, 2011, 06:22:40 PM
The image section of Bing doesn't have any obvious way to do a search by image (either to drag and drop an image, or upload it, or send an image URL) the way that Google's new Image Search does. Maybe it's because I'm in Canada..? Can anyone in the US confirm that Bing allows image search in the way that Google now allows?
Title: Re: GOOGL - Google
Post by: goldfinger on June 20, 2011, 06:28:43 PM
And by the way, Vista introduced advanced speech recognition APIs that work pretty well. In the world of Speech Recognition some people now recognize they do not need to buy Dragon for example as Windows 7 native speech recognition features are very functional. I know that Google and MSFT "shared" some of the scientists that worked on those algorithms.  ;D
So it is only a matter of time until more advanced features get released. Again Mindy gives a good overview of the strategy with Bing.
Title: Re: GOOGL - Google
Post by: goldfinger on June 20, 2011, 06:30:41 PM
One last thing to understand with search: it is the impact of social networks. The partnership with Facebook will bring some competitive advantages there.
Title: Re: GOOGL - Google
Post by: handycap5 on June 21, 2011, 04:47:42 AM
I've come to the conclusion that search engine market share seems to gravitate toward monopoly-like outcomes. 

I don't know how reliable these market share statistics are, but observe how steady world-wide market share has been for the last two years: Google 82-85%, Bing 3-4%.  http://marketshare.hitslink.com/search-engine-market-share.aspx?spider=1&qprid=5

Also, in the attached sheet, observe Google market share by country world-wide: http://googlesystem.blogspot.com/2009/03/googles-market-share-in-your-country.html 

It is amazing that Google has 65%+ market share nearly everywhere in the world, except for: Russia, China and satellites, South Korea, and Japan (Malaysia with large Chinese populatin is a special situation).  And in those geographies, Google tends to play the role of the distant follower (sub 25%) that other search engines play in geographies where Google dominates.  I don't think these outcomes are the result of better search results per se.  Instead, one search engine appears to occupy the dominant "mind share" and usage position which appears exceedingly defensible against all "me too" competitors. 

Without a big revolutionary shift in the technology or user behavior, Google appears to be a natural monopoly.  I would love to hear the empirically-based counter-arguments.
Title: Re: GOOGL - Google
Post by: DCG on June 21, 2011, 05:34:46 AM
I've come to the conclusion that search engine market share seems to gravitate toward monopoly-like outcomes. 

I don't know how reliable these market share statistics are, but observe how steady world-wide market share has been for the last two years: Google 82-85%, Bing 3-4%.  http://marketshare.hitslink.com/search-engine-market-share.aspx?spider=1&qprid=5

Also, in the attached sheet, observe Google market share by country world-wide: http://googlesystem.blogspot.com/2009/03/googles-market-share-in-your-country.html 

It is amazing that Google has 65%+ market share nearly everywhere in the world, except for: Russia, China and satellites, South Korea, and Japan (Malaysia with large Chinese populatin is a special situation).  And in those geographies, Google tends to play the role of the distant follower (sub 25%) that other search engines play in geographies where Google dominates.  I don't think these outcomes are the result of better search results per se.  Instead, one search engine appears to occupy the dominant "mind share" and usage position which appears exceedingly defensible against all "me too" competitors. 

Without a big revolutionary shift in the technology or user behavior, Google appears to be a natural monopoly.  I would love to hear the empirically-based counter-arguments.

Hi handycap5,

The empirical evidence is right before your eyeballs, with the newly formed partnership of Microsoft/Skpe & Comcast. The way people around the world will soon be searching in a new advanced way!

Skype announced that the companies have entered into a strategic partnership that will enable Comcast customers to communicate with family and friends through HD video calling on their television. Comcast users will soon be able to make and receive Skype video calls from their television, whether their contacts use Skype on their home TVs, PCs or compatible smartphones and tablet computers.

And how is that going to have any effect on search engine traffic?
Title: Re: GOOGL - Google
Post by: handycap5 on June 21, 2011, 05:40:13 AM
Let's not digress to suppositions; we can each make our own prognostications - that's what makes a market!  I'm looking for data or facts that call into question my "search engines tend toward monopoly-like positions" thesis.  Otherwise, the numbers speak for themselves.
Title: Re: GOOGL - Google
Post by: DCG on June 21, 2011, 06:12:36 AM

This is all NEW, fresh out of the Xbox, so the data is still being stored in the center of our minds. Search traffic will be directed to the new way of searching via Voice over the internet, combined with IPTV. It just doesn't get any better than that. I don't have all the answers. I'm just thinking about this new & big revolutionary shift in the technology.

I just have a hard time seeing that happening, at least to the point where it would erode Google's traffic. That technology already exists to an extent, and isn't used much. Things like Skype and Comcast collaborating has the potential to change the way people make phone calls (although I don't really see that really happening on any significant level either), not really search engine traffic.

Regarding Internet Television, I think it has the potential to change the way people search for and watch TV shows and movies, not how they search the internet. Again, all this technology has been out there for several years. Just because it might be cool (for a few minutes) doesn't mean its useful.
Title: Re: GOOGL - Google
Post by: PlanMaestro on June 21, 2011, 06:36:32 AM
Let's not digress to suppositions; we can each make our own prognostications - that's what makes a market!  I'm looking for data or facts that call into question my "search engines tend toward monopoly-like positions" thesis.  Otherwise, the numbers speak for themselves.

Actually, i think the burden of proof should be on the one making the statement that Google is a natural monopoly. Global monopolies are very rare and most concentrated industries evolve to structures of three players with market share of 60-30-10.

Your assertion almost reminded me of Hume's is-ought problem, but maybe we should call this instead call this the is-will be problem (yes, my wife is also asking if I smoked something). And that is jumping from what a new industry currently is to the structure of an industry in the future. Let's remember that there advantages from the innovator in any new industry. Netscape was a monopoly in its early beginnings, only to be displaced for another monopoly, and now we are seeing a rebirth of all types of browsers (Safari, Chrome, Firefox).

From the point of costs, the infrastructure for search is becoming commoditized so I do not thing that there are great benefits from scale, and usually scale only has given oligopolistic benefits (60-30-10). For Google to become a real monopoly, there must be network benefits and, from the point of consumers, it is not like as if search has become so much better with Google getting larger. And from the point of advertisers, pay per click does not stop them from using several search services at the same time. My understanding is that for the moment, Google can still extract more per click thanks to good placement of the text advertising, but the advantages of good search are diminishing and there is a good chance that it will get commoditized.

I do not see Google search as a platform, that is they way that usually leads to monopolies

Also, text based marketing is not so good for creating and protecting brands. With the increase of bandwidth, short video snippets has become more important. That is not so much different from television in the 50s and 60s that was an ologopolistic industry in most countries.

So, what is your thesis to say that search is a monopolistic industry? To jump from what is to what it will be o a relatively new industry is a least for me a big jump .
Title: Re: GOOGL - Google
Post by: JAllen on June 21, 2011, 09:23:15 AM
Quote
I do not see Google search as a platform, that is they way that usually leads to monopolies

Isn't Google search a platform in the sense that it got many people to use other Google products(or at least made it much easier for Google to get more users for new products)?  I now use gmail, docs, calendar, iGoogle, groups, finance, and many more.  So this is in a sense, at least in my eyes, a network effect working in Google's favor.
Title: Re: GOOGL - Google
Post by: valueInv on June 21, 2011, 10:39:01 AM
"Google has a huge new moat," Munger said. "In fact I've probably never seen such a wide moat."

Google's main business of charging companies when people click on their ads after running an Internet search is "incredible," the Berkshire chairman said.

"I don't know how to take it away from them," he added.

"Their moat is filled with sharks," Munger said.
________________________________________
___________________

The new frontier of internet search is about to begin. The transition of powerful computing is shifting from the device to the servers in the cloud data centers, like what DELL is doing. And eventually all the data centers will be connected to allow the end users device to do voice and visual searches.

If the moat of Google can be taken away from them, it will likely be not with a click of a finger or mouse, but using voice like Microsoft's  Skype combined with something like the newly formed partnership with Comcast's video business, for searches.

The merging of voice, video and data over the internet will allow innovation to bring forth advanced ways to search, and if Google isn't ahead of it's game Microsoft can take the lead.

Warren just needs to ask Bill about that one.  ;)

I question how wide their moat is:

http://news.cnet.com/8301-10805_3-20072914-75/bing-grabs-market-share-from-google-over-past-year/

Then again, the numbers could be wrong.

There are a few questions to invert on:
- What if Apple changes the default search engine to Bing on all its devices? Does that help Bing get enough critical mass to put pressure on Google's pricing?
- What is Google's moat in advertising (Vs display ads, social ads, couponing, etc)?

 
Title: Re: GOOGL - Google
Post by: ValueSlant on June 21, 2011, 09:06:40 PM
Quote
I do not see Google search as a platform, that is they way that usually leads to monopolies

Isn't Google search a platform in the sense that it got many people to use other Google products(or at least made it much easier for Google to get more users for new products)?  I now use gmail, docs, calendar, iGoogle, groups, finance, and many more.  So this is in a sense, at least in my eyes, a network effect working in Google's favor.

It seems to me this is the point that Google is really trying to leverage to build a moat around search. They are trying to get the consumer to the point where they are already locked into so much Google-ness (for lack of a better term) with the Google search bar sitting on top so that as long as Google can at least keep up in terms of search quality then they will be able to maintain market share. It seems like Android is also a big step in this direction.

This article by Bill Gurley on Android sums it up well-
http://abovethecrowd.com/2011/03/24/freight-train-that-is-android/

ValueSlant
Value Investing Analysis / valueslant.com (http://valueslant.com)


Title: Re: GOOGL - Google
Post by: PlanMaestro on June 21, 2011, 10:27:09 PM
It seems to me this is the point that Google is really trying to leverage to build a moat around search. They are trying to get the consumer to the point where they are already locked into so much Google-ness (for lack of a better term) with the Google search bar sitting on top so that as long as Google can at least keep up in terms of search quality then they will be able to maintain market share. It seems like Android is also a big step in this direction.

I would disagree that this is a network effect. It is more about branding and generating income through adwords. And even if there were network effects that is not enough to get a platform with a monopolistic position.

I think this Cusumano presentation is good in that regard. Check slides 16 and 20, but it includes several other examples:
http://www.scribd.com/doc/49178058/Cusumano-Network-Effect
Title: Re: GOOGL - Google
Post by: ValueSlant on June 21, 2011, 10:52:32 PM
It seems to me this is the point that Google is really trying to leverage to build a moat around search. They are trying to get the consumer to the point where they are already locked into so much Google-ness (for lack of a better term) with the Google search bar sitting on top so that as long as Google can at least keep up in terms of search quality then they will be able to maintain market share. It seems like Android is also a big step in this direction.

I would disagree that this is a network effect. It is more about branding and generating income through adwords. And even if there were network effects that is not enough to get a platform with a monopolistic position.

I think this Cusumano presentation is good in that regard. Check slides 16 and 20, but it includes several other examples:
http://www.scribd.com/doc/49178058/Cusumano-Network-Effect

Thanks for the slides, nice presentation.

You can certainly look at it is as just branding, but maybe at some point it does become a weak form network effect. I think Google might be trying to get it to the point where all of the Google apps or services become a platform in a sense. If I am using Google for so many things from docs to gmail to pics (and maybe even the OS as well with Android) then odds are strong I will use the search integrated with all of that. But you could always open up your browser and go to Bing so this wouldn't be the strongest network effect. Either way whether we call it branding or weak network effect I could see where having google search integrated into that extensive platform would be a pretty good way to keep people in the fold.

You are right though I don't see how this gets them to anything like a monopoly. But I do think it will give them a nice moat around the current market share they have.

ValueSlant
Value Investing Analysis / valueslant.com (http://valueslant.com)
Title: Re: GOOGL - Google
Post by: Liberty on June 22, 2011, 08:53:07 AM
Here's a few reasons why I think competing with Google is incredibly hard:

First, I start with the assumption that to effectively compete, you need to offer at least feature-parity, if not a better product.

So right from the start, if you ever hope to offer something similar to Google you need millions of servers in large data centers all around the world. Within the industry Google is known for having some of the lowest, if not the very lowest, costs of computing ($/FLOPS). And Google is making its offering more computing-intensive all the time, so that increases barriers to entry (Google Instant means that every search is actually multiple searches, not just one, and once you get used to instant - especially on mobile where every keystroke can be painful - other search engines feel slow. Google Search by Image and Google Goggles allow to send a picture to Google and it'll find similar pictures, translate text in the pic, tell you where the pic was taken if it can figure it out.. You can also search by voice both from mobile and desktop. Both these things are extremely computing-intensive. Search results contain geo info from maps, youtube videos, news items, real-time twitter stuff, applications like translation between 2000+ language pairs, financial graphs and realtime quotes, math unit conversions, etc. Also, if you are logged in they personalize your search by giving you results that they think will be more relevant to you based on previous searches and other account info.. That's also very hard to do. They also re-index websites very often - stuff I publish on a site with a pagerank of 8 is indexed within seconds.)

So very few companies can afford this, and no company of the right scale is 100% focused on search & advertising. Good startups will be acquired, probably by Google, who's the buyer of choice to most entrepreneurs in that space and has a good track record for acquisitions. I don't expect that what Google did to Altavista/Excite/Lycos/Yahoo will be done to Google, in the same way that what Microsoft did to IBM probably won't be done to Microsoft... These were one-time events in immature industries.

But the low-cost hardware is just the start. You need thousands and thousands of incredibly smart people, and there Google has the benefit of being mostly focused on search while to most other companies it's a side thing (maybe an important side thing, but not where 90%+ of resources go). Google has had great success attracting genius engineers, and even now that there's more competition for hiring, they're still probably a dream job - along with Facebook and Apple - for most of the technical people who don't want to do a startup. Part of the success there comes from being a company that is run by engineers for engineers, with 20% of the time spent on personal projects, free gourmet food (so you can spend all evening coding), contributing a lot to the open source community (where most programmers hang out and spend their formative years, predisposing many to like Google and want to work there), hosting Tech Talks and just having a great geek-culture, etc.

And then, even if you have all this, you still need to monetize it. Google Adsense/Adword has relationships with millions of advertisers/publishers. Advertisers are more likely to buy from Google because they know almost everybody uses it, so they'll reach their target audience, and publishers put adsense on their site because they know Google has the biggest inventory, so it's more likely that relevant ads will be available, leading to higher clickthroughs and CPC rates. Adsense itself is another technical barrier to entry: Every page of every web site with google ads needs to be analysed by Google (requiring lots of computational power and bandwidth to crawl it all) so that the most relevant ads can be served. Even small improvements in the targeting there can lead to big increases in CTR and CPC, so Google is very focused on squeezing the most out of this. And the recent acquisition of DoubleClick (banner ads) increases their reach to many more sites and types of advertisers (more "branding" buys)... I also feel that because Google sells ads using an auction mechanism, with different prices for each keywords, changing day-by-day, that their pricing power is actually easier to use than other businesses where prices are more stable and increases are easier to spot.

I could go on like this or a while, but I'll add just one more thing: Mobile. It's growing like crazy and about 400k Android devices are being activated every single day, and they have a Google search field on the home screen. On top of that, there are also many many Apple devices being activated, and while Apple hates Google right now and might tend to favor Microsoft (who they don't exactly love either), it's very very likely that a majority of Apple users use Google as their main search, and there's probably a correlation between the number of searches you do in a day and the likelihood that you use Google (in my experience, Google wins the power-user market hands down). Even with more casual users, Google has great brand and mindshare (definitely one of the most valuable brands in the world). If I gave a smartphone (Android, iPhone, RIM, even Windows) to my father, or to almost anyone I know, they wouldn't ask: "Where's the search engine on this? I don't care what it is...". They'd ask: "How do I Google something on this?". That's very powerful, and it's not exactly like Apple or RIM or anyone can block Google or make it hard to use it on their device, not without pissing off many users and making them feel manipulated. (and I'll add quickly that Google has tons of very valuable geo-data that they've been gathering for years for Google Maps, Google StreetView, and Google Earth that will be very valuable on mobile).

I could also talk about why I think Chrome is brilliant, or the Cloud strategy, or GMail (people tend to spend all day in their email, and having TWO different ways to do Google searches at the top of the screen has great value), etc, but you get the idea...

The way I look at Google, they are the best narrow artificial intelligence company in the world (as opposed to 'general artificial intelligence'), and their main weapons are their brains and the niches they picked (search and advertising). Like a good insurance company, they're turning smarts into cash.
Title: Re: GOOGL - Google
Post by: biaggio on June 22, 2011, 02:53:26 PM
Thank you all, good posts.

I am getting intersted.

Seems to be a great business at a fair price...(i.e. not cheap?)

What do others think?
Title: Re: GOOGL - Google
Post by: DCG on June 22, 2011, 03:17:55 PM
Thank you all, good posts.

I am getting intersted.

Seems to be a great business at a fair price...(i.e. not cheap?)

What do others think?

I've owned GOOG for a few years and added to my position earlier this week.
Title: Re: GOOGL - Google
Post by: Liberty on June 23, 2011, 07:26:06 AM
Got some more GOOG today. Actually sold out of another of my positions because I liked this one better..

Update: some stuff about Google's Ad Exchange (which I forgot to mention in my other post above -- it will turn into a nice profit generator, IMO): http://blogs.wsj.com/digits/2011/06/23/google-display-chief-makes-pitch-to-publishers/
Title: Re: GOOGL - Google
Post by: beerbaron on June 23, 2011, 07:59:44 PM
When are Anti-Thrust issues going to be raised with Google?

BeerBaron
Title: Re: GOOGL - Google
Post by: JAllen on June 23, 2011, 09:19:34 PM
When are Anti-Thrust issues going to be raised with Google?

BeerBaron

http://www.bloomberg.com/news/2011-06-22/google-faces-senate-subpoena-threats-to-get-testimony-from-page-schmidt.html
Title: Re: GOOGL - Google
Post by: ValueSlant on June 23, 2011, 09:40:04 PM
When are Anti-Thrust issues going to be raised with Google?

BeerBaron

http://www.bloomberg.com/news/2011-06-22/google-faces-senate-subpoena-threats-to-get-testimony-from-page-schmidt.html

http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html?mod=WSJ_newsreel_technology#project%3DGOOGLE110624%26articleTabs%3Darticle (http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html?mod=WSJ_newsreel_technology#project%3DGOOGLE110624%26articleTabs%3Darticle)

This looks like the big one. At first glance the issues raised don't seem to be the type that would put their entire business at risk. But I guess once the investigation is opened up it could lead to other issues as well as just be an overhang on the company/stock for quite a while as these things tend to drag on. On the other hand, could be a great buying opportunity if the stock continues to get hit.

ValueSlant
Value Investing Analysis / valueslant.com (http://valueslant.com)
Title: Re: GOOGL - Google
Post by: Liberty on June 24, 2011, 11:56:45 PM
I've been watching, reading, and listening to a lot of stuff about Google lately (conference calls, conferences, speeches, interviews, etc) and found this part where Dr. Eric Schmidt talks about him and Larry & Sergey going to visit Warren Buffett to get his insights about company culture. Nothing we don't already know, but interesting to me nonetheless that they identified Buffett as a "very smart" person that they should go ask advice to:

http://youtu.be/8g1sgb-dGpI?t=11m35s
Title: Re: GOOGL - Google
Post by: tombgrt on June 25, 2011, 04:11:40 AM
Some questions for whoever can answer them. I believe they could be key in valuing earnings here but I know very little about GOOG.

- Will pricing and profits margins in the ads business remain sustainable enough for Google in the future?
Do casual and heavy internet users even ever click those things? I know I don't. Or will innovation save the day and keep interest of the common internet users high enough?

- What would happen with profits from the ads business if Bing would become a dominant second player with 20-35% market share and starts a price war? Does Google have any pricing power?


I am reading the thread now so sorry if it came up already.
Title: Re: GOOGL - Google
Post by: VAL9000 on June 25, 2011, 08:39:51 AM
Hi Tom,

Here are my thoughts on these questions.

- Will pricing and profits margins in the ads business remain sustainable enough for Google in the future?
Do casual and heavy internet users even ever click those things? I know I don't. Or will innovation save the day and keep interest of the common internet users high enough?
You need to split up the ads business in order to answer these questions fairly.  AdWords is the crown jewel at Google.  These are the ads that run next to search results.  My opinion is that these ads will continue to be extremely high margin for the foreseeable future.  My simple reasoning is that online ad spend growth is outstripping search growth.  More dollars per search query are entering into the ecosystem.  AdWords is an extremely effective form of advertising because users who are searching are signalling that they have a need.  AdWords will continue to command a disproportionately large share of online ad spend until a better use of ad dollars is invented.

Google's other ad businesses are more commoditized in their economics.  They're still good businesses that are better because they can be sold along with AdWords.  I don't know what to make of these long term.  Google has started to offer search history / clickstream parameters to their ad buying tool kit.  This could really improve all aspects of the advertising businesses, but we'll have to see if they roll it out across the platform.  This could get a bit creepy, but as an internet user I would prefer that I see highly targeted ads over poorly targeted ads.

To answer your second question, of course people click on ads otherwise Google's business wouldn't exist.

- What would happen with profits from the ads business if Bing would become a dominant second player with 20-35% market share and starts a price war? Does Google have any pricing power?

Through its partnership with Yahoo, Bing already commands about 30% of the market in terms of search volume.  They aren't doing a good job on the ads business side, but I think that will change.  If you assume that a click on Bing is worth the same as a click on Google, then there is room for the no arbitrage principle to operate.  Keyword prices on Bing will rise relative to the prices on Google.  I don't really think they'll close though.  The number of advertisers competing on Google appears to be a greater factor than the price differential between the two services.  I'm not sure how to anchor this thought to a fact or argument, though.

Overall, I think that both Google and Bing have excellent market economics working in their favour.  That is, it should get better before it gets worse.
Title: Re: GOOGL - Google
Post by: Liberty on June 26, 2011, 11:07:03 AM

Video advertising will be the keyword - text will fall by the wayside like Morse code/buggy whip did.

I seriously doubt that. As good as video is for some things, it isn't as good as text for many other things.

Both types of content will exist side by side for the foreseeable future.
Title: Re: GOOGL - Google
Post by: DCG on June 26, 2011, 05:04:53 PM
You're looking at it wrong, in my opinion. Internet traffic of videos is separate from text. People search for videos though text. Videos are content. Just like how people search Google to find news articles. They search for videos containing content they're looking for.
Title: Re: GOOGL - Google
Post by: Liberty on June 26, 2011, 06:56:58 PM
Internet video is now 40 percent of consumer Internet traffic, and will reach 62 percent by the end of 2015, not including the amount of video exchanged through P2P file sharing. The sum of all forms of video (TV, video on demand [VoD], Internet, and P2P) will continue to be approximately 90 percent of global consumer traffic by 2015.  

If you're talking about bandwidth/terabytes/etc, sure, video will dominate. But that's a different metric from what I was talking about. A short Youtube video probably takes more disk space than most novels, but it doesn't mean that people will spend as much time on it as on a book...

People will keep consuming a lot of text because it's the most efficient and convenient way to do many things, and because it is much easier to produce than video (even if the camera, bandwidth, and editing software is free, it's much harder to make a video that is fun to watch than to write something that is worth reading).
Title: Re: GOOGL - Google
Post by: Liberty on June 27, 2011, 08:01:08 AM
Intelligent people such as yourself who have an inquiring mind, will always have a burning desire to know. So reading a book or ebook will appeal to them, however the marjory of the humans on this planet prefer to seek the meeting of the eyeballs not the mind.

Apparently someone spends a lot of time watching videos online. In my opinion, the best way to attract attention and retain it for an ad, is the use of interesting content targeted for the end user. People don't spend a lot of time reading text advertisement compared to video.

To have a brand stick in the memory of a mind, a picture or video is the method that best reinforces brand loyalty. Think about it, does Coke use a lot of text to advertise?


Video will grow for sure, and probably faster than text for a while until it matures more, but many things will remain - as I said - better with text.

Looking for which fridge to buy? You'll do a text or voice search, and peruse text pages to read up the specifications, prices, look at photos, reviews, etc. Will there be video reviews? Sure, there are now. But it's a complement to text.

Text is non-linear and easily scannable. You can stop paying attention and come back without pausing. You can read much faster than someone can read the text out loud to you, which is why scanning news in text format is so efficient compared to waiting for someone to read them to you in video format. The gazillion of bloggers and journalists out there won't all become expert video producers (though I'm sure some will). Video will always be harder to do right than text, and always be more expensive and time-consuming (if you do it right), and most people will probably remain too self-conscious to release public videos of themselves.

My point is not that video won't become a huge deal, because clearly it will (and GOOG is a leader in that). I'm just saying that text isn't going anywhere, because it has inherent advantages over video for many applications. But in some areas, there will be great synergy (text search for cars, click on ad and land on a page that has lots of video info, reviews, etc).
Title: Re: GOOGL - Google
Post by: valueInv on June 27, 2011, 08:55:30 AM
[

Internet video is now 40 percent of consumer Internet traffic, and will reach 62 percent by the end of 2015, not including the amount of video exchanged through P2P file sharing. The sum of all forms of video (TV, video on demand [VoD], Internet, and P2P) will continue to be approximately 90 percent of global consumer traffic by 2015.  

http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-481360_ns827_Networking_Solutions_White_Paper.html

Text will always be needed for fine details, but the predominate use of the eyeballs will be for video as the above statistics show. That doesn't leave much room for text at 10%.

Video is a branding medium, while search captures intent, video captures interest. Both are valuable, but in a very different way.

We’re still early in the development of the online video business, but we are starting to figure it out.

As the saying goes, a picture is worth a thousand words and a video is worth a million words!

The numbers you quote are video traffic volume by bytes. An average video standard definition video  on youtube is 10 times larger than an average web page i.e. for the same amount of bytes you can get 10 webpages or 1 video. A high quality video such as that shown on Hulu or Netflix is much, much larger.

So equating video traffic volume to eyeballs is a mistake. On the contrary, it is much more expensive to serve a video to a user when compared to serving a web page.Your costs are higher due to storage, processing and bandwidth needed. That's one of the reasons why youtube took a long time to be profitable. 
Title: Re: GOOGL - Google
Post by: biaggio on June 27, 2011, 01:28:52 PM
I prefer reading news and other information as it is faster then watching a video
Title: Re: GOOGL - Google
Post by: Liberty on June 27, 2011, 02:53:04 PM
I don't really trust analyst projections, but for what it's worth:

http://business.financialpost.com/2011/06/27/googles-mobile-business-to-grow-to-us14-billion-by-2015/

Quote
Canaccord expects the global mobile ad market to grow to US$28.6-billion in 2015, way up from this year’s projected US$5.3-billion.

Meanwhile, the global smartphone market is booming: handset sales totalled 297 million in 2010 and are projected to grow 49% this year to 442 million. Google’s Android is expected to represent 39% of the operating system market in 2011 and looks set to seize a larger share of that market going forward, Mr. Terry said.
Title: Re: GOOGL - Google
Post by: Liberty on June 28, 2011, 02:00:30 PM
GOOG unveiling some social stuff today:

http://googleblog.blogspot.com/2011/06/introducing-google-project-real-life.html

http://mashable.com/2011/06/28/google-plus/

WIRED has a huge article: http://www.wired.com/epicenter/2011/06/inside-google-plus-social/
Title: Re: GOOGL - Google
Post by: goldfinger on June 28, 2011, 02:37:33 PM
GOOG unveiling some social stuff today:

http://googleblog.blogspot.com/2011/06/introducing-google-project-real-life.html

http://mashable.com/2011/06/28/google-plus/

I am amazed by the amount of projects Google undertakes and develops in-house to fend off competition and "reinforce" its moat(s).
It seems they can do all of what their competitors do and more and all for free too!
Title: Re: GOOGL - Google
Post by: Liberty on June 28, 2011, 03:32:21 PM
I am amazed by the amount of projects Google undertakes and develops in-house to fend off competition and "reinforce" its moat(s).
It seems they can do all of what their competitors do and more and all for free too!

Indeed, they keep busy. But there's a popular misconception about Google, that they are scattered and spend a lot of resources on stuff that doesn't provide much revenue...

Most of their projects start out as the personal project of 1-5 engineers (or of a small startup that gets bought), and they build them because they think it's going to be cool and/or useful (a lot of bottom-up initiatives, from what I can tell). They release lots of it as beta, and when some of it gets traction they sometimes shift in higher gear and start putting resources into it (GMail was a side project of a developer for a while, for example).

But the vast majority of their resources are in search and ads, with a smaller amount into strategic platforms/products (Android, Chrome), and then a bunch of handfuls of people working on small projects (often in their 20% time). I think that social can now be included in strategic stuff, now that Larry is CEO and has created a 'social' org inside the company. We'll see how they do..
Title: Re: GOOGL - Google
Post by: Liberty on June 28, 2011, 03:59:24 PM
From the WIRED piece that I posted above:

Quote
The parts announced Tuesday represent only a portion of Google’s plans. In an approach the company refers to as “rolling thunder,” Google has been quietly pushing out pieces of its ambitious social strategy — there are well over 100 launches on its calendar. When some launches were greeted by yawns, the Emerald Sea team leaders weren’t ruffled at all — lack of drama is part of the plan. Google has consciously refrained from contextualizing those products into its overall strategy.
Title: Re: GOOGL - Google
Post by: Liberty on July 01, 2011, 07:36:50 AM
Looks like Chrome is going strong:

Quote
Google’s Chrome browser exceeded 20% of the global Internet browser market in June for the first time, according to StatCounter, the website analytics firm.

The research found that Chrome took 20.7% of the global market last month, which is up from a mere 2.8% in June 2009.  In the same period, Microsoft’s Internet Explorer (IE) has fallen from 59% to 44% globally, whilst Firefox dropped slightly from 30% to 28%.

Chrome is already ahead of Firefox in South America, and the browsers are neck-and-neck in the UK. These stats suggest that Chrome is well on its way towards usurping Firefox into second place in the browser market across the globe.

http://thenextweb.com/google/2011/07/01/google-chrome-has-20-market-share-firefox-in-its-sights/

That's excellent for their moat, it helps them set the pace of browser/web standards innovation, and it's good for the brand. I also bet Chrome users do more searches because it's so well integrated.
Title: Re: GOOGL - Google
Post by: Liberty on July 01, 2011, 09:58:17 AM
Zynga filing for IPO. Google had at least 100m invested in them.

http://techcrunch.com/2011/07/01/zynga-files-for-1-billion-ipo/
Title: Re: GOOGL - Google
Post by: Liberty on July 01, 2011, 10:37:04 AM
500k Android devices are now activated every day, and it's growing at 4.4% week over week, according to Google's Andy Rubin:

http://news.cnet.com/8301-13506_3-20074956-17/google-500000-android-devices-activated-each-day/

EDIT: also some reports that GOOG is in talks to buy Hulu:

http://www.google.com/hostednews/afp/article/ALeqM5hVPp0oCACt0N3YcsL8ZON_K2-yJg?docId=CNG.e740b6d0077ba8c28f6d1dd931c6f679.581

EDIT2: A couple years old, but nice interview form Charlie Rose with Marissa Mayer:

http://www.charlierose.com/view/interview/10129
Title: Re: GOOGL - Google
Post by: Liberty on July 05, 2011, 02:53:04 PM
Looks like Google will consolidate other brands into Google+:

http://mashable.com/2011/07/05/google-blogger-picasa-rebranding/

Title: Re: GOOGL - Google
Post by: moore_capital54 on July 05, 2011, 07:21:34 PM

Here are my thoughts on why I think Google has done it with Google+ and that Facebook will literally become irrelevant. I know this is a very bold statement and it is just my opinion but here is the logic behind my thinking:

Where does most traffic on the net originate? Google. Google is the foundation of the web. Facebook was trying to swallow the web into its own organic network, one where the user wants to share personal experiences with his personal connections. But this was really just an oversight on google's part, that facebook was able to get to this point.

The second google added the +1 widget to every search result, everything changes. Facebook, no matter how big it gets will never have a "Like" widget next to search results. Most internet activity originates on google. Now, when you like a link.. Whats easier? To +1 the result right there, immediately sharing it with all your personal connections? or cutting and pasting a link into facebook or twitter. The addition of the +1 widget is game changing as this is the key to viral expansion and will feed the google+ network.

Next, what is the most preferable email service on the web? Gmail, by a long margin. Now what makes more sense? To "Message" my personal connections through Facebook? or to have one account where I can receive all my private communications.

Circles achieves two things, one it makes twitter irrelevant, as I can now have followers who I broadcast to and can broadcast more than 140 characters, more importantly, I can segregate my personal connections but again most likely facebook will copy this, so this is not going to be a moat that will last.

The key is to understand  the internet flows like a river, a high pressure river, and almost all traffic originates from google. Next year when we all search for something on google, chances are we will see results recommended by some of our personal connections. This will transform the search process as we know it and make the experience a lot more dynamic.Google also tackles linked in as obviously google+ profile results for your name will rank higher on google than LinkedIn or Facebook, again think of the amount of traffic flowing, over time this is a huge advantage. Google does not need ads on its social networks, Facebook does. I am willing to bet that google+ will not have ads for years, the goal is to keep everything flowing within the google network. Why someone needs an external network like facebook is beyond me unless facebook carves out a niche like myspace did, but as you can imagine the economics won't be there.

Again the moment Google decided to even enter this in a big way, I believe all social networks are destined for failure. I hope to see google use its incredible cash hoard to attack on all fronts, I am rooting for them as I don't believe in any of the recently IPO'd tech cos and hated to see the misallocation of capital in equity markets.

This includes: OPEN,LNKD,QIHU,YOKU,CYOU,YNDX - Zynga/Groupon/Facebook/Twitter. These are not businesses, they are novel services.



Title: Re: GOOGL - Google
Post by: Liberty on July 05, 2011, 07:33:55 PM
Interesting prediction.

One thing that I would add is that Google+ will pick up tons of users because of how you can receive content even if you don't have an account. You simply get a email from your friend with a G+ post, and you can click and see it on the site, see their profile, etc, and there's also a link to create an account.

Lots of people will just keep reading the emails, but tons of people will create accounts.

It's kind of like Google had a chance to look at Facebook, Twitter, Myspace, etc, and learn from their mistakes and successes and try to do something that improved on them all. And they haven't even officially launched yet, there are yet more features to be announced (as per the WIRED article..).

We'll have to wait and see, but it certainly seems like a quality effort, and they've said that if some things don't work, they'll just fix them and keep at it until they get it right. They won't drop it like Wave or Buzz (from which they've learned a lot).
Title: Re: GOOGL - Google
Post by: roundball100 on July 05, 2011, 07:38:39 PM

Here are my thoughts on why I think Google has done it with Google+ and that Facebook will literally become irrelevant
[...]
Facebook, no matter how big it gets will never have a "Like" widget next to search results. Most internet activity originates on google.
[...]

To play devil's advocate: what stop's Facebook from teaming with investor Microsoft and putting a "Like" widget next to Bing results?
Title: Re: GOOGL - Google
Post by: moore_capital54 on July 05, 2011, 08:01:39 PM
Roundball Facebook has more traffic than Bing, that would make no difference, Microsoft can rename Bing "Facebook"  and it still wouldn't matter. The key is to understand that in internet world for the first time, these novel services are going to have to fight for the traffic that has been free from google. Without google none of them would exist.

Google could offer all its partner sites revenue sharing agreements to put +1 widgets and comment boxes instead of facebook/twitter/inshare that will really be the nail in the coffin.

Title: Re: GOOGL - Google
Post by: hyten1 on July 05, 2011, 08:22:03 PM

moore_capital54

i think you have quite a deal of bias towards google

the way you have described it i get google is end all be all, it'll dominate everything.

hy

Title: Re: GOOGL - Google
Post by: Liberty on July 05, 2011, 08:51:21 PM
It's still in semi-private beta and Google+ is already a top 10 source of Traffic for Techcrunch, a VERY popular site (and they're not using it yet to share links and promote things):

http://techcrunch.com/2011/07/05/google-plus-sharing/

Quote
the way you have described it i get google is end all be all, it'll dominate everything.

Not everything, but it dominates search and ads, and it has a shot at doing very well in social (though we'll only know for sure in a few years). Facebook's problem is that while everybody uses it, few people actually love - or even like - the company, and so it doesn't have the kind of loyalty that brands like BMW and Coke have. In some surveys Facebook rate around the IRS and AT&T, while Google on the other hand has a great brand. That helps, because average users care about being associated with a great brand (Myspace totally lost its brand through neglect, but Apple's still got it and cherishes it).

Update: Google flight search tool coming.. they've really gone into overdrive lately:

Quote
Google will launch its long-awaited flight search tool in a few weeks, according to a report by TechCrunch.

That means Google’s legal nightmare over its $700 million acquisition of ITA might finally be at an end. The whole hullabaloo started when the U.S. Department of Justice initiated an antitrust investigation, shortly after Google announced its plans to acquire ITA in July, 2010.  At the time it announced the deal, Google stated that it wanted to “build new flight search tools” using ITA’s data while continuing to serve ITA’s existing customers.

http://venturebeat.com/2011/07/05/google-flight-search-engine/
Title: Re: GOOGL - Google
Post by: moore_capital54 on July 05, 2011, 09:09:43 PM
Hy you are 100% right, I am biased. The reason I am biased with Google is because as an investor I can participate if my predictions are right.

After subtracting cash, google is currently trading at about 15x forward net income. Compare that to Facebook/Linked In or even Twitter which is now raising capital at an $8B valuation. If I can get all this potential growth for free, of course I am excited.

I don't know if google will dominate everything on the web, I don't think they need to. Social is an area where they need to.
Title: Re: GOOGL - Google
Post by: goldfinger on July 05, 2011, 09:53:21 PM
Hy you are 100% right, I am biased. The reason I am biased with Google is because as an investor I can participate if my predictions are right.

After subtracting cash, google is currently trading at about 15x forward net income. Compare that to Facebook/Linked In or even Twitter which is now raising capital at an $8B valuation. If I can get all this potential growth for free, of course I am excited.

I don't know if google will dominate everything on the web, I don't think they need to. Social is an area where they need to.

I can feel your excitement and that's cool. I just think that there are and there will be multiple companies competing for each of the main segments of internet business like any other area. Even in search it is what seems to be happening more and more at the moment.
Title: Re: GOOGL - Google
Post by: S2S on July 05, 2011, 10:01:45 PM
Again the moment Google decided to even enter this in a big way, I believe all social networks are destined for failure. I hope to see google use its incredible cash hoard to attack on all fronts, I am rooting for them as I don't believe in any of the recently IPO'd tech cos and hated to see the misallocation of capital in equity markets.

This includes: OPEN,LNKD,QIHU,YOKU,CYOU,YNDX - Zynga/Groupon/Facebook/Twitter. These are not businesses, they are novel services.

The problem is that you quickly run into limits with regards to the number of sets of friends people are willing to/can reasonably maintain.. on Yelp, Twitter, FourSquare, Facebook, etc. etc.. Hence Facebook's first mover advantage as the overarching social network means something.

Having used Google+ for a couple of days (thank you for trying to help, btw), I reckon it has been fun because it is new; but at the end of the day, I doubt I could afford the time to be active on anything other than the big three (FB, Twitter and G+), if that.

Reid Hoffman once said "Social networks do best when they tap into one of the seven deadly sins. Facebook is ego. Zynga is sloth. LinkedIn is greed.” What is Google+?

What's more, a large (and growing) percentage of Internet users are in Asia where neither Google or Facebook commands a dominant position. Perhaps other players (Bing/Baidu?) are in better positions to integrate search into social networks.

Disclosure: long GOOG. I just happen to hate viewing things in rose colored glasses.
Title: Re: GOOGL - Google
Post by: JSArbitrage on July 06, 2011, 06:42:03 AM
Next, what is the most preferable email service on the web? Gmail, by a long margin.

Actually, it's Yahoo, followed by Hotmail, then Gmail. 

http://www.winrumors.com/hotmail-94-bigger-than-gmail-according-to-latest-u-s-stats/
Title: Re: GOOGL - Google
Post by: Liberty on July 06, 2011, 06:52:16 AM
Next, what is the most preferable email service on the web? Gmail, by a long margin.

Actually, it's Yahoo, followed by Hotmail, then Gmail.  

http://www.winrumors.com/hotmail-94-bigger-than-gmail-according-to-latest-u-s-stats/

Depends what you mean be "preferrable", and it depends if those statistics are reliable (third party traffic stats usually aren't.. the kind of people who install a tracking toolbar usually are the most clueless of web users, and they often seem to just make stuff up and be way off -  I've been involved with a site getting tens of millions of pageviews a month and I've learned long ago not to trust these third party statistics).
Title: Re: GOOGL - Google
Post by: moore_capital54 on July 06, 2011, 10:10:59 AM
By preferable I meant just that. Most would agree that gmail is superior to hotmail and ymail.
Title: Re: GOOGL - Google
Post by: Liberty on July 07, 2011, 08:07:31 AM
Looks like even Apple is having trouble with Google's ad moat:

Quote
Apple Inc. (AAPL)’s iAd mobile-advertising business has cut rates by as much as 70 percent as some marquee clients are using rival services, two people with knowledge of the matter said, signaling the company is struggling to parlay its technology leadership into success in the ad industry.

When Apple rolled out iAd a year ago, companies such as Citigroup Inc. (C) and J.C. Penney Co. were being charged $1 million or more to run ad campaigns. Today those brands aren’t using iAd, and Apple is offering packages for as little as $300,000, said the people, who asked not to be named because the rates are private.

Even with lower prices, some advertising agencies are balking at iAd’s cost, especially because the promotions only reach Apple users. They’re turning instead to Google Inc. (GOOG)’s AdMob, Millennial Media and Greystripe, which serve a range of devices. That means Apple risks losing ground in a market that will generate $2.5 billion by 2014, according to EMarketer Inc.

http://www.bloomberg.com/news/2011-07-07/apple-s-iad-mobile-ad-service-said-to-cut-prices-as-clients-turn-to-rivals.html
Title: Re: GOOGL - Google
Post by: Liberty on July 08, 2011, 08:27:45 AM
[this is cross-posted from the MSFT thread (http://cornerofberkshireandfairfax.ca/forum/index.php?topic=2446.525). I thought it fit better here]

All right, after a (too short) night of sleep, here's the outline of how I see this for GOOG:

How does Google prefer to make money? Where have they the highest margins and biggest moat?

-Search ads are extremely profitable because

1) They are targeted. You know the intention of the user because they just searched for "stainless steel fridge" so if you show them ads for stainless fridges, you'll get a lot more value than if you show fridge ads on facebook where people's intention is mostly to check up on their friends. That's why some keywords are worth many dollars per click while less targeted ads are often worth fractions of pennies.

2) Ads shown on the Adsense and Doubleclick networks are also profitable, but google has to share money raised in the auction with the publishers. Ads on Google's own sites don't share any of the money. Another reason search is preferable for them.

-So how does Android fit into all this?

1) In 2007 when the Google guys saw the iPhone and realized that in the future a lot more of the web was going to be consumed on mobile devices, and that they had to make sure their products were well positioned for that and that those who controlled that mobile platform couldn't harm them, they could have said: "all right, we're going into the phone business and we'll compete directly with Apple" and maybe a year later they could have had a phone like the Nexus One. They could have tried to make money from the hardware and the apps, but the problem would've been:

2) They're a software company. They don't have tons of industrial designers, they don't have a large distribution network and retail outlets, they don't have supplier relationships, etc. So they could have tried to turn the ship around and become a whole other kind of company to compete with Apple, but the problem is, chances of success would be low and if they became a phone maker, and they wouldn't just be competing with Apple, they'd also be competing against RIM, Samsung, Motorola, HTC, etc.

3) Maybe they could have licensed their OS to some of these companies, but when you want to make money from the hardware, you don't want to give your secret sauce to everybody. That's why Apple will never license iOS. But maybe GOOG could have skipped the phone and just tried to license a phone OS. Maybe that could have worked, though phone makers up to that point hadn't shown too much interest in licensing other people's OSes. And if you sell it to them, you can't price it too high or they'll go in-house, and you always have to worry that someone else will try to undercut you with a cheaper OS (windows for phones, etc) and that your phonemakers will jump ship, etc.

4) I think Google looked at that kind of business and they decided they'd rather go for maximum scale instead. When you give a quality OS for free, you know you'll get the maximum number of partners possible because you can't be undercut on price and they won't feel you are competing with them, they're partners and if they do well, you do well. I'm sure Google decided that what was most valuable was to have hundreds of millions of devices with a button on the front that took you to search and/or a prominent search bar on the home screen. The only thing more valuable than a search ad is a geo-targeted search ad... and this way they have a lot of influence over how the mobile platform develops and what users expect from phones. Otherwise we might have gotten phones that go "oops, sorry, Microsoft paid us so this phone can only search the web with Bing!" or "sorry, web apps don't work on this phone, only paid downloaded apps work" or whatever BS like that. And trust me, more of that stuff would be plausible if Google was a phonemakers and other phonemakers felt directly in competition with them.

5) So I say without hesitation that Apple is the king of smartphones and tablets. But Android is a solid #2 that might not have happened if Google had taken another strategy, and while I think Apple is a better business right now, I agree with Buffett and Munger that Google has a great moat, and I think that their 'infrastructure' play is stable over the long term. Apple is kind of on a product treadmill, and they need to keep producing great products that people want (they also have some nice infrastructure stuff like iTunes and the App Store, but it's a much smaller part of their business). Meanwhile, Google benefits (via search, adsense or display ads) from every Android, iPhone, RIM, Nokia, Windows phone, iPad, etc...

So I wouldn't have any problems investing in AAPL, and I think those here who invested in MSFT probably will also do well over the long term, but GOOG at $482 fit my personal criteria better, so I got in.

Update: I also forgot to mention that if Google hadn't made Android free, chances are they couldn't have used the Linux foundation because of the GPL license (though I'm not 100% sure, maybe there's a workaround), so it would have been a lot more work to build the OS from scratch rather than on top of an existing foundation.
Title: Re: GOOGL - Google
Post by: VAL9000 on July 08, 2011, 02:23:49 PM
This is troubling for the whole free thing:

http://www.networkworld.com/news/2011/070711-oracle-win-would-strain-android.html

Quote
Oracle is reportedly already asking handset makers to pay as much as $20 per Android phone

That's a high-ball number, but $20-30 per device is realistic when you include MSFT's licensing agreements.

Google's model, as Liberty outlined, shouldn't be impacted by this all that much.  What Google will need to do is ensure that their future applications (such as Google Wallet) can run on any mobile OS, and not just Android.
Title: Re: GOOGL - Google
Post by: Liberty on July 08, 2011, 02:30:07 PM
Oracle is indeed a bit scary, because as a company they are like 85% legal department, 15% engineering... (there's a good joke about that here: http://goo.gl/FbZTV )

(For those not familiar with this, see what I posted previously about patent trolling:

http://blogs.forbes.com/timothylee/2011/07/07/microsofts-android-shakedown/

And some discussion of the article at a site full of programmers (it's where I found the link):

http://news.ycombinator.com/item?id=2738628 )

We'll see how it plays out. Google and the handset makers aren't exactly penniless startups, so they should be able to mount a pretty good legal defense.
Title: Re: GOOGL - Google
Post by: Liberty on July 08, 2011, 03:53:06 PM
http://dealbook.nytimes.com/2011/07/08/googles-deal-making-math/?hp

Eric Schmidt on Google's acquisition strategy.
Title: Re: GOOGL - Google
Post by: Liberty on July 09, 2011, 10:10:51 PM
Another reason why I'm not too worried about Bing and Yahoo (Bingoo?) is that I have access to very detailed stats from a site that has received about 500 million pageviews in the past few years. This is a site that has pretty mainstream content for mainstream users, nothing specific about the content should favor one search engine over the other. Its readers should be a representative cross-section of the english-reading internet public (which actually should favor Bing because they are more US-centric than Google so far, afaik).

Looking at the stats for about the past year and a half, that site is getting about as much traffic from Google Australia as from Yahoo Search, and Google UK and Google Canada are both ahead of Bing as referrers. Google.com is 12.5 times bigger than Bing, but that's just the .com, that doesn't count the 50+ other country-specific Google sites... If you put all the Google sites together, it totally dwarfs Bing and everything else. I also have access to stats from other very popular sites (millions and millions of pageviews per month) and on some of them both Bing and Yahoo do better than on that first site, but never that great.

That's partly why I'm skeptical when I see the market research companies putting Google at 65% or whatever. What matters to sell search ads is having users that actually search for something. I feel like the market research firms probably overcount people making typos in the address bar of IE and getting taken to Bing or users that type things like "facebook" in a search engine every day because bookmarks and URLs are over their heads, or maybe they have some other form of sample bias (for example, the use of tracking toolbars poses various problems...). That's why I like to look directly at actual stats from popular sites, because it shows what people who actually were looking for something and got somewhere used.

So don't take this as gospel, and I realize my sample size isn't huge and could be biased, but I like having those data points.

Fun trivia: On the site I'm looking at, Google Mauritius drives more traffic than Altavista (they still exist!)... and Google Malaysia drives slightly more traffic than AOL search.

Update: http://www.washingtonpost.com/business/economy/antitrust-officials-probing-sale-of-patents-to-googles-rivals/2011/07/08/gIQANSlZ4H_story.html
Title: Re: GOOGL - Google
Post by: S2S on July 10, 2011, 08:10:46 AM
How Google lost the the Nortel patent purse - TechCrunch's analysis (side comment: as a Bond fan, I enjoy the various references, including the url)
http://techcrunch.com/2011/07/09/vesper/ (http://techcrunch.com/2011/07/09/vesper/)

The Canadian court paper:
http://documentcentre.eycan.com/eycm_library/Project%20Copperhead/English/Monitor's%20Reports/Seventy-FirstReportoftheMonitor.pdf (http://documentcentre.eycan.com/eycm_library/Project%20Copperhead/English/Monitor's%20Reports/Seventy-FirstReportoftheMonitor.pdf)

Google's amusing (if backfiring) bidding tactic:
http://techcrunch.com/2011/07/02/3-point-14159265/ (http://techcrunch.com/2011/07/02/3-point-14159265/)
Quote
following their initial “stalking horse” bid to get the ball rolling, Google put forth bids of $1,902,160,540, $2,614,972,128 — and $3.14159 billion. If those numbers look familiar, it’s because you’re a nerd. Brun’s constant, Meissel-Mertens constant, and yes, Pi. That’s how Google was bidding on perhaps the most important auction they’ve ever been involved in.

Not surprisingly, those on the other end of the auction had no clue what Google was doing. And found their behavior erratic and odd.
Title: Re: GOOGL - Google
Post by: Liberty on July 10, 2011, 08:59:07 AM
Google's amusing (if backfiring) bidding tactic:
http://techcrunch.com/2011/07/02/3-point-14159265/ (http://techcrunch.com/2011/07/02/3-point-14159265/)
Quote
following their initial “stalking horse” bid to get the ball rolling, Google put forth bids of $1,902,160,540, $2,614,972,128 — and $3.14159 billion. If those numbers look familiar, it’s because you’re a nerd. Brun’s constant, Meissel-Mertens constant, and yes, Pi. That’s how Google was bidding on perhaps the most important auction they’ve ever been involved in.

Not surprisingly, those on the other end of the auction had no clue what Google was doing. And found their behavior erratic and odd.

They did the same thing at their IPO and at least one more time (and I think they probably just do it for fun, but it's great for keeping the brand appealing to engineers, showing that even at the highest levels they have technical people with a sense of humor and they're not just another boring old bureaucratic business).

I don't think it backfired, they lost because the others got together and bid more, not because they had round numbers.
Title: Re: GOOGL - Google
Post by: Liberty on July 11, 2011, 12:14:17 PM
Looks like the big damage numbers that Oracle is asking for are resting on pretty shaky legal foundations and might not hold for very long:

http://www.pcworld.com/article/235076/google_disputes_damages_estimate_in_oracle_case.html
Title: Re: GOOGL - Google
Post by: moore_capital54 on July 12, 2011, 11:17:13 AM
GOOGLE+ PASSES 10M USERS!

https://plus.google.com/117388252776312694644/posts/bGJPTALDkDe

This is going to be great, as I previously said, Google is where web traffic originates. I bet they surpass Facebook in less than 3 years.

Title: Re: GOOGL - Google
Post by: Liberty on July 12, 2011, 11:57:49 AM
GOOGLE+ PASSES 10M USERS!

https://plus.google.com/117388252776312694644/posts/bGJPTALDkDe

This is going to be great, as I previously said, Google is where web traffic originates. I bet they surpass Facebook in less than 3 years.

This is a non-official estimate, though a pretty sophisticated one. Regardless of how many users they have exactly, it seems to be growing fast despite it being just a field-trial.

What impresses me more (I have a Google+ account) is the engagement. Lots of great content, lots and lots of comments, many people writing about how they love it and are spending lots of time on it every day and spending all day in hangouts and such. That's a good sign, especially for a beta product that will get more refine and get new features over the next few months.

It's also very effective to get G+ notifications anywhere on Google sites (search, news, finance, gmail, maps, etc). It'll make it very sticky.

The way I see it, for G+ to be successful, it doesn't have to overtake Facebook. If it does over time, that's a homerun, but even without that, it could help make Google products better (search and ads especially) and more valuable. The asymmetric follow model mean it could replace Twitter.
Title: Re: GOOGL - Google
Post by: valueInv on July 12, 2011, 01:41:41 PM
Looks like the big damage numbers that Oracle is asking for are resting on pretty shaky legal foundations and might not hold for very long:

http://www.pcworld.com/article/235076/google_disputes_damages_estimate_in_oracle_case.html
Up again, down again:

http://www.itworld.com/software/182381/judge-its-possible-google-knew-java-violation
Title: Re: GOOGL - Google
Post by: Liberty on July 13, 2011, 10:55:44 AM
It looks like Oracle might be in trouble, IBM has patented patent-trolling  ;)

http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=/netahtml/PTO/srchnum.html&r=1&f=G&l=50&s1=%2220070244837%22.PGNR.&OS=DN/20070244837&RS=DN/20070244837
Title: Re: GOOGL - Google
Post by: valueInv on July 13, 2011, 11:28:01 AM
It looks like Oracle might be in trouble, IBM has patented patent-trolling  ;)

http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=/netahtml/PTO/srchnum.html&r=1&f=G&l=50&s1=%2220070244837%22.PGNR.&OS=DN/20070244837&RS=DN/20070244837

Won't withstand a patent review, too much prior art ;)
Title: Re: GOOGL - Google
Post by: Liberty on July 13, 2011, 11:28:58 AM
It looks like Oracle might be in trouble, IBM has patented patent-trolling  ;)

http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=/netahtml/PTO/srchnum.html&r=1&f=G&l=50&s1=%2220070244837%22.PGNR.&OS=DN/20070244837&RS=DN/20070244837

Won't withstand a patent review, too much prior art ;)

Considering the kind of trivial and obvious stuff that they award as software patents by the truckload, I wouldn't be surprised if it passed...
Title: Re: GOOGL - Google
Post by: Liberty on July 14, 2011, 01:06:24 PM
Q2:

http://investor.google.com/earnings/2011/Q2_google_earnings.html

up 12.29% after hours right now..
Title: Re: GOOGL - Google
Post by: Liberty on July 14, 2011, 01:37:22 PM
Larry Page just said that over 10 million people are on G+, and they've had more than 1 billion items shared in a single day.

Android now at 550k activations a day. 135 million Android devices in the wild, up from 100 million 3 months ago.

Chrome at 160 million users. Last year it was 80 million.

3 billion video views per day on youtube. Live streaming of royal wedding was 100 million views. Great potential for video ads, which are higher CPM.
Title: Re: GOOGL - Google
Post by: Liberty on July 14, 2011, 07:26:19 PM
Small launch, but it will plug into social and could make google news more sticky and valuable than it already is:

http://www.google.com/support/News/bin/answer.py?hl=en&answer=1237021
Title: Re: GOOGL - Google
Post by: Liberty on July 16, 2011, 09:11:15 PM
If you are really curious about Google's back story, I recommend the books about it, but if you just want a quick overview, this Bloomberg short documentary provides the 101:

http://www.bloomberg.com/video/66114966/

Bonus: Larry Page's commencement speech at U of Michigan: http://www.youtube.com/watch?v=qFb2rvmrahc

Larry Page's stake in GOOG now worth over 16 billion: http://www.bloomberg.com/news/2011-07-15/google-ceo-page-adds-about-1-9-billion-in-personal-wealth-after-earnings.html
Title: Re: GOOGL - Google
Post by: Liberty on July 17, 2011, 04:43:23 PM
For members of the VIC, here's a recent writeup about GOOG:

http://www.valueinvestorsclub.com/value2/Idea/ViewIdea/51451
Title: Re: GOOGL - Google
Post by: matjone on July 22, 2011, 06:49:55 PM
Question for anyone who keeps tabs on this stuff - what if Apple started putting Bing as the default search on all their devices?  Not saying they would ever do this just trying to come up with ways that google's search dominance could be challenged. 
Title: Re: GOOGL - Google
Post by: valueInv on July 23, 2011, 08:38:16 AM
Question for anyone who keeps tabs on this stuff - what if Apple started putting Bing as the default search on all their devices?  Not saying they would ever do this just trying to come up with ways that google's search dominance could be challenged. 

Bing has already been slowly nipping away at Google's marketshare. If Apple makes the change, then Bing gets critical mass and the scale to create some big problems for Google. It's been a big question in my mind why Apple has not already done this. I am guessing it's probably a contract issue. They've apparently swapped out Google maps already.
Title: Re: GOOGL - Google
Post by: jeffmori7 on July 23, 2011, 09:08:28 AM
This is exactly the purpose of Android. To protect the mobile search market by ensuring Google is the default search engine on as many phones and tablets as possible.
Title: Re: GOOGL - Google
Post by: matjone on July 24, 2011, 07:18:18 PM
That's why I don't understand why they are so bulletproof.  If they have to keep up in the gadgets and gizmos game to maintain their search share then what makes their moat so wide?

Title: Re: GOOGL - Google
Post by: DCG on July 25, 2011, 05:28:07 AM
That's why I don't understand why they are so bulletproof.  If they have to keep up in the gadgets and gizmos game to maintain their search share then what makes their moat so wide?



That's a fair point.

Google's moat is in Search, and in their adwords/adsense business. When people have a choice in search engine, most people choose Google. People often don't go to Google.com to search. They use the built-in search on browsers. If the default search on popular browsers change, than in theory, that could hurt Google. It is of course east to change the default search on any browser back to Google, but less less computer savvy people won't change it back. The other side of this though, is that Internet Explorer is the most used browser in the world (for probably largely because many businesses don't let people install better browsers on company computers), and Microsoft set it to use Bing as the default search, and it had little effect on Google.
Title: Re: GOOGL - Google
Post by: Liberty on July 27, 2011, 10:53:06 AM
Software patents are such a mess.. everybody infringes on everybody because there are tens of thousands of really obvious things that any skilled practitioner would come up with on their own that are patented (usually in legalese that has to be interpreted), and there's no way to really know if the code you're writing is patented somewhere..

Anyway, the saga continues:

http://www.dailytech.com/Judge+Finds+Apple+in+Violation+of+HTCs+Newly+Acquired+Patents/article22275.htm
Title: Re: GOOGL - Google
Post by: valueInv on July 28, 2011, 07:28:54 AM
Google seems to be on the defensive on the Oracle case also:

http://allthingsd.com/20110727/old-email-may-bite-google-in-java-patent-suit/
Title: Re: GOOGL - Google
Post by: valueInv on July 28, 2011, 07:30:33 AM
Another player in the mobile OS market. Could be derived from Android:

http://www.penn-olson.com/2011/07/28/aliyun-launch/
Title: Re: GOOGL - Google
Post by: Liberty on July 29, 2011, 06:48:56 AM
Google bought patents from IBM, and might still buy InterDigital. This might be enough for MAD (mutually assured destruction) and keeping patent suits away.

http://online.wsj.com/article/SB10001424053111904800304576475663046346104.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond
Title: Re: GOOGL - Google
Post by: txlaw on July 29, 2011, 08:03:22 AM
Google bought patents from IBM, and might still buy InterDigital. This might be enough for MAD (mutually assured destruction) and keeping patent suits away.

http://online.wsj.com/article/SB10001424053111904800304576475663046346104.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond

It's sad that Google has to go to such lengths to pose the threat necessary for a MAD strategy. 

The US patent system is a mess, and it's stifling rather than promoting innovation.  I recently listened to a good TAL episode that might interest you guys:  http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

There's a lot of focus on Intellectual Ventures, which is Nathan Myrhvold's company.  I was talking to a patent lawyer yesterday, and I brought up Intellectual Ventures, and he responded like so:  "Well, there are patent trolls . . . and then there are patent trolls!"  The lawyer also mentioned that IBM has some pretty idiotic patents.
Title: Re: GOOGL - Google
Post by: Liberty on July 31, 2011, 12:48:09 PM
More good news about Chrome:

http://www.guardian.co.uk/technology/2011/jul/31/google-chrome-popular-web-browser

They mention that the goal was to help other browsers improve faster, no doubt because the faster the web is, and the more secure it is, the more pages people will look at, and the more money google will make (via searches, adsense on other sites, etc).

It's a bit like Android. Even non-Android products have been affected by it, mostly in ways that are positive for Google. Even non-Chrome browsers have been affected by it...
Title: Re: GOOGL - Google
Post by: Liberty on August 02, 2011, 09:10:23 PM
http://mashable.com/2011/08/02/android-market-share/

Quote
Google Android captured 48% of the smartphone market in Q2 of 2011, hitting an all-time high, according to a report by market research firm Canalys.

Smartphone adoption continues to grow rapidly across the world, reaching a total of 107.7 million units shipped in Q2 of 2011, a 73% year-on-year growth.

Android was the biggest driver of smartphone shipments in Q2, as Android-based smartphone shipments were up 379% year-over-year, coming in at 51.9 million total units shipped. The report cites successful Android-based products from vendors such as Samsung, HTC, LG, Motorola, Sony Ericsson, ZTE and Huawei, as a catalyst for the platform’s growth.
Title: Re: GOOGL - Google
Post by: valueInv on August 09, 2011, 04:33:53 PM
Android seems to be running into more and more legal problems:

http://www.computerworld.com/s/article/9219024/German_court_s_ruling_may_pose_long_term_concerns_over_Android_?taxonomyId=88&pageNumber=1

http://fosspatents.blogspot.com/2011/08/judge-does-not-allow-google-to.html



Title: Re: GOOGL - Google
Post by: tombgrt on August 15, 2011, 05:06:40 AM
http://online.wsj.com/article/SB10001424053111903392904576509953821437960.html

 :o
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 05:29:27 AM
http://online.wsj.com/article/SB10001424053111903392904576509953821437960.html

 :o

Wow. At first glance, I don't understand them doing this, but have to read further into it. It sounds like they're buying it for their patents. What I don't want to see google doing is getting into the hardware business, especially while keeping android open source.
Title: Re: GOOGL - Google
Post by: abyli on August 15, 2011, 05:41:30 AM
Larry Page's letter:

http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html
Title: Re: GOOGL - Google
Post by: misterstockwell on August 15, 2011, 06:04:28 AM
Larry Page's letter:

http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html

That's such a joke. You can't license a platform and also compete with your licensees.
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 06:10:32 AM
I'm just not clear what they are looking to do with Motorola? What patents does Motorola own that Google must have? Is Google planning on using Motorola to produce hardware? If so, why not buy HTC, which produces better products? Page's blog is very unclear. Seems like either way, it will probably take a while to see a return on the $12.5 Billion investment.
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 06:32:34 AM
I'm just not clear what they are looking to do with Motorola? What patents does Motorola own that Google must have? Is Google planning on using Motorola to produce hardware? If so, why not buy HTC, which produces better products? Page's blog is very unclear. Seems like either way, it will probably take a while to see a return on the $12.5 Billion investment.

Motorola Mobility has 24,500 patents. Google's lawsuit problems are basically over, because they now have a "mutually assured destruction" type of defence.

Also, vertical integration of hardware and software seems to be the preferred model since Apple has shown how well it can work, though Motorola certainly isn't Apple and Google probably will not integrate it as tightly.

I'm still not sure what I think of this. But over the long term, what matters is the patents, IMHO.

I sold my GOOG recently (I figured a 20% profit in about a month wasn't bad) to raise cash for other more undervalued stuff I wanted to buy during the crash. But they are still definitely on my watchlist and I wouldn't be surprised to own them again someday.
Title: Re: GOOGL - Google
Post by: ragnarisapirate on August 15, 2011, 07:01:57 AM
I find it hard to understand the logic where buying MOT actually enhances competition in the marketplace. Especially when he talks about buying MOT strengthening GOOG. Unless a stronger Google is good for competition...
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 07:04:43 AM
Also, vertical integration of hardware and software seems to be the preferred model since Apple has shown how well it can work, though Motorola certainly isn't Apple and Google probably will not integrate it as tightly.

The isssues are that vertical integration doesn't really give you much of a competitive advantage when your operating system is open sourced (companies like HTC can still make better products using Android than Motorola/Google), and the open-sourced nature of the OS is likely to hurt margins on hardware (as it is already doing for the companies currently building Android devices). Secondly, Google tried vertical integration with their Nexus 1 collaboration with HTC and they failed at it. The device itself was fine, but Google was not at all prepared to handle the amount of customer service, tech support, & billing issues that came along with being a retailer. They also didn't take into account that due to the open source nature of Android, the lifespan of devices (before competitors release newer and better products) is incredibly short. Apple has control over that and the lifespan of their products is longer. Building their own hardware (and again, handling all the service and retailing issues that comes along with that) would most likely result in the need to spend a lot more on hiring many more employees.

I am a Google shareholder, but unless they close off Android to other developers, I don't see how them integrating hardware will be a good thing. Companies like Dell, HPQ and all the other computer manufacturers that build PC's running windows have learned how difficult it is to be profitable doing that.

I'd assume a majority of Motorola's patents are hardware related, correct? I have a hard time seeing how all these patents will allow Google to improve Android. If this is just a play at depending and preventing lawsuits, $12.5 billion seems like a pretty hefty price tag for that.
Title: Re: GOOGL - Google
Post by: bluedevil on August 15, 2011, 07:49:26 AM
I think this is about Apple.  They've been phenomenally successful both in sales of products like the Ipad and in waging a patent war against Android phone makers.  This purchase:

(1) helps protect android's patent portfolio
(2) creates a company (MM backed by Google) that has the money and talent to wage a long-term battle with Apple in smartphones, Ipads, home tvs, etc.

I think the idea (like with the Chrome browser and notebook, Android, etc.) is not necessarily to make money off the venture, but to ensure that low-cost, high-quality competition crimps Apple to the point where it cannot start to monopolize certain categories of devices that then could be used to encroach on Google's cash cow -- search.

Apple is on pace for 28 billion (!) in profits per year.  Imagine Apple competing with a device maker that (1) gets its software free from Google and (2) is not overly concerned about profit in general; (3) has the enormous financial clout of Google standing behind it.  I don't think this company will kill Apple by any means, but it may be able to crimp Apple's profit margins and dominance in certain products.
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 08:27:51 AM
One thing that this brings into focus for me: If Motorola Mobile with its 24,500 patents and all of its hardware-making capabilities, etc, is worth 12.5b... Skype wasn't worth anywhere near 8b, IMO.
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 08:32:51 AM
An interesting comment from another forum:

Quote
If there is one company I trust to not screw this up it's Google and I think they have a good shot at getting this right. I'm sure their partner companies are going to be a bit ansy to start but they all compete on hardware / price anyhow which this doesn't change. A few points that pop to mind:
A. They already had to compete with Motorola, so they haven't lost or gained a new competitor.
B. They don't pay for Android so Motorola hasn't gotten some new financial edge. Google just has to ensure that all companies still get source releases at the same time. What they do with them is up to them. (aside: I expect we will see MotoBlur disappear with some of its key features rolled into future Android releases)
C. This will allow Google to protect Android much better which is very beneficial to their bottom lines, especially if it keeps patent licensing costs off of their products.
D. Google just has to be sure they don't play favorites but from what I have seen up until now they have been good about that.
E. This just brought the competition for who gets to build the next Nexus to an end. (unless the next Nexus is already basically "done" at another partner company)
I think they can get this right... and now hopefully we can get a whole line of nice Motorola hardware with current Android and unlocked boot-loaders, etc. I might have to reconsider the Droid 3 again (more like Droid 4 one day, since 3 is already in the wild as is)
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 08:38:51 AM
I think this is about Apple.  They've been phenomenally successful both in sales of products like the Ipad and in waging a patent war against Android phone makers.  This purchase:

(1) helps protect android's patent portfolio
(2) creates a company (MM backed by Google) that has the money and talent to wage a long-term battle with Apple in smartphones, Ipads, home tvs, etc.

I think the idea (like with the Chrome browser and notebook, Android, etc.) is not necessarily to make money off the venture, but to ensure that low-cost, high-quality competition crimps Apple to the point where it cannot start to monopolize certain categories of devices that then could be used to encroach on Google's cash cow -- search.

Apple is on pace for 28 billion (!) in profits per year.  Imagine Apple competing with a device maker that (1) gets its software free from Google and (2) is not overly concerned about profit in general; (3) has the enormous financial clout of Google standing behind it.  I don't think this company will kill Apple by any means, but it may be able to crimp Apple's profit margins and dominance in certain products.

But how will the devices they make be any different than the devices companies like Motorola, HTC, LG Samsung and others have produced running Android? Apple currently competes with all these companies that get Android for free and it hasn't effected their dominance in certain products. Do you think Google branded products are really going to significantly outsell the Android products made by HTC, Samsung, etc? They can only really compete with Apple in terms of producing hardware if they close of Android to other companies.
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 08:43:31 AM
An interesting comment from another forum:

Quote
If there is one company I trust to not screw this up it's Google and I think they have a good shot at getting this right. I'm sure their partner companies are going to be a bit ansy to start but they all compete on hardware / price anyhow which this doesn't change. A few points that pop to mind:
A. They already had to compete with Motorola, so they haven't lost or gained a new competitor.
B. They don't pay for Android so Motorola hasn't gotten some new financial edge. Google just has to ensure that all companies still get source releases at the same time. What they do with them is up to them. (aside: I expect we will see MotoBlur disappear with some of its key features rolled into future Android releases)
C. This will allow Google to protect Android much better which is very beneficial to their bottom lines, especially if it keeps patent licensing costs off of their products.
D. Google just has to be sure they don't play favorites but from what I have seen up until now they have been good about that.
E. This just brought the competition for who gets to build the next Nexus to an end. (unless the next Nexus is already basically "done" at another partner company)
I think they can get this right... and now hopefully we can get a whole line of nice Motorola hardware with current Android and unlocked boot-loaders, etc. I might have to reconsider the Droid 3 again (more like Droid 4 one day, since 3 is already in the wild as is)

This sort of implies that they will keep Motorola as a wholly owned subsidiary, which also doesn't make sense to me. Google's brand is much better than Motorola, so I don't see why they would continue to produce hardware under the Motorola name.

I also don't understand Android being free to Google. Pretty sure Google's developers don't work for free.
Title: Re: GOOGL - Google
Post by: zarley on August 15, 2011, 08:49:23 AM
This sort of implies that they will keep Motorola as a wholly owned subsidiary, which also doesn't make sense to me. Google's brand is much better than Motorola, so I don't see why they would continue to produce hardware under the Motorola name.

I also don't understand Android being free to Google. Pretty sure Google's developers don't work for free.

Google's brand in phone hardware is nowhere near Motorola.  Plus, Google has historically gotten it's logo on third party android handsets, which I suspect it will want to continue (without the confusion of an actual Google brand phone line).  Killing the Moto brand would, I think, be counterproductive.
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 08:57:07 AM
But how will the devices they make be any different than the devices companies like Motorola, HTC, LG Samsung and others have produced running Android? Apple currently competes with all these companies that get Android for free and it hasn't effected their dominance in certain products. Do you think Google branded products are really going to significantly outsell the Android products made by HTC, Samsung, etc? They can only really compete with Apple in terms of producing hardware if they close of Android to other companies.

It's a defensive move first. Google needed the patent warchest to defend itself. Anything else is a bonus.

Having hardware engineers in-house will help Google's software engineers do a better job, and Google and other Android makers now know that the platform is better defended because they know Google will jump in if there are more legal challenges. This probably makes Android more sticky, rather than less (I'm sure they'll want to be reassured about a few things, but it's in Google's advantage to give them credible guarantees).

As for Apple dominating, let's play the "what if" game. What if Android didn't exist? I'm sure Apple would make a lot more money against just RIM and Nokia and Winphones and such, so it's not like Android isn't competing.
Title: Re: GOOGL - Google
Post by: valueInv on August 15, 2011, 09:02:39 AM
I'm just not clear what they are looking to do with Motorola? What patents does Motorola own that Google must have? Is Google planning on using Motorola to produce hardware? If so, why not buy HTC, which produces better products? Page's blog is very unclear. Seems like either way, it will probably take a while to see a return on the $12.5 Billion investment.

Motorola Mobility has 24,500 patents. Google's lawsuit problems are basically over, because they now have a "mutually assured destruction" type of defence.

Are you sure? Apple has sued Samsung and HTC, the no 1 and 2 Android vendors, not Google. Is Google going to spend money to protect its (now) competitors to which Motorola/Google has been losing marketshare to? Oracle sued Google on Java. Do you think Oracle is violating enough Motorola patents that it will change the tide of the lawsuit, given that Oracle really doesn't have a significant mobile presence?

Google spend $12.5B dollars to protect a $1B Android revenue, some of which is canabalized search revenue. How much more are they going to spend on Interdigital's patents? Apple has spent only $2.5 B on patents even though its mobile revenues are much, much, much higher. Do you think Apple has much larger firepower to outbid Google for Interdigital's patents?
  
Title: Re: GOOGL - Google
Post by: valueInv on August 15, 2011, 09:05:13 AM
This sort of implies that they will keep Motorola as a wholly owned subsidiary, which also doesn't make sense to me. Google's brand is much better than Motorola, so I don't see why they would continue to produce hardware under the Motorola name.

I also don't understand Android being free to Google. Pretty sure Google's developers don't work for free.

Google's brand in phone hardware is nowhere near Motorola.  Plus, Google has historically gotten it's logo on third party android handsets, which I suspect it will want to continue (without the confusion of an actual Google brand phone line).  Killing the Moto brand would, I think, be counterproductive.

It was Google's brand that sold Android phones. If you look carefully, Motorola's got its first Android success at Verizon which branded the phones at "Droid", Motorola's brand was de-emphasized. 
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 09:19:06 AM
Are you sure? Apple has sued Samsung and HTC, the no 1 and 2 Android vendors, not Google. Is Google going to spend money to protect its (now) competitors to which Motorola/Google has been losing marketshare to? Oracle sued Google on Java. Do you think Oracle is violating enough Motorola patents that it will change the tide of the lawsuit, given that Oracle really doesn't have a significant mobile presence?

Google spend $12.5B dollars to protect a $1B Android revenue, some of which is canabalized search revenue. How much more are they going to spend on Interdigital's patents? Apple has spent only $2.5 B on patents even though its mobile revenues are much, much, much higher. Do you think Apple has much larger firepower to outbid Google for Interdigital's patents?
  

Chances are very high that Google will create a patent pool and give access to patents to Android handset makers and try to protect the whole ecosystem. The way software patents work, everybody is infringing a bunch of patents of everybody else, the question isn't "if", it only depends if you want to sue. I suggest you listen to this: http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

The 1B revenue for Android is missing the point. Android is much, much more valuable than that long term (both as a revenue source and as a moat), and mobile searches, from the data that I've seen, aren't cannibalising desktop searches much at all (they are very complementary - ie. more during lunch breaks, the evenings and weekends, while desktop searches are more during working hours).

Motorola isn't just a bunch of patents, though, it can be a profitable business that can now become better than it has been so far thanks to access to Google's talent and money.
Title: Re: GOOGL - Google
Post by: zarley on August 15, 2011, 09:43:55 AM
This sort of implies that they will keep Motorola as a wholly owned subsidiary, which also doesn't make sense to me. Google's brand is much better than Motorola, so I don't see why they would continue to produce hardware under the Motorola name.

I also don't understand Android being free to Google. Pretty sure Google's developers don't work for free.

Google's brand in phone hardware is nowhere near Motorola.  Plus, Google has historically gotten it's logo on third party android handsets, which I suspect it will want to continue (without the confusion of an actual Google brand phone line).  Killing the Moto brand would, I think, be counterproductive.

It was Google's brand that sold Android phones. If you look carefully, Motorola's got its first Android success at Verizon which branded the phones at "Droid", Motorola's brand was de-emphasized. 

I disagree with your characterization, but there's probably not much sense in arguing the point.  As I look at my first gen Droid, I see Motorola and Verizon on the front, and Google and Verizon on the back.  The Motorola branding was secondary in the Verizon marketing in favor of the Droid line, but that was confusing as there were multiple "Droid" phones from multiple handset makers. 

What rebranding could Google do?

(1)Kill Motorola and sell those phones under and "Android" brand? No, Android is the generic OS name.
(2)Kill Motorola and sell those phones under some version of the "Droid" brand?  No, Droid is a Verizon line (licensed from Lucas) from various manufacturers.
(3)Kill Motorola and sell those phones under the Google brand? Maybe, but is Google better than Motorola in terms of brand identity in mobile phone hardware?  IMO, no.
(4)Kill Motorola and sell those phones under some other new brand?  That might be a worse option than #3

And, don't forget Google's only foray into an actual Google phone (Nexus One, Nexus S) was a giant waste of time and money.

Best to leave the Motorola brand alone, at least for now.
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 10:58:24 AM
is Google better than Motorola in terms of brand identity in mobile phone hardware?  IMO, no.

Maybe not yet, but while Motorola is a well known brand, they're not really known for being a good brand. Go and read Android forums, review sites and tech blogs. Most of their phones are perceived as being garbage (and as an owner of Motorola Android phone, I agree with that and have no desire to buy another phone made by Motorola).
Title: Re: GOOGL - Google
Post by: Junto on August 15, 2011, 11:29:21 AM
Don't forget that MMI has $3 billion in cash on the books, so the effective price is $9.5 billion...
Title: Re: GOOGL - Google
Post by: valueInv on August 15, 2011, 12:43:14 PM
Are you sure? Apple has sued Samsung and HTC, the no 1 and 2 Android vendors, not Google. Is Google going to spend money to protect its (now) competitors to which Motorola/Google has been losing marketshare to? Oracle sued Google on Java. Do you think Oracle is violating enough Motorola patents that it will change the tide of the lawsuit, given that Oracle really doesn't have a significant mobile presence?

Google spend $12.5B dollars to protect a $1B Android revenue, some of which is canabalized search revenue. How much more are they going to spend on Interdigital's patents? Apple has spent only $2.5 B on patents even though its mobile revenues are much, much, much higher. Do you think Apple has much larger firepower to outbid Google for Interdigital's patents?
  

Chances are very high that Google will create a patent pool and give access to patents to Android handset makers and try to protect the whole ecosystem. The way software patents work, everybody is infringing a bunch of patents of everybody else, the question isn't "if", it only depends if you want to sue. I suggest you listen to this: http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

The 1B revenue for Android is missing the point. Android is much, much more valuable than that long term (both as a revenue source and as a moat), and mobile searches, from the data that I've seen, aren't cannibalising desktop searches much at all (they are very complementary - ie. more during lunch breaks, the evenings and weekends, while desktop searches are more during working hours).

Motorola isn't just a bunch of patents, though, it can be a profitable business that can now become better than it has been so far thanks to access to Google's talent and money.

If Google defends its new competitors with its patent portfolio, it will help them and Motorola will lose even more market share. For a business this is not profitable already, that would hurt. If on the other hand, Google favors its Motorola division to produce better integrated handsets, it is likely to anger the ecosystem resulting in more fragmentation and forking and weakening of the Android ecosytem. I think Microsoft is the biggest gainer here.

The 1B revenue IS the point for investors. That 1B includes Googles IOS revenues, not just Android. If that is all that it can bring in with 50% market share , what does it make assuming 100% marketshare 3 years down the line?  What do the slim margins among Android handset makers do to Google's margins? Android has succeeded by producing cheaper handsets. Google has taken a commoditization approach to win while the handset makers bore the slim margins. Now, Google also bears the cost of its commoditization.

It is a big leap to conclude from the timing of searches that revenue is not being cannibalized. How do you know that a search being performed while standing in line at Starbucks at 8:00 would not have been performed at 9:30 on the desktop, if mobile search didn't exist?

Google has just hung a dead weight around its neck. It now has to deal with integration issues, culture clashes, regulatory issues and more. For a company that built itself on efficiency and nimbleness, this is a big issue.

BTW, what happens to this?

http://online.wsj.com/article/SB10001424053111904823804576500544082214566.html?mod=rss_whats_news_us_business&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+Feedfetcher
Title: Re: GOOGL - Google
Post by: valueInv on August 15, 2011, 12:46:22 PM
I disagree with your characterization, but there's probably not much sense in arguing the point.  As I look at my first gen Droid, I see Motorola and Verizon on the front, and Google and Verizon on the back.  The Motorola branding was secondary in the Verizon marketing in favor of the Droid line, but that was confusing as there were multiple "Droid" phones from multiple handset makers. 

You referred to your phone as "my first gen Droid", not Motorola smartphone - that is branding. Verizon succeed with you in its branding efforts.
Title: Re: GOOGL - Google
Post by: zarley on August 15, 2011, 12:52:44 PM
I disagree with your characterization, but there's probably not much sense in arguing the point.  As I look at my first gen Droid, I see Motorola and Verizon on the front, and Google and Verizon on the back.  The Motorola branding was secondary in the Verizon marketing in favor of the Droid line, but that was confusing as there were multiple "Droid" phones from multiple handset makers. 

You referred to your phone as "my first gen Droid", not Motorola smartphone - that is branding. Verizon succeed with you in its branding efforts.

Well, that's the name of the phone, so, I guess you got me there.  The more important point however, is that Droid is a Verizon brand not a Google brand, and as a result, not really an option as a replacement for Motorola. 
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 01:10:25 PM
Droid is a Verizon brand not a Google brand, and as a result, not really an option as a replacement for Motorola.  

I'm a bit confused by your point here; Google Android is the real brand. Verizon markets the Android devices they carry under the 'Droid' name, but they are all Android devices, and pretty much the same devices can be purchased through various carriers throughout the world. Most people know this, and you generally dissociate with the Verizon marketing after you walk out of the Verizon Wireless store, and the brand becomes all about Google.

The hardware is a commodity, the same way PC's are for the manufacturers. I have to think that the patents are really what Google wanted, but as I said earlier, if the patents are mostly related to hardware, I'm not really sure why they want them. As I said earlier in this thread, unless Google decides to stop allowing other companies to use Android, Google using Motorola to produce hardware makes little sense to me. If Google just want the patents and decides to shut down Motorola as a producer of hardware, then the real winners become companies like HTC, Samsung, LG, etc..

ETA: I just read this info on Forbes: "Google intends to run Motorola as a separate company that will continue to develop Android devices. Android will remain an open platform, allowing other companies to develop devices that run the platform".


Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 01:23:03 PM
If Google defends its new competitors with its patent portfolio, it will help them and Motorola will lose even more market share. For a business this is not profitable already, that would hurt. If on the other hand, Google favors its Motorola division to produce better integrated handsets, it is likely to anger the ecosystem resulting in more fragmentation and forking and weakening of the Android ecosytem. I think Microsoft is the biggest gainer here.

The 1B revenue IS the point for investors. That 1B includes Googles IOS revenues, not just Android. If that is all that it can bring in with 50% market share , what does it make assuming 100% marketshare 3 years down the line?  What do the slim margins among Android handset makers do to Google's margins? Android has succeeded by producing cheaper handsets. Google has taken a commoditization approach to win while the handset makers bore the slim margins. Now, Google also bears the cost of its commoditization.

It is a big leap to conclude from the timing of searches that revenue is not being cannibalized. How do you know that a search being performed while standing in line at Starbucks at 8:00 would not have been performed at 9:30 on the desktop, if mobile search didn't exist?

Google has just hung a dead weight around its neck. It now has to deal with integration issues, culture clashes, regulatory issues and more. For a company that built itself on efficiency and nimbleness, this is a big issue.

BTW, what happens to this?

http://online.wsj.com/article/SB10001424053111904823804576500544082214566.html?mod=rss_whats_news_us_business&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+Feedfetcher

Not sure if you've read some of my earlier comments in this thread and the MSFT thread, but I answer some of those questions. I think you are misunderstanding GOOG's strategy in that space and focusing on the wrong things. Like Berkshire, they are in it for the long-term.
Title: Re: GOOGL - Google
Post by: zarley on August 15, 2011, 01:33:42 PM
I just lost a longer reply, but it boils down to:  yes the patents are the critical piece of the transaction for Google.  But, there is value in the handset business which is best realized through keeping the Motorola handset business active in the market (not killing it or rebranding the hardware).  They could scrape the patents out and resell the husk of the handset business, but that seem like a hard and expensive way to get the patents.



Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 02:35:59 PM
Quotes from Android partners:

http://www.google.com/press/motorola/quotes/


Quote
“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
– J.K. Shin
President, Samsung, Mobile Communications Division

“I welcome Google‘s commitment to defending Android and its partners.”
– Bert Nordberg
President & CEO, Sony Ericsson

“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– Peter Chou
CEO, HTC Corp.

“We welcome Google‘s commitment to defending Android and its partners.”
– Jong-Seok Park, Ph.D
President & CEO, LG Electronics Mobile Communications Company

“We are positive towards Google’s continued commitment and investment in an open Android for the benefit of all players in the eco-system.”
– Weili Dai
Co-founder, Marvell Technology Group

“Best Buy has worked closely with both Google and Motorola to bring great solutions to our customers. Now, with today’s news, we are excited to see what we can do together to serve consumers. Both companies have been tremendous partners to Best Buy and we expect that connection to get even stronger in the future.”
– Brian J. Dunn
CEO, Best Buy
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 02:40:45 PM
Apparently, MSFT might have wanted to buy Motorola too: http://gigaom.com/2011/08/15/guess-who-else-wanted-to-buy-motorola/
Title: Re: GOOGL - Google
Post by: DCG on August 15, 2011, 03:04:27 PM
Quotes from Android partners:

http://www.google.com/press/motorola/quotes/


Quote
“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
– J.K. Shin
President, Samsung, Mobile Communications Division

“I welcome Google‘s commitment to defending Android and its partners.”
– Bert Nordberg
President & CEO, Sony Ericsson

“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– Peter Chou
CEO, HTC Corp.

“We welcome Google‘s commitment to defending Android and its partners.”
– Jong-Seok Park, Ph.D
President & CEO, LG Electronics Mobile Communications Company

“We are positive towards Google’s continued commitment and investment in an open Android for the benefit of all players in the eco-system.”
– Weili Dai
Co-founder, Marvell Technology Group

“Best Buy has worked closely with both Google and Motorola to bring great solutions to our customers. Now, with today’s news, we are excited to see what we can do together to serve consumers. Both companies have been tremendous partners to Best Buy and we expect that connection to get even stronger in the future.”
– Brian J. Dunn
CEO, Best Buy

I guess those could also be read as 'were scared that Google will close android off to other manufactures in the future, so we better start kissing some ass'.  :P
Title: Re: GOOGL - Google
Post by: Liberty on August 15, 2011, 07:48:39 PM
I guess those could also be read as 'were scared that Google will close android off to other manufactures in the future, so we better start kissing some ass'.  :P

Without any context, maybe, but if you know others things that Google has done, it's obvious that they intend to keep Android open and that this move is likely to have benefits to other Android handset makers. Google runs on linux, contributes to countless open source projects, has opened the code to Chrome's browser and javascript engine, Chrome OS, and Android. This is a logical continuation of their strategy, and trying to be the sole 'owner' of Android would just hurt the platform and make it less competitive.
Title: Re: GOOGL - Google
Post by: valueInv on August 16, 2011, 08:33:33 AM
If Google defends its new competitors with its patent portfolio, it will help them and Motorola will lose even more market share. For a business this is not profitable already, that would hurt. If on the other hand, Google favors its Motorola division to produce better integrated handsets, it is likely to anger the ecosystem resulting in more fragmentation and forking and weakening of the Android ecosytem. I think Microsoft is the biggest gainer here.

The 1B revenue IS the point for investors. That 1B includes Googles IOS revenues, not just Android. If that is all that it can bring in with 50% market share , what does it make assuming 100% marketshare 3 years down the line?  What do the slim margins among Android handset makers do to Google's margins? Android has succeeded by producing cheaper handsets. Google has taken a commoditization approach to win while the handset makers bore the slim margins. Now, Google also bears the cost of its commoditization.

It is a big leap to conclude from the timing of searches that revenue is not being cannibalized. How do you know that a search being performed while standing in line at Starbucks at 8:00 would not have been performed at 9:30 on the desktop, if mobile search didn't exist?

Google has just hung a dead weight around its neck. It now has to deal with integration issues, culture clashes, regulatory issues and more. For a company that built itself on efficiency and nimbleness, this is a big issue.

BTW, what happens to this?

http://online.wsj.com/article/SB10001424053111904823804576500544082214566.html?mod=rss_whats_news_us_business&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+Feedfetcher

Not sure if you've read some of my earlier comments in this thread and the MSFT thread, but I answer some of those questions. I think you are misunderstanding GOOG's strategy in that space and focusing on the wrong things. Like Berkshire, they are in it for the long-term.
As you know, I've already responded on the MSFT thread. Google may be in it for the long term, but that does not mean they are going to do well. MSFT is in it for the long term too, look at how much money they are losing on Bing.

Here are some more analysis on the Motorola buy:

http://fosspatents.blogspot.com/2011/08/25-billion-google-motorola-break-up-fee.html

http://news.cnet.com/8301-13578_3-20092728-38/a-motorola-lawsuit-primer-infographic/?part=rss&subj=news&tag=2547-1_3-0-20

I'm not sure Motorola ends Android's patent problems.

Title: Re: GOOGL - Google
Post by: valueInv on August 16, 2011, 08:45:25 AM
I guess those could also be read as 'were scared that Google will close android off to other manufactures in the future, so we better start kissing some ass'.  :P

Without any context, maybe, but if you know others things that Google has done, it's obvious that they intend to keep Android open and that this move is likely to have benefits to other Android handset makers. Google runs on linux, contributes to countless open source projects, has opened the code to Chrome's browser and javascript engine, Chrome OS, and Android. This is a logical continuation of their strategy, and trying to be the sole 'owner' of Android would just hurt the platform and make it less competitive.

1, http://fosspatents.blogspot.com/2011/08/partly-eu-funded-study-finds-android.html
2, http://paidcontent.org/article/419-google-tells-itc-judge-microsoft-revealed-our-secret-source-code/
3, Google did not really open the Chrome browser. The browsing engine comes from an open source browser called Knoqueror. Apple took Konqueror's code, added more on top of it and open sourced it as a project called WebKit. Google took Webkit and built Chrome on top of it.
4, Google has technology called MapReduce that it uses extensively. Some of their engineers wrote a paper on it. Yahoo's engineers read the paper, implemented it and open sourced it as a project called Hadoop. Hadoop is now a thriving open source ecosystem with multiple companies built around. AFAIK, Google has not contributed to the open source version of its own technology. Its own MapReduce technology remains closed.
5, A company called OpenX built an open source ad exchange and serving software http://en.wikipedia.org/wiki/OpenX_(software). They have a thriving business around it: http://www.openx.com/. Google's own adserving technology remains closed.
Title: Re: GOOGL - Google
Post by: Liberty on August 16, 2011, 10:09:35 AM
I think you are cherry picking. You could find just as many sources that say the opposite about Motorola, the Chrome browser's engine might be webkit, but the rest of the browser (a browser is more than a rendering engine) is open sourced under the name Chromium and improvements are contributed back to the webkit main branch, and the javascript engine, which was revolutionary at the time of launch, is open-sourced under the name V8. Google contributes to TONS of open-source projects and funds external projects and competitions tool. They are probably the biggest corporate contributor along with IBM (probably ahead of IBM, in fact). Finding one thing that they didn't open source doesn't prove anything. People said the same thing about search at first - that it wasn't making any money and that it never would - but Google thought the priority was to focus on quality and marketshare at first before focusing on monetization. People just need to do the thought experiment of what would Google's mobile position be if Android didn't exist and how many more threats they would be facing.. Besides, I don't really believe the 1B number that is floating around for Android. Google took so long to IPO because they wanted to hide how profitable they were to competitors, and they're not breaking down Android precisely probably for the same reason. As for your answers in the MSFT thread, I don't remember seeing anything very convincing.
Title: Re: GOOGL - Google
Post by: S2S on August 16, 2011, 11:12:05 AM
http://fosspatents.blogspot.com/2011/08/25-billion-google-motorola-break-up-fee.html

http://news.cnet.com/8301-13578_3-20092728-38/a-motorola-lawsuit-primer-infographic/?part=rss&subj=news&tag=2547-1_3-0-20

I'm not sure Motorola ends Android's patent problems.



Good reads, thanks.

Since someone here quoted raving press releases from Android OEMs (seriously, what else were they supposed to say in public?), I thought Nokia's response was the most informative:

"This further reinforces our belief that opportunities for the growth of Nokia's smartphone business will be greatest with Windows Phone. This could prove to be a massive catalyst for the Windows Phone ecosystem. Additionally, with our respective intellectual property portfolios, Nokia and Microsoft are working together to build and nurture an innovative ecosystem that benefits consumers, operators, developers and other device manufacturers."
Title: Re: GOOGL - Google
Post by: Liberty on August 16, 2011, 11:26:00 AM
IMO the proof will be in the pudding. Of course everybody's going to spin this announcement and say that it will benefit them. What will matter are the actions of Google over the next couple years. We'll have to wait and see.
Title: Re: GOOGL - Google
Post by: rkbabang on August 16, 2011, 11:29:09 AM
Interesting article on low end Android phones for the 3rd world markets.

"Although Windows and Nokia encourage the adoption of their operating systems, frankly, these OS’s have either fallen from grace or have failed to get off the ground. Among these players, it seems Android is best equipped for a global presence, whereas Apple and the others probably won’t fall far from the high-end tree unless they re-calibrate their strategies. There’s enormous potential for low-end phones in developing markets, and Android is taking charge."

$80 Android Phone Sells Like Hotcakes in Kenya, the World Next? (http://singularityhub.com/2011/08/16/80-android-phone-sells-like-hotcakes-in-kenya-the-world-next/)
Title: Re: GOOGL - Google
Post by: valueInv on August 16, 2011, 05:01:10 PM
I think you are cherry picking. You could find just as many sources that say the opposite about Motorola, the Chrome browser's engine might be webkit, but the rest of the browser (a browser is more than a rendering engine) is open sourced under the name Chromium and improvements are contributed back to the webkit main branch, and the javascript engine, which was revolutionary at the time of launch, is open-sourced under the name V8. Google contributes to TONS of open-source projects and funds external projects and competitions tool. They are probably the biggest corporate contributor along with IBM (probably ahead of IBM, in fact). Finding one thing that they didn't open source doesn't prove anything. People said the same thing about search at first - that it wasn't making any money and that it never would - but Google thought the priority was to focus on quality and marketshare at first before focusing on monetization. People just need to do the thought experiment of what would Google's mobile position be if Android didn't exist and how many more threats they would be facing.. Besides, I don't really believe the 1B number that is floating around for Android. Google took so long to IPO because they wanted to hide how profitable they were to competitors, and they're not breaking down Android precisely probably for the same reason. As for your answers in the MSFT thread, I don't remember seeing anything very convincing.

For the sake of argument, lets assume I am cherrypicking. Instead, lets examine Linux, an OS widely used by Google for all its server infrastructure since day one and also as the core of Android. Would you expect that Google has made significant contributions to the OS that it has developed so much on?

Take a look: https://lwn.net/Articles/451243/

Google has been building custom server infrastructure for years, yet a relative newcomer like Facebook open sources its architecture while Google still is closed:
http://opencompute.org/

Since you don't believe the $1B Android number, maybe you can tell me what it really is? You seem to disagree with what Google had announced during a conference call:

http://thenextweb.com/mobile/2010/10/15/android-pulling-in-1-billion-revenue-this-year/


Maybe we should send Google an email asking them to correct their Android revenue estimates  ;)



Title: Re: GOOGL - Google
Post by: valueInv on August 16, 2011, 05:02:34 PM
Quotes from Android partners:

http://www.google.com/press/motorola/quotes/


Quote
“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem.”
– J.K. Shin
President, Samsung, Mobile Communications Division

“I welcome Google‘s commitment to defending Android and its partners.”
– Bert Nordberg
President & CEO, Sony Ericsson

“We welcome the news of today‘s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.”
– Peter Chou
CEO, HTC Corp.

“We welcome Google‘s commitment to defending Android and its partners.”
– Jong-Seok Park, Ph.D
President & CEO, LG Electronics Mobile Communications Company

“We are positive towards Google’s continued commitment and investment in an open Android for the benefit of all players in the eco-system.”
– Weili Dai
Co-founder, Marvell Technology Group

“Best Buy has worked closely with both Google and Motorola to bring great solutions to our customers. Now, with today’s news, we are excited to see what we can do together to serve consumers. Both companies have been tremendous partners to Best Buy and we expect that connection to get even stronger in the future.”
– Brian J. Dunn
CEO, Best Buy

I guess those could also be read as 'were scared that Google will close android off to other manufactures in the future, so we better start kissing some ass'.  :P


Maybe they're using the Android press release generator:
http://android-press-release.com/

 ; :D :D :D
Title: Re: GOOGL - Google
Post by: Liberty on August 16, 2011, 08:21:00 PM
For the sake of argument, lets assume I am cherrypicking. Instead, lets examine Linux, an OS widely used by Google for all its server infrastructure since day one and also as the core of Android. Would you expect that Google has made significant contributions to the OS that it has developed so much on?

Take a look: https://lwn.net/Articles/451243/

Google has been building custom server infrastructure for years, yet a relative newcomer like Facebook open sources its architecture while Google still is closed:
http://opencompute.org/

Since you don't believe the $1B Android number, maybe you can tell me what it really is? You seem to disagree with what Google had announced during a conference call:

http://thenextweb.com/mobile/2010/10/15/android-pulling-in-1-billion-revenue-this-year/


Maybe we should send Google an email asking them to correct their Android revenue estimates  ;)

1) I know that Google hasn't contributed as much to Linux's kernel as others (though they haven't tried to kill it like MSFT, and they contribute a lot of userland tools and libraries), but it's probably because the type of infrastructure-level modifications that they do are part of their secret sauce (how to scale massively at the lowest cost possible and with the highest performance). Facebook could lose it's performance edge and still be fine thanks to its network-effect moat, but Google's moat is in good part created by throwing more ressources at problems than anyone else (when you do things the hard way, you make it harder for competitors and you can do stuff for your users that others without the same infrastructure can't match) and being the low-cost "producer" of those computational resources.

2) I don't know what the real number is, but I know that hiding your capacities is second nature to Larry Page and has been from the very beginning (he wouldn't even tell VCs how many searches they were doing a day at first). They've waited the maximum number of time for the IPO (until they were forced to by SEC rules about number of shareholders) to avoid revealing anything about their revenues and profits and such, and I believe they're doing the same thing with Android now because it puts them in a better position to make gains in that sector. I could be wrong about that, but based on the information I have, I'd say it's likely.
Title: Re: GOOGL - Google
Post by: Liberty on August 16, 2011, 08:24:28 PM

Maybe they're using the Android press release generator:
http://android-press-release.com/

 ; :D :D :D

Yeah, I thought those were quite bad, but that's the way these things work.. They contact a company's PR at the last minute and suggest a statement and the PR guys and CEO sign off on it, usually keeping it short and keeping the original structure, often without changing it too much. It's still better than the sound of crickets after a big announcement :)
Title: Re: GOOGL - Google
Post by: meiroy on August 17, 2011, 01:42:59 AM

Interesting user comments here:
http://yro.slashdot.org/story/11/08/16/2334230/Analysis-of-Googles-Motorola-Acquisition (http://yro.slashdot.org/story/11/08/16/2334230/Analysis-of-Googles-Motorola-Acquisition)
Title: Re: GOOGL - Google
Post by: valueInv on August 17, 2011, 08:30:11 AM

1) I know that Google hasn't contributed as much to Linux's kernel as others (though they haven't tried to kill it like MSFT, and they contribute a lot of userland tools and libraries), but it's probably because the type of infrastructure-level modifications that they do are part of their secret sauce (how to scale massively at the lowest cost possible and with the highest performance). Facebook could lose it's performance edge and still be fine thanks to its network-effect moat, but Google's moat is in good part created by throwing more ressources at problems than anyone else (when you do things the hard way, you make it harder for competitors and you can do stuff for your users that others without the same infrastructure can't match) and being the low-cost "producer" of those computational resources.
Now we are getting somewhere. Google isn't any more open than most companies, it's just marketing. Since you mentioned their strategy - here it is: Commoditize the complement. They open source or undercut competitor's products and give them away for free or low cost hoping to make money up the value chain in advertising. The free giveaway allows them to get marketshare quickly. It's no surprise that they are not open sourcing their core technologies, they are not an open company, they're a commoditization company. They're open where it suits them -  competitors strengths. Android is a child of this model. Google is no Red Hat.

2) I don't know what the real number is, but I know that hiding your capacities is second nature to Larry Page and has been from the very beginning (he wouldn't even tell VCs how many searches they were doing a day at first). They've waited the maximum number of time for the IPO (until they were forced to by SEC rules about number of shareholders) to avoid revealing anything about their revenues and profits and such, and I believe they're doing the same thing with Android now because it puts them in a better position to make gains in that sector. I could be wrong about that, but based on the information I have, I'd say it's likely.

Well, if Google announced the number, then it's real isn't it? Unless you think Google is lying.
Since when does Google keep secrets? They have no problem tweeting how many Android activations they have every week or how many signups they have on Google+ and so on. This has nothing to do with capacities but their financials.

All the information you want is out there. After all, is Google is "open" isn't it?  ;) ;)
Title: Re: GOOGL - Google
Post by: Liberty on August 17, 2011, 10:27:42 AM
Now we are getting somewhere. Google isn't any more open than most companies, it's just marketing. Since you mentioned their strategy - here it is: Commoditize the complement. They open source or undercut competitor's products and give them away for free or low cost hoping to make money up the value chain in advertising. The free giveaway allows them to get marketshare quickly. It's no surprise that they are not open sourcing their core technologies, they are not an open company, they're a commoditization company. They're open where it suits them -  competitors strengths. Android is a child of this model. Google is no Red Hat.

Google isn't more open than most companies? Whatever man, this is getting tiring...

Almost all of their APIs and tools are open in one way or another, but expecting Google to open source core infrastructure stuff is like expecting them to open the search algorithm, or expecting Facebook to allow people to export their social graph and user data. If you expect them to fill in their moat, you're dreaming. Google is the biggest computer maker in the world (not the individual components, but they assemble more computers than HP or Dell), that's part of their core competency and can't be given away for obvious competitive reasons.

If you think that culture doesn't matter at a company and that Google's culture is just marketing, I suggest you read the following books: I’m Feeling Lucky: Confessions of Google Employee Number 59, The Search, and In the Plex. Google is modeled on a grad school, and while not everything in a company can work like that, it has a big influence and it makes Google different from almost all other companies in that regard.

Quote
Well, if Google announced the number, then it's real isn't it? Unless you think Google is lying.
Since when does Google keep secrets? They have no problem tweeting how many Android activations they have every week or how many signups they have on Google+ and so on. This has nothing to do with capacities but their financials.

All the information you want is out there. After all, is Google is "open" isn't it?  ;) ;)

As you know, there's more than one way to skin a cat. How much revenue something provides depends on where you set boundaries and how many indirect levels you count. In the case of Android, since they don't charge for the OS itself, that revenue is a lot fuzzier and how you define it can make a big difference. Do you count only search revenue in Android's built in search? In search used through an app downloaded afterwards? In browser search? Adsense ads clicked in mobile browsers?

And btw, your 1b number is from Q3 2010, if I'm not mistaken. At the rate at which mobile is growing, I'm pretty sure that number hasn't stayed put.

Quote
4, Google has technology called MapReduce that it uses extensively. Some of their engineers wrote a paper on it. Yahoo's engineers read the paper, implemented it and open sourced it as a project called Hadoop. Hadoop is now a thriving open source ecosystem with multiple companies built around. AFAIK, Google has not contributed to the open source version of its own technology. Its own MapReduce technology remains closed.

And you don't give them any credit for publishing the paper in the first place and making the creation of Hadoop possible in the first place? Chances are they didn't release the actual google code because studying it would have given too much information about Google's secret infrastructure, but they still put the ideas out there, which is the most important part.
Title: Re: GOOGL - Google
Post by: tombgrt on August 18, 2011, 02:38:38 PM


I sold my GOOG recently (I figured a 20% profit in about a month wasn't bad) to raise cash for other more undervalued stuff I wanted to buy during the crash. But they are still definitely on my watchlist and I wouldn't be surprised to own them again someday.

Might be sooner than later...

How soon the market forgets. GOOG lost more in market cap in three trading sessions than the cost of its Motorola acquisition.  :D
Title: Re: GOOGL - Google
Post by: valueInv on August 26, 2011, 12:11:57 AM
$200M down the drain:

http://venturebeat.com/2011/08/25/max-levchin-leaves-slide-google
Title: Re: GOOGL - Google
Post by: txlaw on August 26, 2011, 06:00:48 AM
$200M down the drain:

http://venturebeat.com/2011/08/25/max-levchin-leaves-slide-google

Expensive acqui-hire.
Title: Re: GOOGL - Google
Post by: valueInv on September 02, 2011, 02:58:12 PM
Interesting:

http://techcrunch.com/2011/09/02/amazon-kindle-tablet/

Probably do wonders for Android's tablet marketshare.
Title: Re: GOOGL - Google
Post by: Liberty on September 08, 2011, 12:51:01 PM
http://online.wsj.com/article/SB10001424053111904836104576558600549181370.html

Google buys Zagat.
Title: Re: GOOGL - Google
Post by: biaggio on September 08, 2011, 02:25:05 PM
http://online.wsj.com/article/SB10001424053111904836104576558600549181370.html

Google buys Zagat.
they must have noticed how often I google for restaurants to eat at when I am in a new city

but how will they make money with this?


Title: Re: GOOGL - Google
Post by: valueInv on September 08, 2011, 02:52:38 PM
How soon does it join these?

http://searchenginewatch.com/article/2107084/Google-Kills-10-More-Projects-Including-Aardvark   ;)

Title: Re: GOOGL - Google
Post by: Liberty on September 08, 2011, 07:39:35 PM
they must have noticed how often I google for restaurants to eat at when I am in a new city

but how will they make money with this?

It makes their mobile offerings better. More people using them = more people clicking on ads in them = more money.
Title: Re: GOOGL - Google
Post by: Liberty on September 08, 2011, 07:41:16 PM
How soon does it join these?

http://searchenginewatch.com/article/2107084/Google-Kills-10-More-Projects-Including-Aardvark   ;)

Google's model is to release early and often and see what sticks, lots of beta stuff and projects developed by a couple of engineers. Very different from Apple's model. The important part to make this a success is to also fail quickly when it doesn't work so you don't have zombie projects that hang around for years.

Larry Page seems to want to do an early spring cleaning this year, though.
Title: Re: GOOGL - Google
Post by: valueInv on September 09, 2011, 08:24:04 AM
How soon does it join these?

http://searchenginewatch.com/article/2107084/Google-Kills-10-More-Projects-Including-Aardvark   ;)

Google's model is to release early and often and see what sticks, lots of beta stuff and projects developed by a couple of engineers. Very different from Apple's model. The important part to make this a success is to also fail quickly when it doesn't work so you don't have zombie projects that hang around for years.

Larry Page seems to want to do an early spring cleaning this year, though.

I was pointing to the fact that Google buys companies and often kills them - Slide, Advaark, DodgeBall, parts of Postini, etc. There are other acquisitions what products I know of that no one inside Google is working on. They are effectively dead but have not been announced externally.   
Title: Re: GOOGL - Google
Post by: Liberty on September 09, 2011, 08:37:12 AM
I was pointing to the fact that Google buys companies and often kills them - Slide, Advaark, DodgeBall, parts of Postini, etc. There are other acquisitions what products I know of that no one inside Google is working on. They are effectively dead but have not been announced externally.

Indeed, they often acquire companies to get the talent, or to get parts of the technology which are merged into bigger products. It's not because the stand-alone product/company doesn't live on that all is lost.
Title: Re: GOOGL - Google
Post by: valueInv on September 10, 2011, 09:51:06 AM
I was pointing to the fact that Google buys companies and often kills them - Slide, Advaark, DodgeBall, parts of Postini, etc. There are other acquisitions what products I know of that no one inside Google is working on. They are effectively dead but have not been announced externally.

Indeed, they often acquire companies to get the talent, or to get parts of the technology which are merged into bigger products. It's not because the stand-alone product/company doesn't live on that all is lost.

The talent seems to take the money are run and start companies that compete with Google:

Evan Williams - Sold blogger to Google and went on to found Twitter. Has refused offers to sell Twitter to Google
Dick Costolo - Sold Feedburner to Google, now leads Twitter, competing with Google
Denis Crowley - Sold Dodgeball, complained about how he couldn't get anything done at Google, left to found Foursquare
Mac Levchin - Sold Slide to Google and quit/pushed out soon after.

These guys use the credibility and the money gained from the acquisition to found the new companies.
Title: Re: GOOGL - Google
Post by: valueInv on September 10, 2011, 09:53:56 AM
Now we are getting somewhere. Google isn't any more open than most companies, it's just marketing. Since you mentioned their strategy - here it is: Commoditize the complement. They open source or undercut competitor's products and give them away for free or low cost hoping to make money up the value chain in advertising. The free giveaway allows them to get marketshare quickly. It's no surprise that they are not open sourcing their core technologies, they are not an open company, they're a commoditization company. They're open where it suits them -  competitors strengths. Android is a child of this model. Google is no Red Hat.

Google isn't more open than most companies? Whatever man, this is getting tiring...

Almost all of their APIs and tools are open in one way or another, but expecting Google to open source core infrastructure stuff is like expecting them to open the search algorithm, or expecting Facebook to allow people to export their social graph and user data. If you expect them to fill in their moat, you're dreaming. Google is the biggest computer maker in the world (not the individual components, but they assemble more computers than HP or Dell), that's part of their core competency and can't be given away for obvious competitive reasons.

If you think that culture doesn't matter at a company and that Google's culture is just marketing, I suggest you read the following books: I’m Feeling Lucky: Confessions of Google Employee Number 59, The Search, and In the Plex. Google is modeled on a grad school, and while not everything in a company can work like that, it has a big influence and it makes Google different from almost all other companies in that regard.

Quote
Well, if Google announced the number, then it's real isn't it? Unless you think Google is lying.
Since when does Google keep secrets? They have no problem tweeting how many Android activations they have every week or how many signups they have on Google+ and so on. This has nothing to do with capacities but their financials.

All the information you want is out there. After all, is Google is "open" isn't it?  ;) ;)

As you know, there's more than one way to skin a cat. How much revenue something provides depends on where you set boundaries and how many indirect levels you count. In the case of Android, since they don't charge for the OS itself, that revenue is a lot fuzzier and how you define it can make a big difference. Do you count only search revenue in Android's built in search? In search used through an app downloaded afterwards? In browser search? Adsense ads clicked in mobile browsers?

And btw, your 1b number is from Q3 2010, if I'm not mistaken. At the rate at which mobile is growing, I'm pretty sure that number hasn't stayed put.

Quote
4, Google has technology called MapReduce that it uses extensively. Some of their engineers wrote a paper on it. Yahoo's engineers read the paper, implemented it and open sourced it as a project called Hadoop. Hadoop is now a thriving open source ecosystem with multiple companies built around. AFAIK, Google has not contributed to the open source version of its own technology. Its own MapReduce technology remains closed.

And you don't give them any credit for publishing the paper in the first place and making the creation of Hadoop possible in the first place? Chances are they didn't release the actual google code because studying it would have given too much information about Google's secret infrastructure, but they still put the ideas out there, which is the most important part.

More evidence of Google's "openness" :

http://venturebeat.com/2011/09/07/google-android-oracle-depositions

"Essentially, the key document reads that part of Google’s plan for Android, and how to profit from a free operating system, included the following:

Do not develop in the open. Instead, make source code available after innovation is complete.

Give early access to the software partners who build and distribute devices to our specification (i.e., Motorola and Verizon). They get non-contractual time to market advantage, and in return they align to our standard.
"

Title: Re: GOOGL - Google
Post by: Liberty on September 10, 2011, 11:03:27 AM
The talent seems to take the money are run and start companies that compete with Google:

Evan Williams - Sold blogger to Google and went on to found Twitter. Has refused offers to sell Twitter to Google
Dick Costolo - Sold Feedburner to Google, now leads Twitter, competing with Google
Denis Crowley - Sold Dodgeball, complained about how he couldn't get anything done at Google, left to found Foursquare
Mac Levchin - Sold Slide to Google and quit/pushed out soon after.

These guys use the credibility and the money gained from the acquisition to found the new companies.

That's to be expected. Google has 26k employees, many of them with a strong startup/entrepreneur bent, so a % are bound to leave after a while. Same thing happened to MSFT and AAPL and others.
Title: Re: GOOGL - Google
Post by: Liberty on September 10, 2011, 11:09:30 AM
More evidence of Google's "openness" :

http://venturebeat.com/2011/09/07/google-android-oracle-depositions

"Essentially, the key document reads that part of Google’s plan for Android, and how to profit from a free operating system, included the following:

Do not develop in the open. Instead, make source code available after innovation is complete.

Give early access to the software partners who build and distribute devices to our specification (i.e., Motorola and Verizon). They get non-contractual time to market advantage, and in return they align to our standard.
"

This is very personal for you, isn't it? you seem to be trying very hard.

What's the alternative? Have code repositories that are public and updated in real-time so that as you start working on a new feature, the whole world - and especially your competitors - can look over your shoulder and try to implement it in parallel (or faster), meaning that you are basically never ever able to take the lead on anything.

Smartphone OSes are a very competitive industry and so a certain level of openness will make more sense than with other types of software. What's the point of being all 'real-time open' if it hurts Android and by extent all the Android partners? Better to build in some delay in the process so that those who want to look under the hood can, but as long as they aren't competitors trying to beat you to the punch and benefit from your innovation.

Google isn't trying to start a religion, they're running a business, and so this means making pragmatic tradeoffs. I hope I'm not telling you anything you don't already know. But if you are hitting on google for not being open enough, you should be hitting much harder on Apple and Microsoft and RIM...
Title: Re: GOOGL - Google
Post by: valueInv on September 13, 2011, 01:27:39 PM
Ah, the gift that keeps on giving:

http://news.cnet.com/8301-30685_3-20105325-264/googles-post-javascript-web-plan-raises-hackles/?part=rss&subj=news&tag=2547-1_3-0-20

I have no problem with companies being closed. However, I do have a problem with closed companies pretending to be open.

If you want to see a successful business that is run in an open manner, take a look at Redhat. They do all the the things you mentioned and make money while being the market leader.
Title: Re: GOOGL - Google
Post by: valueInv on September 13, 2011, 01:28:39 PM
Google continues to lose search marketshare to Bing:

http://www.computerworld.com/s/article/9219975/Google_slips_to_lowest_search_share_in_2_years
Title: Re: GOOGL - Google
Post by: jeffmori7 on September 13, 2011, 02:25:31 PM
I'm not worried. I think it's healthy that Google has some competition in search. And the winner in all of this is the consumer, similar to the web browser battle.
Title: Re: GOOGL - Google
Post by: VAL9000 on September 13, 2011, 03:19:52 PM
I think it's fairly typical of Google to lose search share in the summer and regain it during the school year.  I can't remember where I came across this search seasonality (maybe it was here).  The explanation seemed plausible enough; Google is used more for research by students and therefore tapers off in the academic off-season.

Google's search share is extremely important.  My belief is that due to the AdWords auctioning system, linear increases in search share result in greater-than-linear increases in profit.  e.g. the 60-65% block of market share generates less profit than the 65-70% block of market share.  That's more of a guess/intuition.

I mentioned before that I was long GOOG but I sold out of my position not too long ago.  My reasoning is that I am unconvinced that Google's management will invest in a way that builds shareholder value.  The Motorola purchase was a real jaw dropper for me.  Other than for the patents, I'm not sure I've seen any convincing argument as to why this is a good acquisition.  I see value in other initiatives (Android, Google Wallet), but their ability to generate any economic profit outside of search is pretty lame.  I'll give them credit for trying, but I'm not sure I've seen what I can call a successful product track record, and track records are important to us outsiders.

The other risk is search itself.  Microsoft has shown that they can build an effective and useful search engine as well as innovate in areas that Google hadn't.  Next they will move on to improving their advertising capabilities.  Microsoft is showing that Google is no longer infallible in this area.  This raises the risk level by quite a bit for Google shareholders. 

Full disclosure, I continue to be long MSFT.

Title: Re: GOOGL - Google
Post by: Liberty on September 13, 2011, 03:54:30 PM
Marketshare isn't everything. The quality of users matter. As I've previously written about here, Bing seems to have a large number of users that end up doing a search because they made a typo in IE or something like that. If you look at the traffic statistics of many big websites, you see that Google actually has a much higher share than 60-70% (and even moreso internationally). This is important because random typo users aren't worth much, while people actively searching for something specific are worth a lot to advertisers, as these are the people clicking on ads and doing multiple searches. It also matters that Google's ad system is the best in the world and squeezes much more money out of users and advertisers.

In any case, I sold my GOOG shares when the markets melted because I wanted to buy something that I felt was more undervalued and has more upside (size is an anchor - I ended up buying stock in a company that is less than 1% Google's size).

I still made over 20% profit in a little over a month, and I could have made 30% if I had sold a bit earlier, so I can't say I'm disappointed. Despite having sold, I still believe they are a very attractive business and if bought cheaply enough they should provide attractive returns over the next decade. I'd look at them and Apple before MSFT, HPQ, DELL, etc.
Title: Re: GOOGL - Google
Post by: VAL9000 on September 13, 2011, 04:54:34 PM
Yes, I'm sure the consistent rise in search share that Bing has seen over the past two years has been the result of ever more users lobbing typos into IE. :)

It's pretty hard to slice up quality of searches that way.  You could just as easily point to super users clicking on ads less often while searching, therefore being less desirable users.  Who knows, maybe Bing is capturing the best possible market: users with low expectations who readily click on ads and have low search volume.  Genius.

Note that "big websites" might not be the best source of information.  Search's killer app is instant access to the long tail of information, not just as a short cut to Wikipedia.

I can't find a better set of metrics than search share to measure relative performance.  Do you have anything handy that might be better?
Title: Re: GOOGL - Google
Post by: Shane on September 13, 2011, 05:59:28 PM
I think it's fairly typical of Google to lose search share in the summer and regain it during the school year.  I can't remember where I came across this search seasonality (maybe it was here).  The explanation seemed plausible enough; Google is used more for research by students and therefore tapers off in the academic off-season.



As a college student I don't really see this as solid reasoning.  Even if younger people are using google there are no switching costs to going over to Bing.  I find the two search engines equivalent & alternate between the two now.

I just can't see any real competitive advantage other than user preference, and that can change rapidly.
Title: Re: GOOGL - Google
Post by: Liberty on September 13, 2011, 06:25:02 PM
Oh boy, I probably shouldn't have written anything. Every time I make any comment about Google people challenge me to a duel in front of the saloon, nobody ever agrees with anything I write :D

Yes, I'm sure the consistent rise in search share that Bing has seen over the past two years has been the result of ever more users lobbing typos into IE. :)

It's entirely possible for Bing to grow while having a larger % of 'low quality' users than Google. These are not mutually exclusive.

Quote
It's pretty hard to slice up quality of searches that way.  You could just as easily point to super users clicking on ads less often while searching, therefore being less desirable users.  Who knows, maybe Bing is capturing the best possible market: users with low expectations who readily click on ads and have low search volume.  Genius.

When search ads are well targeted, they are actually useful, so the paradigm of stupid newbie users mistakenly clicking on ads leading to higher revenue doesn't quite apply as well (that was more a banner ad thing - but now even banners are more targeted and relevant). If I search for a standing desk or a pizza place and the top result looks relevant and it happens to be an ads, I won't mind clicking on it even if I'm a savvy power-user.

Because Google's ad inventory is so freakingly much bigger than Bing's, they have many more relevant ads to show for a much longer tail of searches, thus monetizing their searches much better.

Quote
Note that "big websites" might not be the best source of information.  Search's killer app is instant access to the long tail of information, not just as a short cut to Wikipedia.

I can't find a better set of metrics than search share to measure relative performance.  Do you have anything handy that might be better?

Through my work I have access to stats from all kinds of sites, from thousands of visits a month to tens of millions. It covers a pretty nice range and should be pretty representative. I'm not asking you to trust me or change your metrics, do whatever you want. I'm just saying that I take the usual marketshare numbers with a big bucket of salt, and I've explained many times in multiple discussion threads why that is. I don't really have anything to add on this.
Title: Re: GOOGL - Google
Post by: jeffmori7 on September 13, 2011, 06:49:27 PM
Details about the Motorola deal. It seems that it was at first a patent deal, and the the first offer by Google was like 25% less than the final offer.

http://dealbook.nytimes.com/2011/09/13/how-the-google-motorola-deal-went-down/?partner=yahoofinance


I'm still not sure about this takeover, because as some of you pointed out, Google has never demonstrate its ability to develop clearly profitable business apart for search. At least, we can not say they are not trying!
Title: Re: GOOGL - Google
Post by: VAL9000 on September 13, 2011, 07:21:44 PM
It's entirely possible for Bing to grow while having a larger % of 'low quality' users than Google. These are not mutually exclusive.
Yes, but it's highly improbable that Bing grows solely on the basis of "low quality" users.  I think it's fair to say that neither of us really know what the user mix looks like with Google, Bing or others.  We don't know the mix, nor do we know what makes a user desirable or undesirable.  We can guess that Bing is gaining market share by capturing the low quality end of the market, but I think that speculating such a thing would be a bit stupid, especially if you're thinking of investing in Google.  I would much rather look at Google's product and say "Once upon a time Google's search results were untouchable and now that is no longer true.  How does this change things?"

It pays to examine the environment wherein Google came to be the search leader.  Search was a wasteland for the longest time.  It was nearly useless until Google came along.  Google blew away the competition for years and eventually paired it with an incredible business model.  But every good business ultimately attracts competitors, and that's where we're at today.  Maybe today we will discount the quality of their users and the dearth of advertising inventory, but I remember a time when iPhone was king and the same things were said of Android's low-market users and lack of app selection.
Title: Re: GOOGL - Google
Post by: Liberty on September 13, 2011, 07:23:02 PM
I'm still not sure about this takeover, because as some of you pointed out, Google has never demonstrate its ability to develop clearly profitable business apart for search.

The text and banner ads on the adsense/Doubleclick network are separate from search, as is GMail, as is Android, as is the nascent G+. These aren't as profitable as search - and it's probable that nothing ever will be, as search is the holy grail product of the internet, and so it makes sense to develop complementary products that augment search rather than totally separate ones - but if they were standalone tech companies they would be worth a nice sum, especially the ad network.
Title: Re: GOOGL - Google
Post by: Liberty on September 13, 2011, 07:29:25 PM
Yes, but it's highly improbable that Bing grows solely on the basis of "low quality" users.

Which isn't what I'm saying. F.ex. If Google has a ration of X 'low quality users' and Bing has  a 'more than X' ratio, it's possible for Bing to grow both high and low quality users in a roughly proportional manner such that the 'more than X' ratio stays pretty much intact, viz. higher than Google's.

Quote
  I think it's fair to say that neither of us really know what the user mix looks like with Google, Bing or others.  We don't know the mix, nor do we know what makes a user desirable or undesirable.  We can guess that Bing is gaining market share by capturing the low quality end of the market, but I think that speculating such a thing would be a bit stupid, especially if you're thinking of investing in Google.  I would much rather look at Google's product and say "Once upon a time Google's search results were untouchable and now that is no longer true.  How does this change things?"

It pays to examine the environment wherein Google came to be the search leader.  Search was a wasteland for the longest time.  It was nearly useless until Google came along.  Google blew away the competition for years and eventually paired it with an incredible business model.  But every good business ultimately attracts competitors, and that's where we're at today.  Maybe today we will discount the quality of their users and the dearth of advertising inventory, but I remember a time when iPhone was king and the same things were said of Android's low-market users and lack of app selection.

You are basically pushing my own argument farther than I am pushing it and then saying that I'm going too far. All I was saying was that marketshare numbers aren't all that to me, and that I use other sources of data to form my judgement on Google and Bing's respective competitive positions. I'm not saying they can't change, I'm not saying that Bing isn't making a better effort than past competitors (though Bing itself is just a continuation of Microsoft's past search efforts that have been around since the 90s, despite the rebranding and increased marketing). You can use the metrics and data you want, but please don't say that what I'm doing is stupid when you don't know what I'm doing.
Title: Re: GOOGL - Google
Post by: jeffmori7 on September 13, 2011, 07:39:45 PM
Ok Liberty, you're right :)

I know all of these, as I am a long-time shareholder, I just wrote a too simple sentence to summarize my thinking..and it didn't work out well :) 
Google is all about search and in a broader view about organizing all kind of data. Ads is the way to monetize this. All else is being build to reinforce search, to increase its efficiency and improve user experience. Motorola is to gain more traction in the mobile world, to boost Android, but at what price? Did they really need this?

Anyway, for me Motorola is different than all other Google products, at first just because it includes hardware and I'm still not sure about it!
Title: Re: GOOGL - Google
Post by: Liberty on September 13, 2011, 07:48:35 PM
No worries, sometimes I just have this compulsion to state the obvious :)

About Motorola: I'm not sure what to think about it. I suspect there's a behind the curtain story that explains it, like they couldn't get InterDigital or another patent holding shell, so they had to spend for a whole company.

I would prefer for Google to stick more to the software business, but if the patents help reinforce the moat around Google's other businesses (mobile will be a bigger part of search over the next decade, so defending it will become more and more core), they might pay for themselves + the rest of Moto over time (though probably not in the short-term). Problem is: It's always harder to value the absence of an event than the presence of one (ie. no lawsuit happens, but you might never know that in an alternate history it would have happened).
Title: Re: GOOGL - Google
Post by: Rabbitisrich on September 13, 2011, 07:53:07 PM
Google continues to lose search marketshare to Bing:

http://www.computerworld.com/s/article/9219975/Google_slips_to_lowest_search_share_in_2_years (http://www.computerworld.com/s/article/9219975/Google_slips_to_lowest_search_share_in_2_years)

It's a bit of a misleading article as Comscore adjusted their rankings to tease out contextual searches. Using the non-explicit core search figures, Google dipped below 64% last year.
Title: Re: GOOGL - Google
Post by: VAL9000 on September 13, 2011, 08:29:25 PM
Which isn't what I'm saying. F.ex. If Google has a ration of X 'low quality users' and Bing has  a 'more than X' ratio, it's possible for Bing to grow both high and low quality users in a roughly proportional manner such that the 'more than X' ratio stays pretty much intact, viz. higher than Google's.
Right, and getting back to the original point, Google is losing market share to Bing.  Since you agree that it's not solely low quality users, we can more specifically agree that Google is losing high quality users to Bing.  This, in my opinion, is a problem for Google.

You are basically pushing my own argument farther than I am pushing it and then saying that I'm going too far. All I was saying was that marketshare numbers aren't all that to me, and that I use other sources of data to form my judgement on Google and Bing's respective competitive positions. I'm not saying they can't change, I'm not saying that Bing isn't making a better effort than past competitors (though Bing itself is just a continuation of Microsoft's past search efforts that have been around since the 90s, despite the rebranding and increased marketing). You can use the metrics and data you want, but please don't say that what I'm doing is stupid when you don't know what I'm doing.
I didn't mean to imply that you were doing something stupid.  All I meant was that anyone who is investing in Google is doing themselves a disservice by assuming that Bing is only capturing the users  that Google would least want to retain.  It's safer to assume that Google is losing an average basket of users to Bing.

Since you have access to more data, would you mind sharing your answer to this question?  According to your methods, is Bing's share of search queries increasing or decreasing over a one year trend?
Title: Re: GOOGL - Google
Post by: Liberty on September 13, 2011, 08:59:21 PM
Quote
Right, and getting back to the original point, Google is losing market share to Bing.  Since you agree that it's not solely low quality users, we can more specifically agree that Google is losing high quality users to Bing.  This, in my opinion, is a problem for Google.

It is. I just don't think it's nearly as bad as some people think.

Frankly, I wrote many long posts about this in the past and I don't really want to rehash them. Maybe it was when you had left the board? Some of it is in this thread, some is in the MSFT thread, and possibly some in the RIM thread, if you're interested.

Quote
Since you have access to more data, would you mind sharing your answer to this question?  According to your methods, is Bing's share of search queries increasing or decreasing over a one year trend?

I've shared some of it, I'm sure you can find it. I don't want to go into too much detail there because that's not data I want to share too much for a variety of reasons.

Let's just say that when I look at the numbers for many big US sites (where Bing is stronger than internationally), sites that cover very mainstream topics and/or brands that everybody knows (where Google doesn't have an advantage over Bing), and see that Google often represents over 80% of search referrals and that some international Google sites (.ca, .co.uk) send more traffic than Bing.com, it makes me wonder where all the Bing users are linking off to after their searches...

There's also a nice phenomenon that I'm sure Munger would find interesting: The only place where I see much enthusiasm for Bing is on investing forums, mostly from people who have bought MSFT stock :) I don't know a single person who 'bings' stuff when they have a question they want answered... I know they exist, I've just yet to meet them (I suppose this is the cue for people here to tell my how their whole families have been converted to Bing and they love it and such... But I'm still waiting to meet Bing users by accident, without this kind of sample bias).
Title: Re: GOOGL - Google
Post by: VAL9000 on September 14, 2011, 04:09:28 AM
It is. I just don't think it's nearly as bad as some people think.

Frankly, I wrote many long posts about this in the past and I don't really want to rehash them. Maybe it was when you had left the board? Some of it is in this thread, some is in the MSFT thread, and possibly some in the RIM thread, if you're interested.
I stayed up to date, but remain unconvinced.

I think that anybody investing in MSFT thinking that Bing is going to be a significant business is delusional.  I have defended Bing's existence as a pure strategy play for MSFT to keep GOOG busy (you can read my posts on that).  There's a really good chance that it won't be anything more than a distraction for both companies.  I also think that people investing in GOOG thinking that their moat is so significant are in denial, because the evidence (however marginalized by arguments on user quality or lack of international presence) still strongly suggests that Google can be beat and has been beat by at least a few significant measures.
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 08:29:41 AM
I think that anybody investing in MSFT thinking that Bing is going to be a significant business is delusional.  I have defended Bing's existence as a pure strategy play for MSFT to keep GOOG busy (you can read my posts on that).  There's a really good chance that it won't be anything more than a distraction for both companies.  I also think that people investing in GOOG thinking that their moat is so significant are in denial, because the evidence (however marginalized by arguments on user quality or lack of international presence) still strongly suggests that Google can be beat and has been beat by at least a few significant measures.

So if Bing will remain marginal (if even profitable), who's going to beat Google? You realize that to offer something comparable to them will require billions and billions of capital investments and thousands of top engineers with expertise in search/artificial intelligence/data mining/large scale hardware deployments? And even if you have all that, the size of the user data-set that you can to play with matters (Google optimizes results in part by analyzing user behavior - the more users you have, the more accurate your results can be). And they're the low cost producer of computing hardware in the world as far as anyone knows (they actually assemble more servers than HP and Dell, according to Steven Levy who had inside access), own tons of strategic fiber that they bought for cents on the dollar after the dotcom bust, etc. Their ad exchanges benefit tremendously from a network effect and have great pricing power.  And I won't even mention how powerful the brand is (it's a verb!) and how users are becoming stickier by the year (6 years ago people mostly  just searched, but now they have a GMail account, use google maps, read google news, use google docs, G+, Android, chrome, google translate, they just launched Google Flights (http://www.google.com/flights/), etc, making them less likely to go away).

Basically, Google's out of reach for startups (most aim to be acquired by Google anyway), and of the big companies with the resources, I don't see any who have the ability to beat it, and it's not because they haven't tried (MSFT likes to pretend Bing is a few years old, but it's just a rebranding of what they've been doing unprofitably for over a decade). Anyone who makes their living on the internet, either as an advertiser or a publisher, knows very well that Bing is a marginal player at best. They're not nothing, but like Yahoo, if they disappeared tomorrow, you would probably notice the bump in traffic, while if Google disappeared, you'd go out of business (doubly so if you ran their ads on your site on top of getting most of your traffic from them). In fact, a change in Google's ranking algorithm can have a bigger impact on a site's traffic than the whole existence of Google's competitors.

As an aside, I think it's also a sign of Google's moat that Bing was caught copying Google results (Google made up fake search results for random unique non-words like "hhhhshhdfiidsfjfkfkfffsdffffftss" and these later showed up in Bing linking to the very same fake results -- Bing responded that they didn't copy anything ever, but their explanation for the results was unconvincing). It's like finding out that Washington Post articles that you thought were independently reported, and were advertised as such, were actually plagiarized from the New York Times. Kind of a sign they're having trouble compete, IMO.

I'd be curious to ask Sanjeev if around 35% of visitors to this site who come from search referral come from Bing sources (and if that's the case, I'll be very surprised)...
Title: Re: GOOGL - Google
Post by: valueInv on September 14, 2011, 08:43:30 AM
Marketshare isn't everything. The quality of users matter. As I've previously written about here, Bing seems to have a large number of users that end up doing a search because they made a typo in IE or something like that. If you look at the traffic statistics of many big websites, you see that Google actually has a much higher share than 60-70% (and even moreso internationally). This is important because random typo users aren't worth much, while people actively searching for something specific are worth a lot to advertisers, as these are the people clicking on ads and doing multiple searches. It also matters that Google's ad system is the best in the world and squeezes much more money out of users and advertisers.

In any case, I sold my GOOG shares when the markets melted because I wanted to buy something that I felt was more undervalued and has more upside (size is an anchor - I ended up buying stock in a company that is less than 1% Google's size).

I still made over 20% profit in a little over a month, and I could have made 30% if I had sold a bit earlier, so I can't say I'm disappointed. Despite having sold, I still believe they are a very attractive business and if bought cheaply enough they should provide attractive returns over the next decade. I'd look at them and Apple before MSFT, HPQ, DELL, etc.

 - What makes you think Google has better quality of users?
 - Do you know the demographics of the users coming to these sites?
  -Do you know the average click thru rate of a Bing user vs a Google user?
  - How do you know that the Bing referees are from typos in the browser? How much of Googles users are from typos in Chrome given that Chrome is increasing marketshare?
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 09:01:24 AM
Allow me to reply in the same way that you did :)

- What makes you think Google has better quality of users?

-A wide range of data points.

 
Quote
- Do you know the demographics of the users coming to these sites?

-I do. They cover a wide range.

 
Quote
-Do you know the average click thru rate of a Bing user vs a Google user?

I've seen that in the past, and like the comscore data, I think it is misleading, and I think many people draw the wrong conclusions from it. For example, consider that Google's snippets are extremely relevant and many people find the answer they're looking for from them without clicking, or use Google as a spellchecker or calculator.  At first glance this makes it sound like low quality users, yet despite that Google still sends massively more traffic than its comscore share would make you think. It makes me think that CTR rates are a flawed metric; f.ex., if you mispell 'facebook' in your IE URL bar and then click on the Facebook result, that's considered a successful hit, while if you search for Galileo's birth date and see it in the snippet without clicking, that considered a failed search. Also, power-users (or even just above-casual users) will tend to do tons of searches and refine them over iterations of many keywords (mostly because they're looking for harder-to-find things) while casual users usually just try one thing. Does this lower CTR from power users mean that results are of lower quality? CTR doesn't mean what most people think it means...

Quote
  - How do you know that the Bing referees are from typos in the browser? How much of Googles users are from typos in Chrome given that Chrome is increasing marketshare?

I'm sure Chrome also sends a bunch. But IE is the most popular browser in the world, and it can have a disproportionate effect on a search engine with a smaller market share, as opposed to the impact of one of the browsers with a smaller marketshare on the search engine with the biggest market share (in the abstract: a big thing can have a bigger impact on a small thing than a small thing on a big thing).
Title: Re: GOOGL - Google
Post by: VAL9000 on September 14, 2011, 09:57:11 AM
So if Bing will remain marginal (if even profitable), who's going to beat Google? You realize that to offer something comparable to them will require billions and billions of capital investments and thousands of top engineers with expertise in search/artificial intelligence/data mining/large scale hardware deployments? And even if you have all that, the size of the user data-set that you can to play with matters (Google optimizes results in part by analyzing user behavior - the more users you have, the more accurate your results can be). And they're the low cost producer of computing hardware in the world as far as anyone knows (they actually assemble more servers than HP and Dell, according to Steven Levy who had inside access), own tons of strategic fiber that they bought for cents on the dollar after the dotcom bust, etc. Their ad exchanges benefit tremendously from a network effect and have great pricing power.  And I won't even mention how powerful the brand is (it's a verb!) and how users are becoming stickier by the year (6 years ago people mostly  just searched, but now they have a GMail account, use google maps, read google news, use google docs, G+, Android, chrome, google translate, they just launched Google Flights (http://www.google.com/flights/), etc, making them less likely to go away).
If I could answer that question with absolute confidence, I wouldn't be here right now :)  I think there's a healthy dose of competition out there, including Bing, Bai Du, and DuckDuckGo.   I've used Bing and DDG extensively and they're both worthy.  DDG is interesting because they are a tiny start-up but still manage to provide very high quality results.  On top of that, they don't filter your results based on user data, which can reinforce bias.  Here's some information on search bubbles: http://dontbubble.us/ -- I think that they are an excellent counter example to the idea that a start-up can't compete with Google.

At least you could admit that the thing that put Google in the lead, remarkably better search results, is no longer a trait unique to Google.  All of the additional services and products that you mentioned are essential to Google retaining its users, but in the end the effectiveness of these attempts will be measured by one simple metric: search share.  Search share is at best stagnating and possibly declining even as products like maps, gmail, translate, android, and chrome are widely being adopted.  Doesn't this search share data combined with the massive investment in user retention indicate something isn't working as expected in Mountain View?

These arguments really only cover the search / AdWords business.  The display business is a completely different animal and has its own set of ambitious competitors.  I think Facebook and possibly Twitter have the best shot at unseating Google in this arena.  If Google's kingdom is Troy, those  "like this" and "tweet this" buttons are Trojan horses.

Also, for what it's worth, I found Steven Levy's book In The Plex to be unnecessarily sycophantic.  I recommend reserving some of your search stat salt bucket for digesting his opinions :) (It wasn't always like that with Levy..  His book Hackers was awesome - balanced and informative.)
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 10:11:37 AM
http://www.zdnet.co.uk/news/processors/2011/09/14/intel-and-google-join-hands-on-android-development-40093922/
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 11:13:06 AM
I like DDG. I've had a few conversations with Gabriel Weinberg, its creator, and I've used it as my main search engine for a few months to test it out. I expect them to be successful as a niche player mostly because they'll keep costs low (1-2 employees) and so will do well even with very little revenue, but I don't expect them to be a competitor for Google (or even Bing, who's API they use exclusively now that Yahoo's API is offline - DDG isn't really an independent player, it's more like an App built on top of Bing). Sadly, a lot of what DDG does wouldn't scale very well (like hand filtering lots of spam - when you're a big source of traffic, that stuff becomes extremely contentious in borderline cases).

I don't expect Twitter to do much in display. Their firehose is valuable, and they should do well with it, but it's still just one of many things (and I say this as a guy who has 7k followers on Twitter).

Facebook will no doubt make mountains of money with display, but their offerings are limited. They're only selling ads on Facebook, and when people are on facebook they are generally in a certain mindset, just like when people are in their email. Adsense ads on third party sites have a higher chance of catching people when they are in a mindset that is more valuable to advertisers. F.ex. you Google something about cars, end up on a NYT article about cars and there's an adsense ad about cars. The page that you are reading (something about cars) is a signal of your intent, you aren't thinking about diner with your grandma on sunday or funny cat pics like on social networks.

Please provide examples of what you didn't like in Levy's book. I'm not saying it's perfect, but I'm curious to know what you didn't like.
Title: Re: GOOGL - Google
Post by: VAL9000 on September 14, 2011, 12:16:32 PM
I like DDG. I've had a few conversations with Gabriel Weinberg, its creator, and I've used it as my main search engine for a few months to test it out. I expect them to be successful as a niche player mostly because they'll keep costs low (1-2 employees) and so will do well even with very little revenue, but I don't expect them to be a competitor for Google (or even Bing, who's API they use exclusively now that Yahoo's API is offline - DDG isn't really an independent player, it's more like an App built on top of Bing). Sadly, a lot of what DDG does wouldn't scale very well (like hand filtering lots of spam - when you're a big source of traffic, that stuff becomes extremely contentious in borderline cases).
They also have their own crawler, so it's not like this is a completely dependent solution, either.  It's remarkable what they have been able to accomplish with so little.  Blekko is another venture-backed search engine.  This isn't about DDG toppling Google, I'm just debunking the idea that nobody can do it on the cheap and that nobody is close.

What about the question regarding results?

I don't expect Twitter to do much in display. Their firehose is valuable, and they should do well with it, but it's still just one of many things (and I say this as a guy who has 7k followers on Twitter).

Facebook will no doubt make mountains of money with display, but their offerings are limited. They're only selling ads on Facebook, and when people are on facebook they are generally in a certain mindset, just like when people are in their email. Adsense ads on third party sites have a higher chance of catching people when they are in a mindset that is more valuable to advertisers. F.ex. you Google something about cars, end up on a NYT article about cars and there's an adsense ad about cars. The page that you are reading (something about cars) is a signal of your intent, you aren't thinking about diner with your grandma on sunday or funny cat pics like on social networks.
Inside today, outside tomorrow.  Google+ is going to attempt the same thing, but they already have AdSense.  Facebook has much better demographic data, but no ad network.  Twitter can do something similar, although they would have to use more implied demography from their firehose.  It's a better starting point than what AdSense has today (unlike search, display can't easily infer a user's intention from the content on the page).

Please provide examples of what you didn't like in Levy's book. I'm not saying it's perfect, but I'm curious to know what you didn't like.

Sure.  On toxic emission tests:
Quote
“It was, like, .0001 parts per billion,” says Salah of the report he handed to Page. “Larry looked at it, handed it back and said, ‘Can we get this to zero?’” Google wound up building superpowerful fans to power a high-end filtration system. It made for a higher electric bill, but the air quality met Sergey and Larry’s standards. “They’re two very sensitive people,” says Salah. “They smell things most of us don’t smell.”

Sorry what? Page can smell toxic emissions to .0001 parts per billion?  What is he, superman?  Sure this is an attributed quote, but what value does it add to the reader or the story?  This falsely aggrandizes Page for something completely irrelevant.  Google is the search company, not the smell company.

Well there's more of that:
On meeting Andy Rubin regarding an Android partnership:
Quote
Page had an idea: what if Google bought Android? It was a classic Larry Page moment: ask him to consider a toothpick, and right away, he was thinking about a forest.

Classic Page!  Partnership is to acquisition as toothpick is to forest.  This is laughable, especially in Silicon Valley where deals are on every entrepreneur's mind all the time.  This leap in vision is made every day by every winner and loser in California.

And here's another one on Page's ability to measure load times on web pages:
Quote
Page himself considered it unexceptional to be able to detect lags of 200 milliseconds, generally thought of as the limit of human perception.

That's because it is unexceptional.  Anybody who has played a video game knows that 200ms is an eternity.  Another example is film, which traditionally runs at 30 fps.  Why use 30fps if the limit of human perception is 5fps?  This assertion by the author is clearly false, and again serves to falsely build up Page's image rather than add actual value to the reader.

Levy paints this picture of Page being superhuman, and it really bleeds out in these examples.  How can you take the rest of the book seriously with the backdrop of this nonstop mancrush?  It's not a balanced review of Google, it's greatly influenced by one person's fawning over another.

The other issue I take is that In The Plex doesn't do any of Google's many failures any justice.  Only Book Search and Buzz get any play..  Everything else is sidestepped.  It's such a biased review that doesn't critique but often compliments.  I would expect more journalism from a guy who's a journalist.  Bring your salt bucket is what I'm saying.
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 12:52:58 PM
They also have their own crawler, so it's not like this is a completely dependent solution, either.  It's remarkable what they have been able to accomplish with so little.  Blekko is another venture-backed search engine.  This isn't about DDG toppling Google, I'm just debunking the idea that nobody can do it on the cheap and that nobody is close.

Indeed, but remove the Bing API and the billions that MSFT put into it and I suspect that things would be quite different. Still, I have only respect for DDG. I'm less impressed by Blekko.

One that does (did?) all its own crawling is GigaBlast, but it's about on par with Google circa 1998-1999.

Quote
What about the question regarding results?

DDG is my second favorite search engine after Google, so that should tell you that I think they are overall pretty good. There's still a significant gap, though.

Quote
Inside today, outside tomorrow.  Google+ is going to attempt the same thing, but they already have AdSense.  Facebook has much better demographic data, but no ad network.  Twitter can do something similar, although they would have to use more implied demography from their firehose.  It's a better starting point than what AdSense has today (unlike search, display can't easily infer a user's intention from the content on the page).

We'll see how that works out. Adsense isn't as easy to build as it might seem, and replicating or stealing Google's hundreds of thousands of third party publishers won't be easy.

Also, Google's core competencies map much better on this than Facebook's ie. indexing vast quantities of data rapidly, analyzing it in real time to extract meaning and matching it to relevant queries/ads (a large number of which are unique, so you can't just cache it all) that are provided in real time in a search box/ad exchange... a lot of skills and infrastructure translates well from one to the other, and I'm afraid it'll be harder for Facebook. They could pull it off, though.


Quote
Sure.  On toxic emission tests:
Quote
“It was, like, .0001 parts per billion,” says Salah of the report he handed to Page. “Larry looked at it, handed it back and said, ‘Can we get this to zero?’” Google wound up building superpowerful fans to power a high-end filtration system. It made for a higher electric bill, but the air quality met Sergey and Larry’s standards. “They’re two very sensitive people,” says Salah. “They smell things most of us don’t smell.”

Sorry what? Page can smell toxic emissions to .0001 parts per billion?  What is he, superman?  Sure this is an attributed quote, but what value does it add to the reader or the story?  This falsely aggrandizes Page for something completely irrelevant.  Google is the search company, not the smell company.

Well there's more of that:
On meeting Andy Rubin regarding an Android partnership:
Quote
Page had an idea: what if Google bought Android? It was a classic Larry Page moment: ask him to consider a toothpick, and right away, he was thinking about a forest.

Classic Page!  Partnership is to acquisition as toothpick is to forest.  This is laughable, especially in Silicon Valley where deals are on every entrepreneur's mind all the time.  This leap in vision is made every day by every winner and loser in California.

And here's another one on Page's ability to measure load times on web pages:
Quote
Page himself considered it unexceptional to be able to detect lags of 200 milliseconds, generally thought of as the limit of human perception.

That's because it is unexceptional.  Anybody who has played a video game knows that 200ms is an eternity.  Another example is film, which traditionally runs at 30 fps.  Why use 30fps if the limit of human perception is 5fps?  This assertion by the author is clearly false, and again serves to falsely build up Page's image rather than add actual value to the reader.

Levy paints this picture of Page being superhuman, and it really bleeds out in these examples.  How can you take the rest of the book seriously with the backdrop of this nonstop mancrush?  It's not a balanced review of Google, it's greatly influenced by one person's fawning over another.

The other issue I take is that In The Plex doesn't do any of Google's many failures any justice.  Only Book Search and Buzz get any play..  Everything else is sidestepped.  It's such a biased review that doesn't critique but often compliments.  I would expect more journalism from a guy who's a journalist.  Bring your salt bucket is what I'm saying.
[/quote]

If those are your criticisms, then fine. I thought it was going to be things that mattered or at least were more blatant and not the kinds of complaints that you can make - if you search for them - about just about any book about any individual or company. I'll bet you I open my biography of Benjamin Franklin by Walter Isaacson at any chapter and I can find the same kinds of complaints. I guess it would matter if I didn't have any judgement and took everything literally, but I'm just as capable as you to take some things with a grain of salt -- it doesn't mean that there's isn't a lot of very insightful stuff in Levy's book, much of it is corroborated in other books and articles written by other people.

btw, if I remember correctly, your last quote about lag says something slightly different in context.  Page had trained himself to estimate sub-second lag to a fairly accurate degree (not just notice that there's lag, which is unexceptional), which isn't something that everybody does and certainly something that could impress a journalist if performed out of the blue. It's not material to Google's prospects, but it certainly gives us color on Larry Page and his engineering mindset.
Title: Re: GOOGL - Google
Post by: valueInv on September 14, 2011, 02:18:28 PM
Allow me to reply in the same way that you did :)

 
Quote
-Do you know the average click thru rate of a Bing user vs a Google user?

I've seen that in the past, and like the comscore data, I think it is misleading, and I think many people draw the wrong conclusions from it. For example, consider that Google's snippets are extremely relevant and many people find the answer they're looking for from them without clicking, or use Google as a spellchecker or calculator.  At first glance this makes it sound like low quality users, yet despite that Google still sends massively more traffic than its comscore share would make you think. It makes me think that CTR rates are a flawed metric; f.ex., if you mispell 'facebook' in your IE URL bar and then click on the Facebook result, that's considered a successful hit, while if you search for Galileo's birth date and see it in the snippet without clicking, that considered a failed search. Also, power-users (or even just above-casual users) will tend to do tons of searches and refine them over iterations of many keywords (mostly because they're looking for harder-to-find things) while casual users usually just try one thing. Does this lower CTR from power users mean that results are of lower quality? CTR doesn't mean what most people think it means...



I am talking about CTR for ads, not searches.
Search advertisers make money when users click on ads. When you have a user clicking a lot of ads, he is "high quality" from a search business point of view. A person who performs a lot of searches but does not click on ads adds to costs but does not bring in revenue. Hence, CTR is extremely relevant for a search business.

A phd from Harvard with an annual income of $250K who does not click on ads is not a "high quality" user while a guy working for hourly wage of $5 clicking lots of search ads is.
Title: Re: GOOGL - Google
Post by: VAL9000 on September 14, 2011, 04:07:42 PM
Well at least we can agree that somehow, someway there's real competition brewing for Google (the size and scope is still in contention).  It only took 36 hours and lots of text but by golly we did it.  We should replace the US government. :)

If those are your criticisms, then fine. I thought it was going to be things that mattered or at least were more blatant and not the kinds of complaints that you can make - if you search for them - about just about any book about any individual or company. I'll bet you I open my biography of Benjamin Franklin by Walter Isaacson at any chapter and I can find the same kinds of complaints. I guess it would matter if I didn't have any judgement and took everything literally, but I'm just as capable as you to take some things with a grain of salt -- it doesn't mean that there's isn't a lot of very insightful stuff in Levy's book, much of it is corroborated in other books and articles written by other people.
I wasn't really searching for them.  They jumped out at me and eventually I concluded that the book was a kiss ass bromance novel rather than an objective review of Google's development.  Really I'm trying to add balance to the discussion..  both in terms of that book and the discussion here.  Something else that jumped at out me is that things have gotten a little too Google positive (Google+ ?) around here.  I'm doing what I can to bring us into less exuberant territory.

btw, if I remember correctly, your last quote about lag says something slightly different in context.  Page had trained himself to estimate sub-second lag to a fairly accurate degree (not just notice that there's lag, which is unexceptional), which isn't something that everybody does and certainly something that could impress a journalist if performed out of the blue. It's not material to Google's prospects, but it certainly gives us color on Larry Page and his engineering mindset.
My criticism has never been about Page.  It's about Levy and how he talks up Page every chance he gets.  I think Page has real engineering talent and deserves merit for all kinds of things that Google has done (there is no mention of these praises in my critique of Levy).  I also think that Page deserves criticism for the misguided actions that he's taken and these criticisms are nowhere to be found in In The Plex.  The facts that are present are well researched and are interesting, but using In The Plex as a field guide for understanding Google's business and capabilities is probably not a good idea.
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 07:23:58 PM
I am talking about CTR for ads, not searches.

Sorry about the misunderstanding. It's bound to happen if you only write ambiguous short questions, though.

Quote
Search advertisers make money when users click on ads. When you have a user clicking a lot of ads, he is "high quality" from a search business point of view. A person who performs a lot of searches but does not click on ads adds to costs but does not bring in revenue. Hence, CTR is extremely relevant for a search business.

A phd from Harvard with an annual income of $250K who does not click on ads is not a "high quality" user while a guy working for hourly wage of $5 clicking lots of search ads is.

I'm very well aware of that, I know a lot more about ad CTR than about search CTR.

The value of users for search is the number of searches they do, what those searches are, and how often they click on ads.

Casual users who always search for the same 5 sites (facebook, new york times, hotmail, ESPN, whatever) are basically worthless, while power users who do 30 search a day for all kinds of things and do a lot of their shopping and product research online (including for keywords that trigger ads worth many dollars per click, because each keyword is worth something different based on a real-time auction, and some very specific keywords like 'mesothelioma' can be worth $50 per click or whatever) are worth the most. This is of course also a function of the ad inventory. The more variety you have, the more of the long tail you can monetize.

So to answer your original question, yeah, I know a few things about those.
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 07:37:22 PM
Well at least we can agree that somehow, someway there's real competition brewing for Google (the size and scope is still in contention).  It only took 36 hours and lots of text but by golly we did it.  We should replace the US government. :)

I've agreed with that from the start. I just think we disagree on how solid/fragile Google's competitive position is.

Quote
I wasn't really searching for them.  They jumped out at me and eventually I concluded that the book was a kiss ass bromance novel rather than an objective review of Google's development.  Really I'm trying to add balance to the discussion..  both in terms of that book and the discussion here.  Something else that jumped at out me is that things have gotten a little too Google positive (Google+ ?) around here.  I'm doing what I can to bring us into less exuberant territory.

Well, welcome to my world... A lot of what is written around here is negative about Google, probably because there are so many MSFT shareholders, so most of what I've been writing has been to provide counter-points to those too-enthusiastic posts ("OMG, Bing is totally kicking Google's ass, Microsoft is so great!" to paraphrase with tongue just slightly in cheek). Heh.

Quote
The facts that are present are well researched and are interesting, but using In The Plex as a field guide for understanding Google's business and capabilities is probably not a good idea.

Agreed. Who suggested that?

I suspect that when you do research, you read lots of different sources, and you filter out or mentally adjust some parts because they don't pass through your BS detector or because you know the bias of the source, but you keep other parts which seem reliable, and over time, it all adds up to an ever more precise picture of whatever you're studying, right? Well, you're not the only one who does that, so don't assume that I'm some dummy who gets snowed by the first book that comes along  ;)
Title: Re: GOOGL - Google
Post by: Liberty on September 14, 2011, 07:53:52 PM
More patents:

http://www.frontsidebus.net/2011/09/14/google-buys-1000-patents-from-ibm-to-defend-android/
Title: Re: GOOGL - Google
Post by: valueInv on September 14, 2011, 10:04:41 PM

The value of users for search is the number of searches they do, what those searches are, and how often they click on ads.

Casual users who always search for the same 5 sites (facebook, new york times, hotmail, ESPN, whatever) are basically worthless, while power users who do 30 search a day for all kinds of things and do a lot of their shopping and product research online (including for keywords that trigger ads worth many dollars per click, because each keyword is worth something different based on a real-time auction, and some very specific keywords like 'mesothelioma' can be worth $50 per click or whatever) are worth the most. This is of course also a function of the ad inventory. The more variety you have, the more of the long tail you can monetize.

So to answer your original question, yeah, I know a few things about those.

The cost of the user is related to the number of searches that the user does, not the value.
The value to Google is based on the number of ads they click on and the rate of those ads. Let's be clear.

So what are the average CTRs for Google and Bing? AFAIK, this is internal information that they don't divulge to their publishers. So how do you know their CTRs?
Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 08:23:50 AM
The cost of the user is related to the number of searches that the user does, not the value.
The value to Google is based on the number of ads they click on and the rate of those ads. Let's be clear.

So what are the average CTRs for Google and Bing? AFAIK, this is internal information that they don't divulge to their publishers. So how do you know their CTRs?

Are you playing a game of gotcha? I said I knew how ad CTR worked, not that I knew secret internal numbers for those two companies (and it wasn't clear in the first place that this was what you were asking).
Title: Re: GOOGL - Google
Post by: VAL9000 on September 15, 2011, 10:21:17 AM
Well, welcome to my world... A lot of what is written around here is negative about Google, probably because there are so many MSFT shareholders, so most of what I've been writing has been to provide counter-points to those too-enthusiastic posts ("OMG, Bing is totally kicking Google's ass, Microsoft is so great!" to paraphrase with tongue just slightly in cheek). Heh.
That's life with opinions.  For what it's worth, I reviewed all of the Bing posts and couldn't find anything that even closely matches the enthusiasm you're suggesting here.  As for the MSFT shareholder theories you like to bring up, very few of the participants on the MSFT or GOOG threads have declared themselves shareholders.  You must know something I don't.

I suspect that when you do research, you read lots of different sources, and you filter out or mentally adjust some parts because they don't pass through your BS detector or because you know the bias of the source, but you keep other parts which seem reliable, and over time, it all adds up to an ever more precise picture of whatever you're studying, right? Well, you're not the only one who does that, so don't assume that I'm some dummy who gets snowed by the first book that comes along  ;)
Hey dude, I gave fair play to your claim that the search share stats are incorrect, even though you won't offer solid data to back it up.  In return, I gave you concrete examples of bias from Levy's book.  The least you could do is acknowledge my concerns and opinion as being noteworthy rather than trying to trivialize my observations.
Title: Re: GOOGL - Google
Post by: valueInv on September 15, 2011, 10:42:51 AM
The cost of the user is related to the number of searches that the user does, not the value.
The value to Google is based on the number of ads they click on and the rate of those ads. Let's be clear.

So what are the average CTRs for Google and Bing? AFAIK, this is internal information that they don't divulge to their publishers. So how do you know their CTRs?

Are you playing a game of gotcha? I said I knew how ad CTR worked, not that I knew secret internal numbers for those two companies (and it wasn't clear in the first place that this was what you were asking).

Given you statement "The value of users for search is the number of searches they do", it was not clear you understood how CTR meant. Again, value => CTR, cost => no of searches, not the other way round.

BTW, I wasn't being unclear about whether CTR related to searches or ads. When people in the industry talk about CTR, they generally mean ads, not searches:

http://en.wikipedia.org/wiki/Click-through_rate

Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 10:45:53 AM
That's life with opinions.  For what it's worth, I reviewed all of the Bing posts and couldn't find anything that even closely matches the enthusiasm you're suggesting here.  As for the MSFT shareholder theories you like to bring up, very few of the participants on the MSFT or GOOG threads have declared themselves shareholders.  You must know something I don't.

Well, you're a better man than I, because I won't go through the archives to find examples of what I meant. This discussion is way past being constructive.

Quote
Hey dude, I gave fair play to your claim that the search share stats are incorrect, even though you won't offer solid data to back it up.  In return, I gave you concrete examples of bias from Levy's book.  The least you could do is acknowledge my concerns and opinion as being noteworthy rather than trying to trivialize my observations.

Right back at you. I heard your arguments and nothing you've said has convinced me that Google has anything else other than a great moat and solid dominance of the search market, and I've already explained why your examples of bias in Levy's book don't have anything to do with my arguments because I'm just as capable as you to detect that bias and I'm not basing my positions on Levy's view of Page as a superhero or whatever. And btw, I provided numbers in the past and pointed you to them.
Title: Re: GOOGL - Google
Post by: valueInv on September 15, 2011, 10:47:08 AM
Well, welcome to my world... A lot of what is written around here is negative about Google, probably because there are so many MSFT shareholders, so most of what I've been writing has been to provide counter-points to those too-enthusiastic posts ("OMG, Bing is totally kicking Google's ass, Microsoft is so great!" to paraphrase with tongue just slightly in cheek). Heh.

Ironically, thats the same reason I started posting on this threads. Because every time a positive article or a positive piece of news came out about Google, it was posted here. But none of the downside or negative articles were posted. So I decided to balance it out with counterpoints to your posts ;D ;D ;D

Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 10:49:24 AM
Given you statement "The value of users for search is the number of searches they do", it was not clear you understood how CTR meant. Again, value => CTR, cost => no of searches, not the other way round.

I was explaining the variables important to valuing a search user, not what CTR is. You can measure things in absolute numbers, or in relative numbers, and when doing the latter, search volume matters.

Quote
BTW, I wasn't being unclear about whether CTR related to searches or ads. When people in the industry talk about CTR, they generally mean ads, not searches:

http://en.wikipedia.org/wiki/Click-through_rate

In the context of talking about search engines and bing vs google, I thought you were talking about some of the articles that came out about how bing users had a higher CTR than google. CTR is used one way in the advertising industry, but it is also a generic term that can apply to many other things. It was ambiguous.
Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 10:49:43 AM
Well, welcome to my world... A lot of what is written around here is negative about Google, probably because there are so many MSFT shareholders, so most of what I've been writing has been to provide counter-points to those too-enthusiastic posts ("OMG, Bing is totally kicking Google's ass, Microsoft is so great!" to paraphrase with tongue just slightly in cheek). Heh.

Ironically, thats the same reason I started posting on this threads. Because every time a positive article or a positive piece of news came out about Google, it was posted here. But none of the downside or negative articles were posted. So I decided to balance it out with counterpoints to your posts ;D ;D ;D

Well, ain't we all dogs chasing their tail.  :)
Title: Re: GOOGL - Google
Post by: misterstockwell on September 15, 2011, 12:18:16 PM
More patents:

http://www.frontsidebus.net/2011/09/14/google-buys-1000-patents-from-ibm-to-defend-android/

More unflattering pieces about Google and patents

http://fosspatents.blogspot.com/
Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 12:39:30 PM
I think it's very probable that Google infringes on that patent, and many others. In fact, the software patent system is so fucked up that if the law was 100% enforced by some omniscient deity, the whole software industry would entirely shut down, and writing a "hello world" program would take years because you'd have to go through tens of thousands of patents written in incomprehensible legalese covering all kinds of broad and obvious things to make sure you aren't infringing anything. And every time you go to court it's a dice roll because the courts aren't exactly equipped to understand the fine points of software engineering, and even when you win, the delays and legal fees can still make it a huge business loss...

It reminds me of something someone wrote on a forum for startup programmers iirc (I'm paraphrasing from memory):

So it's a small startup just starting to make some money, and one day they get visited by 2 guys in suits coming from IBM, and they say "you are infringing on 7 our of our patents. We'll license them to you for 6 million." So the startup guys take this very seriously and they examine the patents carefully. They come back and say: "6 of those have nothing to do with what we're doing and the last one seems bogus and wouldn't hold in court". The guys in suit yawn and go: "We have 20,000 patents. Do you really want us to go back to headquarters and find 7 other patents that you infringe? Or do you want to go to court and fight our legal department? Make out the check to..."

Basically extortion. Google is much more vulnerable because they are a lot younger than most other big tech companies their size, and because they haven't put their engineers on the patent-generating treadmill like some other firms (some firms expressly tell employees that every time they come up with a patentable idea, they have to call the patent lawyers, and they give out big bonuses for patents, etc. I've heard from people who have software patents and they say that their own patents are bogus). But with the recent patent acquisitions, they should soon have a big enough stockpile for mutually-assured destruction, and a new equilibrium should be reached with other big tech firms.

There was a great episode of This American Life about it.

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack
Title: Re: GOOGL - Google
Post by: valueInv on September 15, 2011, 02:38:47 PM
I think it's very probable that Google infringes on that patent, and many others. In fact, the software patent system is so fucked up that if the law was 100% enforced by some omniscient deity, the whole software industry would entirely shut down, and writing a "hello world" program would take years because you'd have to go through tens of thousands of patents written in incomprehensible legalese covering all kinds of broad and obvious things to make sure you aren't infringing anything. And every time you go to court it's a dice roll because the courts aren't exactly equipped to understand the fine points of software engineering, and even when you win, the delays and legal fees can still make it a huge business loss...

It reminds me of something someone wrote on a forum for startup programmers iirc (I'm paraphrasing from memory):

So it's a small startup just starting to make some money, and one day they get visited by 2 guys in suits coming from IBM, and they say "you are infringing on 7 our of our patents. We'll license them to you for 6 million." So the startup guys take this very seriously and they examine the patents carefully. They come back and say: "6 of those have nothing to do with what we're doing and the last one seems bogus and wouldn't hold in court". The guys in suit yawn and go: "We have 20,000 patents. Do you really want us to go back to headquarters and find 7 other patents that you infringe? Or do you want to go to court and fight our legal department? Make out the check to..."

Basically extortion. Google is much more vulnerable because they are a lot younger than most other big tech companies their size, and because they haven't put their engineers on the patent-generating treadmill like some other firms (some firms expressly tell employees that every time they come up with a patentable idea, they have to call the patent lawyers, and they give out big bonuses for patents, etc. I've heard from people who have software patents and they say that their own patents are bogus). But with the recent patent acquisitions, they should soon have a big enough stockpile for mutually-assured destruction, and a new equilibrium should be reached with other big tech firms.

There was a great episode of This American Life about it.

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

I have little sympathy for Google being sued. Check out the Android phones:

http://random.andrewwarner.com/what-googles-android-looked-like-before-and-after-the-launch-of-iphone/

The first one was shown when RIM was the reigning king of smartphones. If Apple hadn't entered the smartphone industry, it would have been RIM suing Google.
Title: Re: GOOGL - Google
Post by: valueInv on September 15, 2011, 02:42:23 PM
Given you statement "The value of users for search is the number of searches they do", it was not clear you understood how CTR meant. Again, value => CTR, cost => no of searches, not the other way round.

I was explaining the variables important to valuing a search user, not what CTR is. You can measure things in absolute numbers, or in relative numbers, and when doing the latter, search volume matters.

Quote
BTW, I wasn't being unclear about whether CTR related to searches or ads. When people in the industry talk about CTR, they generally mean ads, not searches:

http://en.wikipedia.org/wiki/Click-through_rate

In the context of talking about search engines and bing vs google, I thought you were talking about some of the articles that came out about how bing users had a higher CTR than google. CTR is used one way in the advertising industry, but it is also a generic term that can apply to many other things. It was ambiguous.

Just so you know, search engines are measured using precision and recall, not CTRs:

http://en.wikipedia.org/wiki/Precision_(information_retrieval)
Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 03:06:08 PM
I have little sympathy for Google being sued. Check out the Android phones:

http://random.andrewwarner.com/what-googles-android-looked-like-before-and-after-the-launch-of-iphone/

The first one was shown when RIM was the reigning king of smartphones. If Apple hadn't entered the smartphone industry, it would have been RIM suing Google.

And Windows stole from the Mac OS which stole from Xerox, and all TVs and tablets and a million other things look alike. Good ideas spread. I'll admit that I think that some of the Samsung UIs built on top of Android are too close to iOS for my taste (and iOS has stolen a few things back from Android, like notifications and such), but having phones that are mostly big touchscreens with icons and clocks and whatever is pretty much a given at this point, just like most DSLR cameras are very similar or whatever.
Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 03:06:44 PM
Just so you know, search engines are measured using precision and recall, not CTRs:

http://en.wikipedia.org/wiki/Precision_(information_retrieval)

Just so you know, this is a different thing from what I was talking about.
Title: Re: GOOGL - Google
Post by: valueInv on September 15, 2011, 06:20:07 PM
I have little sympathy for Google being sued. Check out the Android phones:

http://random.andrewwarner.com/what-googles-android-looked-like-before-and-after-the-launch-of-iphone/

The first one was shown when RIM was the reigning king of smartphones. If Apple hadn't entered the smartphone industry, it would have been RIM suing Google.

And Windows stole from the Mac OS which stole from Xerox, and all TVs and tablets and a million other things look alike. Good ideas spread. I'll admit that I think that some of the Samsung UIs built on top of Android are too close to iOS for my taste (and iOS has stolen a few things back from Android, like notifications and such), but having phones that are mostly big touchscreens with icons and clocks and whatever is pretty much a given at this point, just like most DSLR cameras are very similar or whatever.

Google is not some small startup being bullied by big companies through patents like you paint it to be. In fact, its quite the opposite: 

http://www.businessinsider.com/google-flipboard-2011-9?op=1

And there's more:

http://www.reuters.com/article/2011/09/15/us-oracle-google-idUSTRE78E71320110915

There's a reason why Google spent $12B, it has a real reason to be worried.
Title: Re: GOOGL - Google
Post by: Liberty on September 15, 2011, 07:29:27 PM
I never said that google was a small company being bullied, I was just illustrating how these patents are often used and I didn't happen to have a big company example, but the principle is the same. Size doesn't mean that Google can't be attacked using the patent system, and it doesn't mean that the current software patent system makes sense and is a productive part of our legal system.

The worst of the worst are patent holding shells that don't actually have any products, they just have patents and they sue (and because they don't produce anything, they can't be counter-sued).

But there's little doubt that if Google had had tens of thousands of patents in the recent past, they wouldn't have been sued even if they had infringed on the very same patents that they are being accused of infringing right now. This isn't a game of what is right and who owns what, it's a game of who has the biggest stick and the most legal resources (Oracle is almost a law firm by now). All the other big tech firms could sue each other, because if they looked, they could find patents that others infringe. Why don't they sue each other? Because they'll be counter-sued and it wouldn't be productive. But Google only had a few hundred patents and so it was vulnerable...

Google has thousands of very talented engineers, and if they wanted to they could start producing tons of patents and eventually sue everybody, but so far they seem to mostly just want to defend themselves rather than attack. We'll see if that changes over time.

As for competing with Flipboard and Groupon and Facebook and Twitter and Expedia and whatever, I hope you realize that business models are not patentable, and that the world would be a lot worse for everybody if companies could say "nobody can do what I do!" and there was just one source of everything. Most of those companies built on what came before, and there will be others building on what they do. What you're accusing Google of doing is something that Microsoft has done quite a lot, and not always as nicely.
Title: Re: GOOGL - Google
Post by: valueInv on September 16, 2011, 12:55:40 PM
But if you are hitting on google for not being open enough, you should be hitting much harder on Apple and Microsoft and RIM...

Should I?

http://www.theregister.co.uk/2011/09/16/google_html5_effort_stinks/
Title: Re: GOOGL - Google
Post by: Liberty on September 16, 2011, 02:51:34 PM
But if you are hitting on google for not being open enough, you should be hitting much harder on Apple and Microsoft and RIM...

Should I?

http://www.theregister.co.uk/2011/09/16/google_html5_effort_stinks/

I'm *this* close to filing you under 'troll' and just stopping caring... Honestly.
Title: Re: GOOGL - Google
Post by: maxprogram on September 19, 2011, 04:16:20 PM
Quote
business models are not patentable, and that the world would be a lot worse for everybody if companies could say "nobody can do what I do!" and there was just one source of everything. Most of those companies built on what came before, and there will be others building on what they do. What you're accusing Google of doing is something that Microsoft has done quite a lot, and not always as nicely.

Anybody questioning this or just interested in the topic needs to watch this series:

http://www.everythingisaremix.info/watch-the-series/

(If you're pressed for time Part III focuses more on inventions/business models)
Title: Re: GOOGL - Google
Post by: Liberty on September 19, 2011, 04:35:19 PM
Google Wallet news:

http://googleblog.blogspot.com/2011/09/launching-google-wallet-on-sprint-and.html
Title: Re: GOOGL - Google
Post by: Liberty on September 20, 2011, 11:34:21 AM
G+ opens to public, adds new features:

http://googleblog.blogspot.com/2011/09/google-92-93-94-95-96-97-98-99-100.html
Title: Re: GOOGL - Google
Post by: Myth465 on September 20, 2011, 12:01:37 PM
This is a huge uphill battle. I am slight techie and will not join until others do so. Its rough because social media is really about connectors and interactions. Even if most early adapters join, it wont gain traction until some critical mass is obtained, and millions wont go until critical mass is obtained. Not sure how you beat that network effect.
Title: Re: GOOGL - Google
Post by: Liberty on September 20, 2011, 12:09:42 PM
This is a huge uphill battle. I am slight techie and will not join until others do so. Its rough because social media is really about connectors and interactions. Even if most early adapters join, it wont gain traction until some critical mass is obtained, and millions wont go until critical mass is obtained. Not sure how you beat that network effect.

Agreed. Google's best chance is to be a strong #2 and be around if people ever decide to leave Facebook for whatever reason (see what happened to MySpace, though facebook is a much better company than MySpace ever was - but still, in the social world, there are trends that are impossible to predict until they rapidly turn into a tidal wave).

But if they're truly in this for the long-term, they can still get value that they wouldn't otherwise get even if they aren't #1, and they can influence Facebook by forcing them to match certain features and policies.
Title: Re: GOOGL - Google
Post by: Myth465 on September 20, 2011, 12:43:57 PM
I agree, Facebook will stumble sooner or later at some point and the number 2 will gain traction at that point. I also agree on the features, Facebook has made several key updates to compete with Google and so far customers are winning.
Title: Re: GOOGL - Google
Post by: Liberty on September 23, 2011, 02:49:10 PM
https://secure.getclicky.com/user/login?back=%2Fuser%2F#/marketshare/global/search-engines/

Stats compiled from 300k+ different websites getting an aggregate 300+ million page views every day. Breaks down both mobile and desktop searches.
Title: Re: GOOGL - Google
Post by: valueInv on September 23, 2011, 04:02:23 PM
Looks like two thirds of Google's mobile searches come from IOS devices:

http://www.cultofmac.com/114975/google-says-that-23rds-of-all-mobile-search-happens-on-ios-devices/

This is despite Android being the marketshare leader.. So much for the theory that Android will allow Google to dominate mobile search.
What if Apple decides to change the default search engine to Bing?
Title: Re: GOOGL - Google
Post by: Liberty on September 23, 2011, 08:23:11 PM
That's a good question. I've already shared my thoughts about it earlier, though I don't remember in which thread.
Title: Re: GOOGL - Google
Post by: Ben Graham on September 28, 2011, 05:29:02 AM
Google MVNO trial launches in Spain

By Michelle Maisto Sep 26, 2011 12:19 PM,

Google makes smartphones, owns the most popular OS platform and a packed app store, and now, according to reports, is dipping its toe into carrier waters. Google as a quadruple threat?
 
Google's ambitions to become a carrier have been whispered about since at least the launch of the Nexus One. Now, according to new reports, the once-search-engine has made actions of its intentions, launching an MVNO trial in Spain.

Select Google employees in Spain have received starter phone kits that include Nexus S devices and Google-branded SIM cards that run over the Movistar, Orange or Vodafone networks but brand the service "Google_es," Telecom Paper is reporting, citing Spain's El Otro Lado.

"The staff will test which of the three networks is more suitable for a possible future launch of Google's MVNO," states the report. "The service will initially allow Google to perform Google Voice quality testing when paired with a Nexus S handset."

Google, following Apple's winning formula, these days of course controls the essential triumvirate of mobile components: mobile hardware, a mobile operating system and a popular app marketplace. Given its close ties to U.S. carriers, becoming one itself would create a tension outdoing even the partner-or-competitor awkwardness created by its recent acquisition of Motorola (CP: Google acquires Motorola Mobillity to 'supercharge' Android, battle Apple). That is, if — or when — it brings the service to its home turf.

In January Google enabled smartphone owners to port their phone numbers to Google Voice. The service already enabled mobile subscribers to sidestep their carrier, sending texts and making calls over VoIP, and porting moved Google more aggressively into the driver's seat (Unfiltered: Portability could finally grant Google Voice game-changer status).

Given the inexpensive nature of VoIP, and the low handset prices (and subsidy savings) made possible by the Motorola acquisition, Google could become a quadruple threat in a market that's yet had to contend with such an option.

Would the FCC allow it? That's a bridge Google will no doubt cross when it's good and ready.

http://connectedplanetonline.com/mobile-apps/news/Google-MVNO-trial-launches-in-Spain-0926/
Title: Re: GOOGL - Google
Post by: valueInv on September 28, 2011, 08:52:22 AM
Looks like Amazon didn't invite Google to the party:

http://techcrunch.com/2011/09/28/i-want-this-tablet/
Title: Re: GOOGL - Google
Post by: valueInv on September 28, 2011, 08:54:11 AM
I wonder if Microsoft will end up making more money from Android than Google:

http://www.foxnews.com/scitech/2011/09/28/irony-alert-microsoft-profits-from-each-google-gadget-sold/
Title: Re: GOOGL - Google
Post by: meiroy on September 29, 2011, 02:50:02 AM
I wonder if Microsoft will end up making more money from Android than Google:

http://www.foxnews.com/scitech/2011/09/28/irony-alert-microsoft-profits-from-each-google-gadget-sold/

Wouldn't that be a good thing for Google? It means there's another giant around with similar incentive in keeping Android alive and kicking and perhaps with less incentive to invest and compete.
Title: Re: GOOGL - Google
Post by: valueInv on September 29, 2011, 08:19:19 AM
Microsoft is most interested in winning market share on Windows mobile. They are probably using the royalties to fund development and
marketing of their own mobile platform.
Title: Re: GOOGL - Google
Post by: prunes on October 04, 2011, 03:03:25 PM
ust about everything Google does allows Google to do just about everything it does better. Here’s an example:

    By 2007, Google knew enough about the structure of queries to be able to release a US-only directory inquiry service called GOOG-411. You dialled 1-800-4664-411 and spoke your question to the robot operator, which parsed it and spoke you back the top eight results, while offering to connect your call. It was free, nifty and widely used, especially because – unprecedentedly for a company that had never spent much on marketing – Google chose to promote it on billboards across California and New York State. People thought it was weird that Google was paying to advertise a product it couldn’t possibly make money from, but by then Google had become known for doing weird and pleasing things.

    …What was it getting with GOOG-411? It soon became clear that what it was getting were demands for pizza spoken in every accent in the continental United States, along with questions about plumbers in Detroit and countless variations on the pronunciations of ‘Schenectady’, ‘Okefenokee’ and ‘Boca Raton’. GOOG-411, a Google researcher later wrote, was a phoneme-gathering operation, a way of improving voice recognition technology through massive data collection.

    Three years later, the service was dropped, but by then Google had launched its Android operating system and had released into the wild an improved search-by-voice service that didn’t require a phone call. You tapped the little microphone icon on your phone’s screen – it was later extended to Blackberries and iPhones – and your speech was transmitted via the mobile internet to Google servers, where it was interpreted using the advanced techniques the GOOG-411 exercise had enabled. The baby had learned to talk.

    …If, however, Google is able to deploy its newly capable voice recognition system to transcribe the spoken words in the two days’ worth of video uploaded to YouTube every minute, there would be an explosion in the amount of searchable material. Since there’s no reason Google can’t do it, it will.A thought experiment: if Google launched satellites into orbit it could record all terrestrial broadcasts and transcribe those too. That may sound exorbitant, but it’s not obviously crazier than some of the ideas that Google’s founders have dreamed up and found a way of implementing: the idea of photographing all the world’s streets, of scanning all the world’s books, of building cars that drive themselves. It’s the sort of thing that crosses Google’s mind.

http://marginalrevolution.com/marginalrevolution/2011/10/google-and-the-power-of-positive-feedback.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29&utm_content=Google+Reader
Title: Re: GOOGL - Google
Post by: valueInv on October 06, 2011, 01:56:30 PM
Ha, the irony:

http://news.cnet.com/8301-13506_3-20116782-17/intellectual-ventures-sues-motorola-over-patents/?part=rss&subj=news&tag=2547-1_3-0-20
Title: Re: GOOGL - Google
Post by: Liberty on October 06, 2011, 02:06:07 PM
Nothing ironic about it. They can sue whoever they want because their thousands of vague bogus patents cover everything under the sun, that's the 'beauty' of their model (and since they don't make anything, they can't be counter-sued). Have you listened to this? It's mostly about Intellectual Ventures.

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack

Companies can stockpile patents to defend themselves against other companies. But there's no way to defend yourself against a patent troll/extortionist like IV.
Title: Re: GOOGL - Google
Post by: valueInv on October 06, 2011, 02:18:54 PM
The irony is that Google bought Motorola for ammunition in patent fights. Turns out they bought themselves some new patent fights.
Title: Re: GOOGL - Google
Post by: Liberty on October 06, 2011, 02:57:24 PM
The irony is that Google bought Motorola for ammunition in patent fights. Turns out they bought themselves some new patent fights.

If you look at it like that, I agree.

But if you dig deeper, in Motorola they got a shield for inter-company patent fights. It was never expected to protect them against trolls because there can be not mutually-assured destruction equilibrium with them.
Title: Re: GOOGL - Google
Post by: Liberty on October 13, 2011, 01:39:46 PM
http://investor.google.com/earnings/2011/Q3_google_earnings.html

Quote
Google reported revenues of $9.72 billion for the quarter ended September 30, 2011, an increase of 33% compared to the third quarter of 2010. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2011, TAC totaled $2.21 billion, or 24% of advertising revenues.

Google reports operating income, operating margin, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures at the end of this release.

GAAP operating income in the third quarter of 2011 was $3.06 billion, or 31% of revenues. This compares to GAAP operating income of $2.55 billion, or 35% of revenues, in the third quarter of 2010. Non-GAAP operating income in the third quarter of 2011 was $3.63 billion, or 37% of revenues. This compares to non-GAAP operating income of $2.93 billion, or 40% of revenues, in the third quarter of 2010.

GAAP net income in the third quarter of 2011 was $2.73 billion, compared to $2.17 billion in the third quarter of 2010. Non-GAAP net income in the third quarter of 2011 was $3.18 billion, compared to $2.46 billion in the third quarter of 2010.

GAAP EPS in the third quarter of 2011 was $8.33 on 327 million diluted shares outstanding, compared to $6.72 in the third quarter of 2010 on 322 million diluted shares outstanding. Non-GAAP EPS in the third quarter of 2011 was $9.72, compared to $7.64 in the third quarter of 2010.

Non-GAAP operating income and non-GAAP operating margin exclude the expenses related to stock-based compensation (SBC). Non-GAAP net income and non-GAAP EPS exclude the expenses related to SBC and the related tax benefits. In the third quarter of 2011, the charge related to SBC was $571 million, compared to $380 million in the third quarter of 2010. The tax benefit related to SBC was $116 million in the third quarter of 2011 and $85 million in the third quarter of 2010. Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income, and EPS are included at the end of this release.
Title: Re: GOOGL - Google
Post by: Liberty on October 14, 2011, 11:19:44 AM
(http://tctechcrunch2011.files.wordpress.com/2011/10/screen-shot-2011-10-12-at-10-12-5-13.png?w=640)
Title: Re: GOOGL - Google
Post by: valueInv on October 14, 2011, 01:06:30 PM
(http://tctechcrunch2011.files.wordpress.com/2011/10/screen-shot-2011-10-12-at-10-12-5-13.png?w=640)

http://www.asymco.com/2011/01/14/is-android-more-efficient-than-ios-at-generating-search-revenue/
http://www.asymco.com/2011/09/21/the-perils-of-possession-without-utilization/
http://www.appleinsider.com/articles/11/10/10/ipad_now_97_of_tablet_traffic_eclipses_iphone_ios_remains_mobile_leader.html
http://techcrunch.com/2011/10/13/page-google-plus-40-million-mobile-2-5-billion/
http://www.cultofmac.com/114975/google-says-that-23rds-of-all-mobile-search-happens-on-ios-devices/


Title: Re: GOOGL - Google
Post by: DCG on October 14, 2011, 02:02:17 PM
(http://tctechcrunch2011.files.wordpress.com/2011/10/screen-shot-2011-10-12-at-10-12-5-13.png?w=640)

The first thing that jumps out to me about that is the amount of room Apple still has to grow.
Title: Re: GOOGL - Google
Post by: jeffmori7 on October 14, 2011, 05:09:10 PM
Is this for the US market? Because I don't think Android is so popular worlwide so far.
Title: Re: GOOGL - Google
Post by: Liberty on October 14, 2011, 06:06:40 PM
http://www.deadline.com/2011/10/youtube-wrapping-up-groundbreaking-deals-to-launch-channels-with-professionally-produced-video/
Title: Re: GOOGL - Google
Post by: alertmeipp on October 15, 2011, 04:50:15 AM
nice to see msft's #, they have tendency to buy if their innovation. Hope qnx is for real.
Title: Re: GOOGL - Google
Post by: Liberty on October 17, 2011, 02:12:47 PM
http://www.groklaw.net/article.php?story=2011101614244373
Title: Re: GOOGL - Google
Post by: meiroy on October 19, 2011, 03:47:49 AM
http://spectrum.ieee.org/automaton/robotics/artificial-intelligence/how-google-self-driving-car-works (http://spectrum.ieee.org/automaton/robotics/artificial-intelligence/how-google-self-driving-car-works)

How Google's Self-Driving Car Works

Some updated article on google's self-driving cars technology.  If they are the ones who will get this technology out there and own it...
Title: Re: GOOGL - Google
Post by: valueInv on October 19, 2011, 08:37:07 AM
I wish they'd make up their mind:

http://news.cnet.com/8301-13506_3-20122461-17/google-motorola-buy-wont-put-us-into-hardware-business/?part=rss&subj=news&tag=2547-1_3-0-20

http://www.androidpolice.com/2011/09/02/eric-schmidt-says-motorola-purchase-was-for-more-than-just-patents-it-was-also-for-their-amazing-products/
Title: Re: GOOGL - Google
Post by: valueInv on October 27, 2011, 11:46:52 AM
Android fragmentation:

http://www.bgr.com/2011/10/27/android-fragmentation-gets-visualized-infographic/

What a mess.
Title: Re: GOOGL - Google
Post by: Liberty on October 27, 2011, 12:28:45 PM
http://blog.programmableweb.com/2011/10/27/google-maps-usage-fees-how-many-developers-will-have-to-pay/
Title: Re: GOOGL - Google
Post by: DCG on October 27, 2011, 02:23:53 PM
Android fragmentation:

http://www.bgr.com/2011/10/27/android-fragmentation-gets-visualized-infographic/

What a mess.

I was just coming on here to post this. This is exactly what I've been saying on here recently, and why I won't consider buying another Android device until they get this under some sort of control. 

I'm so much happier with my new iPhone than I was with my Android phone.

I'm a Google shareholder, but for their search business and not Android. Google makes money from searches on Android, which is why ther main focus of it is to get it on as many devices as possible, not to build the best OS or devices. The focus of Android manufacturers is to basically produce as many phones as they can to try to sell as many NEW phones as they can (meaning to new customers - there clearly is no focus on trying to build any sort of loyalty for their individual brands). The manufacturers have no product ecosystem to focus on, just hardware.

This is a big reason why there are really no operating systems anywhere close to the level of Apple's.

Here's the chart for people who don't want to follow the link:

(http://www-bgr-com.vimg.net/wp-content/uploads/2011/10/android.png)
Title: Re: GOOGL - Google
Post by: Liberty on November 01, 2011, 11:48:07 AM
http://gmailblog.blogspot.com/2011/11/gmails-new-look.html
Title: Re: GOOGL - Google
Post by: Liberty on November 02, 2011, 07:08:03 AM
http://gs.statcounter.com/#browser-ww-monthly-200809-201107

Chrome's growth is impressive. Always dangerous to extrapolate, but it looks like it could overtake FF and then IE in the next year or two.
Title: Re: GOOGL - Google
Post by: valueInv on November 02, 2011, 08:52:23 AM
http://gmailblog.blogspot.com/2011/11/gmails-new-look.html

Their reader redesign doesn't seem too popular:

http://brianshih.com/78073742
Title: Re: GOOGL - Google
Post by: Myth465 on November 02, 2011, 09:26:18 AM
It downright sucks....
Title: Re: GOOGL - Google
Post by: valueInv on November 02, 2011, 10:54:38 AM
Wow! Google is really showing its product prowess today:

http://techcrunch.com/2011/11/02/new-gmail-app-for-iphone-is-unusable-shows-errors-on-launch/

And they have  some of the best designers in the Silicon Valley working for them.
Title: Re: GOOGL - Google
Post by: rkbabang on November 02, 2011, 11:03:03 AM
I use google reader and gmail heavily and I love the new interface for both of them.  Granted I didn't use any of the social features that they got rid of, I just use reader as an RSS reader and I use gmail to read/send email.  I think the new user interfaces are really nice.
Title: Re: GOOGL - Google
Post by: DCG on November 02, 2011, 11:47:31 AM
Wow! Google is really showing its product prowess today:

http://techcrunch.com/2011/11/02/new-gmail-app-for-iphone-is-unusable-shows-errors-on-launch/

And they have  some of the best designers in the Silicon Valley working for them.

I downloaded the app and it is far from unusable - Techcrunch is fishing for a story and greatly fabricating it.

I got an error message when I first launched the app. I clicked 'ok' and logged in and it works really well so far. I downloaded it on my iPhone and iPad. I like the iPhone interface a lot. As far as the iPad version, it's basically the same as the Gmail display on an iPad browser, which is awful in portrait mode, and ok in landscape. In the portrait mode on the iPad it doesn't load the full email, and it basically displays your emails behind the inbox. Not sure how anyone really uses the GMail app or mobile on the iPad, as it doesn't compare with the iOS mail app.

I also don't understand the hate for the Google Reader re-design. I generally use apps like Pulse, which integrate with your Google Reader feeds, more than Google Reader itself, but the re-design looks like a nice change to me.

I think people just like to freak out anytime changes are made with anything. I'm still waiting to try the new Gmail update (the browser version), as it hasn't yet been pushed out to my account.
Title: Re: GOOGL - Google
Post by: valueInv on November 02, 2011, 01:48:08 PM
Wow! Google is really showing its product prowess today:

http://techcrunch.com/2011/11/02/new-gmail-app-for-iphone-is-unusable-shows-errors-on-launch/

And they have  some of the best designers in the Silicon Valley working for them.

I downloaded the app and it is far from unusable - Techcrunch is fishing for a story and greatly fabricating it.

I got an error message when I first launched the app. I clicked 'ok' and logged in and it works really well so far. I downloaded it on my iPhone and iPad. I like the iPhone interface a lot. As far as the iPad version, it's basically the same as the Gmail display on an iPad browser, which is awful in portrait mode, and ok in landscape. In the portrait mode on the iPad it doesn't load the full email, and it basically displays your emails behind the inbox. Not sure how anyone really uses the GMail app or mobile on the iPad, as it doesn't compare with the iOS mail app.

I also don't understand the hate for the Google Reader re-design. I generally use apps like Pulse, which integrate with your Google Reader feeds, more than Google Reader itself, but the re-design looks like a nice change to me.

I think people just like to freak out anytime changes are made with anything. I'm still waiting to try the new Gmail update (the browser version), as it hasn't yet been pushed out to my account.

I don't think they're fabricating the story:

https://plus.google.com/u/0/111091089527727420853/posts/i5agW3iZy26

http://reviews.cnet.com/8301-19512_7-20129136-233/looks-like-google-borked-its-first-iphone-gmail-app/

Best comment so far:

"I think Apple approved it to embarrass Google"  ;D ;D
Title: Re: GOOGL - Google
Post by: rmitz on November 02, 2011, 01:50:46 PM
It downright sucks....

I didn't mind it.  I like it better in fullscreen mode, though (hit f).
Title: Re: GOOGL - Google
Post by: valueInv on November 02, 2011, 02:21:06 PM
Wow! Google is really showing its product prowess today:

http://techcrunch.com/2011/11/02/new-gmail-app-for-iphone-is-unusable-shows-errors-on-launch/

And they have  some of the best designers in the Silicon Valley working for them.

I downloaded the app and it is far from unusable - Techcrunch is fishing for a story and greatly fabricating it.

I got an error message when I first launched the app. I clicked 'ok' and logged in and it works really well so far. I downloaded it on my iPhone and iPad. I like the iPhone interface a lot. As far as the iPad version, it's basically the same as the Gmail display on an iPad browser, which is awful in portrait mode, and ok in landscape. In the portrait mode on the iPad it doesn't load the full email, and it basically displays your emails behind the inbox. Not sure how anyone really uses the GMail app or mobile on the iPad, as it doesn't compare with the iOS mail app.

I also don't understand the hate for the Google Reader re-design. I generally use apps like Pulse, which integrate with your Google Reader feeds, more than Google Reader itself, but the re-design looks like a nice change to me.

I think people just like to freak out anytime changes are made with anything. I'm still waiting to try the new Gmail update (the browser version), as it hasn't yet been pushed out to my account.

It looks like the app is a wrapper around the gmail mobile site:

http://www.flickr.com/photos/mattgemmell/sets/72157627912430843/with/6306059435/

Do you see any features other than notifications?

Title: Re: GOOGL - Google
Post by: DCG on November 02, 2011, 04:03:01 PM
Wow! Google is really showing its product prowess today:

http://techcrunch.com/2011/11/02/new-gmail-app-for-iphone-is-unusable-shows-errors-on-launch/

And they have  some of the best designers in the Silicon Valley working for them.

I downloaded the app and it is far from unusable - Techcrunch is fishing for a story and greatly fabricating it.

I got an error message when I first launched the app. I clicked 'ok' and logged in and it works really well so far. I downloaded it on my iPhone and iPad. I like the iPhone interface a lot. As far as the iPad version, it's basically the same as the Gmail display on an iPad browser, which is awful in portrait mode, and ok in landscape. In the portrait mode on the iPad it doesn't load the full email, and it basically displays your emails behind the inbox. Not sure how anyone really uses the GMail app or mobile on the iPad, as it doesn't compare with the iOS mail app.

I also don't understand the hate for the Google Reader re-design. I generally use apps like Pulse, which integrate with your Google Reader feeds, more than Google Reader itself, but the re-design looks like a nice change to me.

I think people just like to freak out anytime changes are made with anything. I'm still waiting to try the new Gmail update (the browser version), as it hasn't yet been pushed out to my account.

I don't think they're fabricating the story:

https://plus.google.com/u/0/111091089527727420853/posts/i5agW3iZy26

http://reviews.cnet.com/8301-19512_7-20129136-233/looks-like-google-borked-its-first-iphone-gmail-app/

Best comment so far:

"I think Apple approved it to embarrass Google"  ;D ;D

The Techcrunch headline said the app was 'unusable'. I've used it several times this afternoon to send, receive, and label emails without any problems at all. I just had to click past the initial error message.
Title: Re: GOOGL - Google
Post by: VAL9000 on November 02, 2011, 06:05:37 PM
The Techcrunch headline said the app was 'unusable'. I've used it several times this afternoon to send, receive, and label emails without any problems at all. I just had to click past the initial error message.

With Arrington gone, I think TC's quality and reputation are rapidly degrading.  Here's another recent example:
http://techcrunch.com/2011/10/31/halloween-costume-db/

Why is the editor of the most important blog in tech profiling an utterly useless website?  There is nothing innovative, interesting or newsworthy here.  It's very odd and even for a topical hallowe'en article it's just weak.

I am keeping tabs on this trend with respect to TC's standards.
Title: Re: GOOGL - Google
Post by: abyli on November 04, 2011, 04:34:37 AM
The new Google Reader is not bad, it is very bad. I can not read this board from my kindle 3 any more. So many people hate this new design.
Title: Re: GOOGL - Google
Post by: Hester on November 07, 2011, 05:32:15 AM
This guy can be a little out there at times, and I am sure many of you know his blog, Stableboy Selections. He is convinced that voice recognition systems will erode Google's search market share heavily. No opinion myself.

http://stableboyselections.com/2011/11/07/google-how-will-the-monopoly-in-the-paid-search-business-fare-when-the-business-of-paid-search-begins-to-decline/
Title: Re: GOOGL - Google
Post by: valueInv on November 07, 2011, 08:37:32 AM
The new Google Reader is not bad, it is very bad. I can not read this board from my kindle 3 any more. So many people hate this new design.

I am really getting frustrated with it. It magically marks "unread" posts as "read". Any other options for RSS aggregators out there?
Title: Re: GOOGL - Google
Post by: DCG on November 07, 2011, 10:07:08 AM
The new Google Reader is not bad, it is very bad. I can not read this board from my kindle 3 any more. So many people hate this new design.

I am really getting frustrated with it. It magically marks "unread" posts as "read". Any other options for RSS aggregators out there?

There are tons of aggregators out there...what device/operating system?
Title: Re: GOOGL - Google
Post by: Rabbitisrich on November 07, 2011, 04:28:47 PM
This guy can be a little out there at times, and I am sure many of you know his blog, Stableboy Selections. He is convinced that voice recognition systems will erode Google's search market share heavily. No opinion myself.

http://stableboyselections.com/2011/11/07/google-how-will-the-monopoly-in-the-paid-search-business-fare-when-the-business-of-paid-search-begins-to-decline/

Eric Schmidt noted a similar possibility. The scary thing about tech companies is that competition doesn't have to come from a like competitor. Who knew that when Apple released the Ipod it would support a string of hits that would erode RIMM's U.S. franchise?
Title: Re: GOOGL - Google
Post by: meiroy on November 07, 2011, 09:21:15 PM

What is said about the possible obsolescence of Google's technological edge is true for any other company to some degree.  One only has to read posts on this thread to see why it's possible, yet less likely for Google.


"There will always be a need for an index search like Google performs, [but the most common search activities will drift away from Google.The problem for Google is that it makes most money from the most common searches. "

"The day is not far, when third party apps will filter the results from Google to provide the user with the right answer without showing ads from which Google makes money. "

So, he is saying that Google will still be the one that would provide the "content". Even if this what indeed will happen, is he suggesting that Google would provide this content for free?


Hmm I could go on but in truth this article is just provocative and biased for choosing SIRI as an example.


Title: Re: GOOGL - Google
Post by: valueInv on November 08, 2011, 10:47:02 PM
Google+ doesn't seem to be that impressive:

http://www.slate.com/articles/technology/technology/2011/11/google_had_a_chance_to_compete_with_facebook_not_anymore_.html
Title: Re: GOOGL - Google
Post by: meiroy on November 09, 2011, 02:45:34 AM
Google+ doesn't seem to be that impressive:

http://www.slate.com/articles/technology/technology/2011/11/google_had_a_chance_to_compete_with_facebook_not_anymore_.html


There's so much information out there it's easy to go and pick some article to confirm whatever opinion you'd like to express.

Here's another link:
http://www.wired.com/wiredenterprise/2011/11/google-plus-pages/
Why Google Plus Pages (Will) Beat Facebook. And Twitter

Now I can spend another 5 second and find some article stating that Google+ sucks.

Oh, and BTW, you're seriously trolling this thread.


Title: Re: GOOGL - Google
Post by: Hester on November 09, 2011, 06:08:26 AM
Google+ doesn't seem to be that impressive:

http://www.slate.com/articles/technology/technology/2011/11/google_had_a_chance_to_compete_with_facebook_not_anymore_.html


There's so much information out there it's easy to go and pick some article to confirm whatever opinion you'd like to express.

Here's another link:
http://www.wired.com/wiredenterprise/2011/11/google-plus-pages/
Why Google Plus Pages (Will) Beat Facebook. And Twitter

Now I can spend another 5 second and find some article stating that Google+ sucks.

Oh, and BTW, you're seriously trolling this thread.

How is he trolling this thread?!? There might be many articles on Google+ but I found the Slate article interesting and another viewpoint. It's not like this was some obscur blog, it's a major website. There is no need to censor negative information.
Title: Re: GOOGL - Google
Post by: meiroy on November 09, 2011, 06:49:42 PM
Google+ doesn't seem to be that impressive:

http://www.slate.com/articles/technology/technology/2011/11/google_had_a_chance_to_compete_with_facebook_not_anymore_.html


There's so much information out there it's easy to go and pick some article to confirm whatever opinion you'd like to express.

Here's another link:
http://www.wired.com/wiredenterprise/2011/11/google-plus-pages/
Why Google Plus Pages (Will) Beat Facebook. And Twitter

Now I can spend another 5 second and find some article stating that Google+ sucks.

Oh, and BTW, you're seriously trolling this thread.

How is he trolling this thread?!? There might be many articles on Google+ but I found the Slate article interesting and another viewpoint. It's not like this was some obscur blog, it's a major website. There is no need to censor negative information.

If you would follow this thread from the beginning and note all his posts, not just the one above, it should be quite obvious, especially if it's compared to another thread.

Anyhow, I do agree with you that negative posts and push back is extremely important, so trolling the thread does have its helpful aspect even if it's for the sake of trolling.

Title: Re: GOOGL - Google
Post by: valueInv on November 09, 2011, 10:48:53 PM
Google+ doesn't seem to be that impressive:

http://www.slate.com/articles/technology/technology/2011/11/google_had_a_chance_to_compete_with_facebook_not_anymore_.html


There's so much information out there it's easy to go and pick some article to confirm whatever opinion you'd like to express.

Here's another link:
http://www.wired.com/wiredenterprise/2011/11/google-plus-pages/
Why Google Plus Pages (Will) Beat Facebook. And Twitter

Now I can spend another 5 second and find some article stating that Google+ sucks.

Oh, and BTW, you're seriously trolling this thread.

How is he trolling this thread?!? There might be many articles on Google+ but I found the Slate article interesting and another viewpoint. It's not like this was some obscur blog, it's a major website. There is no need to censor negative information.

If you would follow this thread from the beginning and note all his posts, not just the one above, it should be quite obvious, especially if it's compared to another thread.

Anyhow, I do agree with you that negative posts and push back is extremely important, so trolling the thread does have its helpful aspect even if it's for the sake of trolling.

Here's the definition of trolling:

http://en.wikipedia.org/wiki/Troll_(Internet)

Let me address the characteristics:

Inflammatory:  I hold a negative view on Google. My posts are in support of this view. If you read through the posts, you'll see most of them contain some sort of evidence or datapoints that I used to form my opinion. I used that to keep myself from making unsupported claims and keeping myslef grounded. Opinions should be based on facts and analysis. When you don't have perfect information, you make an educated guess. I have not attacked a person, I have attacked a point of view. Being bearish on a company is not trolling.

Extraneous or off-topic: This is a thread about Google. I am on topic.

BTW, this thread is far less heated than many others like the RIMM thread.

I welcome you prove me wrong on Google. But please do so with some concrete backing, not claims.


Title: Re: GOOGL - Google
Post by: valueInv on November 09, 2011, 10:58:57 PM
The new Google Reader is not bad, it is very bad. I can not read this board from my kindle 3 any more. So many people hate this new design.

I am really getting frustrated with it. It magically marks "unread" posts as "read". Any other options for RSS aggregators out there?

There are tons of aggregators out there...what device/operating system?

I finally settled on Reeder on the Mac. It has some quirks but has the best user experience by far, IMO.
Title: Re: GOOGL - Google
Post by: meiroy on November 09, 2011, 11:19:18 PM
Google+ doesn't seem to be that impressive:

http://www.slate.com/articles/technology/technology/2011/11/google_had_a_chance_to_compete_with_facebook_not_anymore_.html


There's so much information out there it's easy to go and pick some article to confirm whatever opinion you'd like to express.

Here's another link:
http://www.wired.com/wiredenterprise/2011/11/google-plus-pages/
Why Google Plus Pages (Will) Beat Facebook. And Twitter

Now I can spend another 5 second and find some article stating that Google+ sucks.

Oh, and BTW, you're seriously trolling this thread.

How is he trolling this thread?!? There might be many articles on Google+ but I found the Slate article interesting and another viewpoint. It's not like this was some obscur blog, it's a major website. There is no need to censor negative information.

If you would follow this thread from the beginning and note all his posts, not just the one above, it should be quite obvious, especially if it's compared to another thread.

Anyhow, I do agree with you that negative posts and push back is extremely important, so trolling the thread does have its helpful aspect even if it's for the sake of trolling.

Here's the definition of trolling:

http://en.wikipedia.org/wiki/Troll_(Internet)

Let me address the characteristics:

InflammatoryI hold a negative view on Google. My posts are in support of this view. If you read through the posts, you'll see most of them contain some sort of evidence or datapoints that I used to form my opinion.

You don't say? You hold a negative view on Google? Who would have guessed...

So, I've taken your suggestion of looking again at your posts on this thread by clicking on your profile, only to yet again notice the massive amount/ratio of your posts on this thread and their content. If I thought previously that you are trolling now I'm pretty sure about it.

Anyhow, this is OT and I stop here.  Pardon to all who had to read it.
Title: Re: GOOGL - Google
Post by: Liberty on November 29, 2011, 09:32:20 AM
http://www.groklaw.net/article.php?story=20111129080612204
Title: Re: GOOGL - Google
Post by: txlaw on December 01, 2011, 04:42:34 PM
This was unexpected.

http://online.wsj.com/article/SB10001424052970204012004577072323400561792.html
Title: Re: GOOGL - Google
Post by: Liberty on December 01, 2011, 05:13:01 PM
This was unexpected.

http://online.wsj.com/article/SB10001424052970204012004577072323400561792.html

Indeed. I can't say that I like it much at first glance, but I'll reserve judgement until I have more details and figure out what the strategy is.

I guess there could be potential (and maybe even margins) in becoming a kind of inventory-less shopping hub, but it seems hard to pull off.
Title: Re: GOOGL - Google
Post by: DCG on December 02, 2011, 06:04:45 AM
Google has struggled with retail though. I kind of wish they would focus on what they do best, which is search and advertising. It seems like Brin is ignoring Steve Jobs' advice of sticking to 4 products.
Title: Re: GOOGL - Google
Post by: Liberty on December 02, 2011, 07:17:58 AM
Google has struggled with retail though. I kind of wish they would focus on what they do best, which is search and advertising. It seems like Brin is ignoring Steve Jobs' advice of sticking to 4 products.

Page is the CEO now, not Brin. And he did refocus the company a fair bit in the past 6 months by closing down lots of projects, but I doubt that he would ever literally stick to only 4 products. IMO it's different to have a look at the Apple store and not having too many products as it is to go to youtube, do a search, check gmail... The offering isn't quite the same, since you don't have to choose between products - you can use all of them for free if you want.

I'm not expecting much, but I'd love them to surprise me, especially as a consumer (not a shareholder anymore) since any competition for Amazon can only make prices and services better.
Title: Re: GOOGL - Google
Post by: DCG on December 02, 2011, 07:49:53 AM
Google has struggled with retail though. I kind of wish they would focus on what they do best, which is search and advertising. It seems like Brin is ignoring Steve Jobs' advice of sticking to 4 products.

Page is the CEO now, not Brin.

sorry...hadn't had my coffee yet.

I don't think they should literally stick to 4 products if other new products/services support their main businesses, if that makes sense. Things like Android, Gmail, Youtube, and other products are tied back to Google search and advertising, which is fine. I just don't want to see them getting too far into things that are really separate from their main business (becoming a phone retailer and providing customer service was beyond their main business, and they struggled at it). I like Google Shopping though, and think it might be better to tie this one-day shipping thing into Google Shopping. It's unclear what Google's role will be in this thing though.

Google has been very successful with the majority of their products, so I shouldn't really doubt them, but they've struggled when trying to get into aspects of retail (Selling phones, Google Books, Google music so far, etc.).
Title: Re: GOOGL - Google
Post by: valueInv on December 19, 2011, 05:35:21 PM
Is there anyone not suing Google on Android?
http://www.lightreading.com/document.asp?doc_id=215744&

In other news:
http://online.wsj.com/article/SB10001424052970204791104577109010174484888.html
Title: Re: GOOGL - Google
Post by: Liberty on December 26, 2011, 11:21:18 AM
http://www.groklaw.net/article.php?story=20111223193332457
Title: Re: GOOGL - Google
Post by: Liberty on January 04, 2012, 09:29:58 PM
Buying more patents from IBM:

http://www.bbc.co.uk/news/technology-16409081
Title: Re: GOOGL - Google
Post by: valueInv on January 06, 2012, 03:46:02 PM
Buying more patents from IBM:

http://www.bbc.co.uk/news/technology-16409081

Did they not find enough patents with Motorola after spending $12.5B on them?

Motorola looks like they're already losing marketshare:

http://www.reuters.com/article/2012/01/06/us-motorola-idUSTRE80522I20120106
Title: Re: GOOGL - Google
Post by: Smazz on January 06, 2012, 05:49:52 PM
Buying more patents from IBM:

http://www.bbc.co.uk/news/technology-16409081

Did they not find enough patents with Motorola after spending $12.5B on them?

Motorola looks like they're already losing marketshare:

http://www.reuters.com/article/2012/01/06/us-motorola-idUSTRE80522I20120106
I always wonder about these patents from the tech industry. With how so many can be created with a few changes from an existing (in general terms) and knowing how fast the tech in the industry changes - its amazing that older patents (except in a minority of situations) are so valuable.

For Instance - the Kodak patents. For a company that hasnt done anything and has zero business left its amazing that their patents are still worth $Billions. Yes, I realize the deal with their  technology still being used in some of the smartphone camera tech but as per my first statement, it still amazes me.
Title: Re: GOOGL - Google
Post by: Liberty on January 06, 2012, 06:03:26 PM
Buying more patents from IBM:

http://www.bbc.co.uk/news/technology-16409081

Did they not find enough patents with Motorola after spending $12.5B on them?

Motorola looks like they're already losing marketshare:

http://www.reuters.com/article/2012/01/06/us-motorola-idUSTRE80522I20120106

I'm guessing they did an assessment of where they still had some vulnerabilities and patched those holes.
Title: Re: GOOGL - Google
Post by: beerbaron on January 06, 2012, 06:05:38 PM
My favorite technology patent is the Color Kinetics patent (Phillips). It basically claims any control of multiple color LEDs with PWM. I don't know how the patent office let that happen but PWM is the only way you can control a LED... Ah yes Color Kinetics was not making any money but Phillips bough them at 700M$ for their patent portfolio.

My point is: Some very specific (0.1%) patents are worth a fortune, 90% are worth less then the paper they were printed and the remaining 9.9% is worth some money but not a game changer.

You really need to be an expert in a narrow field in order to recognize the 0.1%!

BeerBaron
Title: Re: GOOGL - Google
Post by: valueInv on January 06, 2012, 11:33:36 PM
Buying more patents from IBM:

http://www.bbc.co.uk/news/technology-16409081

Did they not find enough patents with Motorola after spending $12.5B on them?

Motorola looks like they're already losing marketshare:

http://www.reuters.com/article/2012/01/06/us-motorola-idUSTRE80522I20120106

I'm guessing they did an assessment of where they still had some vulnerabilities and patched those holes.

My understanding is that, the patents are negotiating cards with violated patents representing
potential liabilities. As long as you hold enough high value cards, it doesn't matter which area you hold them in.
The one with the most total value gets the residual payment after subtracting their potential liability. Is that not how
it works?

HTC seems to be slipping too:
http://www.zdnet.com/blog/btl/htc-posts-poor-q4-results-loses-android-mojo-to-samsung-apple/66332

The only one doing well is Samsung.
Title: Re: GOOGL - Google
Post by: valueInv on January 06, 2012, 11:39:26 PM
Buying more patents from IBM:

http://www.bbc.co.uk/news/technology-16409081

Did they not find enough patents with Motorola after spending $12.5B on them?

Motorola looks like they're already losing marketshare:

http://www.reuters.com/article/2012/01/06/us-motorola-idUSTRE80522I20120106
I always wonder about these patents from the tech industry. With how so many can be created with a few changes from an existing (in general terms) and knowing how fast the tech in the industry changes - its amazing that older patents (except in a minority of situations) are so valuable.

For Instance - the Kodak patents. For a company that hasnt done anything and has zero business left its amazing that their patents are still worth $Billions. Yes, I realize the deal with their  technology still being used in some of the smartphone camera tech but as per my first statement, it still amazes me.

The patent system is badly broken, I wonder why there hasn't been a big overhaul? Where is the resistance to the overhaul coming from? On one hand we seem to be handing out patents for obvious improvements like candy. On the other hand, a groundbreaking product like the iPhone seems to have little that can be protect it from blatant copying.

http://thedoghousediaries.com/3345
Title: Re: GOOGL - Google
Post by: Liberty on January 07, 2012, 12:08:23 AM
My understanding is that, the patents are negotiating cards with violated patents representing
potential liabilities. As long as you hold enough high value cards, it doesn't matter which area you hold them in.
The one with the most total value gets the residual payment after subtracting their potential liability. Is that not how
it works?


That's mostly my understanding too, but that's the broad lines. I think that if we zoom in a little, we'll find that it's a bit more subtle than that, and that in some cases it's worth going after certain specific patents either for defensive or offensive purposes, and that they can be used differently than the massive stockpile because they are of higher quality/specificity than the average BS patent out there. Not sure.
Title: Re: GOOGL - Google
Post by: compoundinglife on January 07, 2012, 11:36:01 AM

The patent system is badly broken, I wonder why there hasn't been a big overhaul? Where is the resistance to the overhaul coming from? On one hand we seem to be handing out patents for obvious improvements like candy. On the other hand, a groundbreaking product like the iPhone seems to have little that can be protect it from blatant copying.

http://thedoghousediaries.com/3345

NPR's "This American Life" did a excellent piece on ex MSFT CTO Nathan Myhrvold's company IV which has a large patent portfolio. Doesn't answer the question of where the resistance is coming from but gives some good insight into one of the firms buying them up.

http://www.thisamericanlife.org/radio-archives/episode/441/when-patents-attack
Title: Re: GOOGL - Google
Post by: racemize on January 07, 2012, 11:54:48 AM
I happen to write patents (including software patents) for a living, so hopefully I can provide some insight here.  Generally, for large companies, patents are used in the arsenal method mentioned previously.  Oftentimes, competing companies will cross license the patents or leave each other alone due to the high cost of litigation and the likelihood of infringement on both sides.  However, I've read that Apple has pretty much declared war on iPhone mimics and is not willing to take money to settle the dispute--we'll see how that plays out.

With regard to patent reform, there has been a lot of changes in the patent system recently, both in the recent bill that was passed as well as several new court rulings.  In general though, I believe the largest issue with patents is the quality of Examination.  The Examiners at the Patent Office are generally paid less than their counterparts and are pressed for time (there is a lot of pressure on them to get through their case loads).  Additionally, many of the Examiners are English as a second language folks.  Because of the disparity in pay, this is a hard issue to overcome.

I'll also note that obviousness is very hard to determine in hindsight.  Many of the best inventions appear extremely obvious once they are created, but had to be created in the first place.  For example, it took quite a while for windshield wipers to become automatic, which seems awfully obvious to people after the fact.
Title: Re: GOOGL - Google
Post by: Liberty on January 11, 2012, 06:52:52 AM
http://www.bbc.co.uk/news/business-16486796

Quote
Spanish banking giant BBVA is switching its 110,000 staff to use Google's range of enterprise software.

The deal is the biggest that the search giant has signed with one company for its cloud-computing services, where software is offered as a service via the internet.
Title: Re: GOOGL - Google
Post by: valueInv on January 11, 2012, 09:17:29 AM
Cue a fresh round of lawsuits:

http://news.cnet.com/8301-30685_3-57356989-264/google-in-search-google-had-no-choice/
Title: Re: GOOGL - Google
Post by: alpha23 on January 11, 2012, 10:33:46 AM
http://www.bbc.co.uk/news/business-16486796

Quote
Spanish banking giant BBVA is switching its 110,000 staff to use Google's range of enterprise software.

The deal is the biggest that the search giant has signed with one company for its cloud-computing services, where software is offered as a service via the internet.

Yes this is hopefully where Google begins to show the potential of its cloud strategy for paying enterprise users. That their first large enterprise customer is a bank is no accident. They are starting out with the most difficult type of customer to service in this space. Our own small business just switched to Google apps for email and docs and we are pleased with the results.
Title: Re: GOOGL - Google
Post by: valueInv on January 13, 2012, 07:21:00 AM
More bad news for Google:

http://techcrunch.com/2012/01/13/facing-another-pr-disaster-google-accused-of-fraudulently-undermining-a-kenyan-startup
http://www.pcmag.com/article2/0,2817,2398872,00.asp
http://gigaom.com/video/google-tv-ces/
Title: Re: GOOGL - Google
Post by: meiroy on January 13, 2012, 06:01:57 PM
http://www.bbc.co.uk/news/business-16486796

Quote
Spanish banking giant BBVA is switching its 110,000 staff to use Google's range of enterprise software.

The deal is the biggest that the search giant has signed with one company for its cloud-computing services, where software is offered as a service via the internet.

Yes this is hopefully where Google begins to show the potential of its cloud strategy for paying enterprise users. That their first large enterprise customer is a bank is no accident. They are starting out with the most difficult type of customer to service in this space. Our own small business just switched to Google apps for email and docs and we are pleased with the results.

Same here. Their products just get better and better, increase efficiency and save money. At least from a perspective of a small company.  Using cloud services seems so natural now, why bother with purchasing and handling your own software and excess hardware while getting a possibly inferior output.
Title: Re: GOOGL - Google
Post by: valueInv on January 17, 2012, 08:55:15 AM
The lawsuits aren't going to be over anytime soon:
http://gigaom.com/apple/apple-targets-samsung-smartphones-tablets-with-new-german-lawsuits
Title: Re: GOOGL - Google
Post by: valueInv on January 19, 2012, 01:34:56 PM
Earnings and revenue came up short this quarter. Stock trading down almost 10% afterhours:

http://techcrunch.com/2012/01/19/google-comes-up-short-in-q4-earnings/
Title: Re: GOOGL - Google
Post by: racemize on January 19, 2012, 01:57:41 PM
I'm listening to the earning's call now, but I thought the results were decent personally.
Title: Re: GOOGL - Google
Post by: valueInv on January 21, 2012, 09:39:24 AM
Liberty - any idea why Google's ad rates dropped this quarter?
Title: Re: GOOGL - Google
Post by: sswan11 on January 21, 2012, 10:19:33 AM
I read that increased mobile ads, which are discounted 25-50%, caused drop in avg ad rates. 
Title: Re: GOOGL - Google
Post by: Evolveus on January 21, 2012, 07:35:09 PM
If you are of the school that goog has a defensible and growing moat, wouldn't goog leaps be a good way to get a little leverage on a high pps stock?  Is that a common strategy for stocks with a high price per share (share price not necessarily representing value) that smaller p.a.'s can't purchase in large amounts?

thanks,
Title: Re: GOOGL - Google
Post by: valueInv on January 30, 2012, 08:30:23 AM
Interesting debate between Jeff Matthews and Henry Blodget on Facebook Vs Google advertising:

http://jeffmatthewsisnotmakingthisup.blogspot.com/2012/01/is-facebook-killing-google-no-but.html
Title: Re: GOOGL - Google
Post by: VAL9000 on January 30, 2012, 10:35:26 AM
Interesting debate between Jeff Matthews and Henry Blodget on Facebook Vs Google advertising:

http://jeffmatthewsisnotmakingthisup.blogspot.com/2012/01/is-facebook-killing-google-no-but.html

I wholeheartedly agree that the value of Facebook rests in its treasure chest of demographic data and the ability for advertisers to use that data.  Google's response to this is Google+ and the new terms of service which allow integrating data across its services.

It's unlikely that Google will be able to reproduce Facebook's success on the social networking front, but that may not prohibit them from also building up a massive demographic treasure chest.  Google can make many valuable inferences about its users based on their interactions with search, gmail, maps, finance, youtube, etc.  The trick is to get the users to accept this.  Letting Facebook test the waters here will allow Google to jump in right afterwards.

I've established a new long position in Google and will round it out to about 25-30% of my portfolio.  The main driver for this is that I think Google is on the cusp of some major new ad growth.  In global terms, Google is well ahead of its competitors and continues to grow.  Product-wise, Google has started to get its act together in terms of monetization.  Integrating data across properties will improve advertising revenues and profits.  New sources of revenue, such as Google Wallet ads and Google Apps are also accretive to Google's traditional advertising income.

I'm worried about looming legal issues, the Motorola purchase, inflating tech salaries, and talent exodus.  But clearly not _that_ worried. :)
Title: Re: GOOGL - Google
Post by: racemize on January 30, 2012, 10:44:48 AM
fyi, you can go see what Google thinks your demographics are:

https://www.google.com/settings/ads/onweb/

It pegged me at 65+ male.   I guess I read too much financial news.  =/.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 30, 2012, 10:53:44 AM
fyi, you can go see what Google thinks your demographics are:

https://www.google.com/settings/ads/onweb/

It pegged me at 65+ male.   I guess I read too much financial news.  =/.

This is awesome.  Mine's closer at 35-44 (I'm 30) - I guess the time spent on video games has balanced out the financial news.  They nailed me on this category:

Food & Drink - Candy & Sweets

Guilty as charged.
Title: Re: GOOGL - Google
Post by: misterstockwell on January 30, 2012, 11:27:24 AM
fyi, you can go see what Google thinks your demographics are:

https://www.google.com/settings/ads/onweb/

It pegged me at 65+ male.   I guess I read too much financial news.  =/.

Haha evil Google! You won't be tracking me. I have eliminated almost all use of Google services.
 
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Title: Re: GOOGL - Google
Post by: VAL9000 on January 30, 2012, 11:52:21 AM
Haha evil Google! You won't be tracking me. I have eliminated almost all use of Google services.
 
Ads Preferences. 
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Argh - you're messing with my investment!

;)
Title: Re: GOOGL - Google
Post by: oldye on January 30, 2012, 12:36:52 PM
fyi, you can go see what Google thinks your demographics are:

https://www.google.com/settings/ads/onweb/

It pegged me at 65+ male.   I guess I read too much financial news.  =/.

Haha evil Google! You won't be tracking me. I have eliminated almost all use of Google services.
 
Ads Preferences. 
Cookies are disabled
Your browser's cookies seem to be disabled. Ads Preferences will not work until you enable cookies in your browser

You live here?
http://www.theonion.com/video/google-opt-out-feature-lets-users-protect-privacy,14358/
Title: Re: GOOGL - Google
Post by: valueInv on January 30, 2012, 02:28:49 PM
Interesting debate between Jeff Matthews and Henry Blodget on Facebook Vs Google advertising:

http://jeffmatthewsisnotmakingthisup.blogspot.com/2012/01/is-facebook-killing-google-no-but.html

I wholeheartedly agree that the value of Facebook rests in its treasure chest of demographic data and the ability for advertisers to use that data.  Google's response to this is Google+ and the new terms of service which allow integrating data across its services.

It's unlikely that Google will be able to reproduce Facebook's success on the social networking front, but that may not prohibit them from also building up a massive demographic treasure chest.  Google can make many valuable inferences about its users based on their interactions with search, gmail, maps, finance, youtube, etc.  The trick is to get the users to accept this.  Letting Facebook test the waters here will allow Google to jump in right afterwards.

I've established a new long position in Google and will round it out to about 25-30% of my portfolio.  The main driver for this is that I think Google is on the cusp of some major new ad growth.  In global terms, Google is well ahead of its competitors and continues to grow.  Product-wise, Google has started to get its act together in terms of monetization.  Integrating data across properties will improve advertising revenues and profits.  New sources of revenue, such as Google Wallet ads and Google Apps are also accretive to Google's traditional advertising income.

I'm worried about looming legal issues, the Motorola purchase, inflating tech salaries, and talent exodus.  But clearly not _that_ worried. :)

Some of their recent changes have two sides:
http://venturebeat.com/2012/01/28/google-has-chosen-between-advertisers-and-searchers-guess-who-lost
http://www.forbes.com/sites/ericjackson/2012/01/23/googles-big-problem-they-dont-want-you-to-know-about/
Title: Re: GOOGL - Google
Post by: misterstockwell on January 30, 2012, 02:40:51 PM
You live here?
http://www.theonion.com/video/google-opt-out-feature-lets-users-protect-privacy,14358/

Sounds like paradise!
Title: Re: GOOGL - Google
Post by: Ben Graham on February 06, 2012, 12:21:15 AM
Google Testing a Mysterious “Entertainment Device” in Four U.S Cities!


http://hitechanalogy.com/google-testing-mysterious-entertainment-device-cities/
Title: Re: GOOGL - Google
Post by: Ben Graham on February 09, 2012, 09:57:41 PM
Google Is Making a Home Entertainment System, Complete with Streaming Music and Smartphone Remote Control

The Wall Street Journal is reporting that Google—usually a software creator—is putting together an entertainment system, for which they've designed both the hardware and the software. It would stream music from Google's online store and send it either to wireless speakers or other networked computer, using smartphones or tablets as a remote control. We don't know much else yet, besides the fact that they're aiming for a release later this year. It's a pretty big step for Google, though, who usually only makes the software for such devices—see Android and Google TV, both of which exist on devices manufactured by other companies. This approach is much more Apple-like than we've seen from Google, so it will be interesting to see how this works for them going forward—with any luck, it'll get rid of that horrible fragmentation problem.

http://lifehacker.com/5883876/google-is-making-a-home-entertainment-system-complete-with-streaming-music-and-smartphone-remote-control
Title: Re: GOOGL - Google
Post by: valueInv on February 20, 2012, 10:37:51 AM
Eric Schmidt selling a bunch of stock:

http://www.valuewalk.com/2012/02/eric-schmidt-plans-to-sell-stock-worth-1-5-billion
Title: Re: GOOGL - Google
Post by: valueInv on February 27, 2012, 05:02:51 PM
Looks like Google+ is doing well so far:

http://online.wsj.com/article/SB10001424052970204653604577249341403742390.html
Title: Re: GOOGL - Google
Post by: valueInv on March 02, 2012, 11:05:38 AM
Motorola's patent position seems weakened:

http://fosspatents.blogspot.in/2012/02/motorola-cant-enforce-standard.html
Title: Re: GOOGL - Google
Post by: valueInv on March 14, 2012, 08:33:07 PM
Like the Goldman Sachs letter, there's one making the rounds for Google:

http://blogs.msdn.com/b/jw_on_tech/archive/2012/03/13/why-i-left-google.aspx
Title: Re: GOOGL - Google
Post by: prunes on March 15, 2012, 03:48:47 PM
Ex-Google employee says Google+ has ruined the company

http://money.cnn.com/2012/03/14/technology/microsoft-google-rant/
Title: Re: GOOGL - Google
Post by: racemize on April 12, 2012, 01:32:00 PM
does anyone else think these class C shares are annoying?  It seems like it will always sell at a discount to A shares.
Title: Re: GOOGL - Google
Post by: jeffmori7 on April 12, 2012, 03:35:12 PM
I'm with you on this racemize..from what I understand, these shares are the same, but without voting right..so they are less valuable and they will give plenty of them to their employees. I would not be surprise to see a drop in price on their first day of trading with an increase in the A shares!

Nonetheless, Google is a strange creature, but continue to deliver impressive results with the internet which continues to be growing everywhere.
Title: Re: GOOGL - Google
Post by: VAL9000 on April 12, 2012, 04:00:47 PM
So sell the C's and buy more A's if voting rights are important to you.  I'd be tempted to go the other direction.  I don't think I've ever exercised my right to vote in a company this large.  If C's sell for less than A's, I can buy the same % of earnings at a lower price.  If a dividend is issued, it would also yield better on the C's.

I think the C's have really just been introduced so that Larry, Sergey, and Eric can cash out on half their shares without losing any control.

Edit:
From Google:
Quote
In addition, Eric, Sergey and I have all agreed to “stapling” arrangements so that, above set thresholds, if our economic interest in Google were to decline, our votes would as well. We also have provisions to ensure all shareholders are treated fairly from an economic perspective.

Guess they can't sell as much as I thought :)
Title: Re: GOOGL - Google
Post by: racemize on April 12, 2012, 09:37:45 PM
yeah, but what does it mean to own a share of a company and have no voting rights?  That seems almost contradictory. 

Anyway, regarding selling the C's--that doesn't really work.  If everyone does that, then it arbitrarily drives the price down, so now I'm stuck trying to evaluate two different types of shares because of this decision.  I'm not sure how much of a difference the price will be though, given that the founders have 66% control with the B shares already.  Mostly, just annoyed with it; they could have just issued them to the employees instead of this dividend...
Title: Re: GOOGL - Google
Post by: meiroy on April 12, 2012, 09:58:39 PM
yeah, but what does it mean to own a share of a company and have no voting rights?  That seems almost contradictory. 

Anyway, regarding selling the C's--that doesn't really work.  If everyone does that, then it arbitrarily drives the price down, so now I'm stuck trying to evaluate two different types of shares because of this decision.  I'm not sure how much of a difference the price will be though, given that the founders have 66% control with the B shares already.  Mostly, just annoyed with it; they could have just issued them to the employees instead of this dividend...

Now I get your meaning, you're right. This split is annoying, at least at first look.
Title: Re: GOOGL - Google
Post by: valueInv on April 12, 2012, 09:59:36 PM
CPCs declined another 12%:
http://gigaom.com/2012/04/12/google-bounces-back-announces-stock-split-plan/

They are pitching it as due to the immaturity of mobile ads. However, historically, click through rates are high in the beginning and decline as a
channel matures:
http://andrewchenblog.com/2012/04/05/the-law-of-shitty-clickthroughs/


Title: Re: GOOGL - Google
Post by: valueInv on April 15, 2012, 10:32:55 AM
More on the CPC decline:

http://techcrunch.com/2012/04/15/mobile-paradox/
Title: Re: GOOGL - Google
Post by: prevalou on April 15, 2012, 10:58:41 AM
What is the problem if sales increase more than 20 % and margins improve ?
Title: Re: GOOGL - Google
Post by: valueInv on April 16, 2012, 03:38:51 PM
What is the problem if sales increase more than 20 % and margins improve ?
Because sooner or later sales will start declining if CPCs and CTRs keep declining. I have argued that once Facebook goes public, they will rev up their monetization engine. This brings an increased supply of channels/ads into the marketplace and will reduce ad rates. Looks like this is already happening:

http://techcrunch.com/2012/04/16/facebook-cpc
Title: Re: GOOGL - Google
Post by: prevalou on April 17, 2012, 01:57:23 AM
not necessarily.  better rates and efficiency for ads can boost demand globally too. Maybe advertisers paid too much according to the efficiency of the ads, are reajusting, bringing more efficiency and inspiring other companies too use adwords.
Title: Re: GOOGL - Google
Post by: cayale on April 17, 2012, 07:12:03 AM
Perhaps mobile is still in the testing/experimental/tweaking stage.  Once you have proof of concept and proven ROI, prices could rise.  Hence 40% rise in clicks with lower CPC.  Just a theory.
Title: Re: GOOGL - Google
Post by: Liberty on April 17, 2012, 07:28:06 AM
Perhaps mobile is still in the testing/experimental/tweaking stage.  Once you have proof of concept and proven ROI, prices could rise.  Hence 40% rise in clicks with lower CPC.  Just a theory.

I think that's what it might be. It took a while for big corps to become convinced that if they spent millions on online campaigns, they would get results that are worth the expense. We might be in the same stage for online ads, with more cautious and smaller buys.
Title: Re: GOOGL - Google
Post by: cayale on April 17, 2012, 07:43:12 AM
Because sooner or later sales will start declining if CPCs and CTRs keep declining. I have argued that once Facebook goes public, they will rev up their monetization engine. This brings an increased supply of channels/ads into the marketplace and will reduce ad rates. Looks like this is already happening:

http://techcrunch.com/2012/04/16/facebook-cpc

I think there's some merit to this, too, over the longer term.  The platforms with critical mass and density should do OK, though, as long as they keep up technologically (which is what makes the business tough).
Title: Re: GOOGL - Google
Post by: Liberty on April 17, 2012, 10:53:32 AM
Big GOOG infrastructure change:

http://www.wired.com/wiredenterprise/2012/04/going-with-the-flow-google/

Quote
Though Google says it’s too soon to get a measurement of the benefits, Hölzle does confirm that they are considerable. “Soon we will able to get very close to 100 percent utilization of our network,” he says. In other words, all the lanes in Google’s humongous internal data highway can be occupied, with information moving at top speed. The industry considers thirty or forty percent utilization a reasonable payload — so this implementation is like boosting network capacity two or three times. (This doesn’t apply to the user-facing network, of course.)
Title: Re: GOOGL - Google
Post by: DCG on April 17, 2012, 02:49:01 PM
We got a Asus Transformer tablet running Android Ice Cream Sandwich here at work for troubleshooting purposes. I've been playing around with it a bit over the last few days and am pretty unimpressed overall with Ice Cream Sandwich. There are some good things about it, but there are somethings that im not sure why they changed from older versions of android.I find it pretty unintuitive, and it seems like people new to Android may be confused by it.

Title: Re: GOOGL - Google
Post by: jeffmori7 on April 17, 2012, 06:10:08 PM
Liberty, thank you for the link, it was a very interesting reading. I appreciate you take the time to share such kind of articles.
Title: Re: GOOGL - Google
Post by: meiroy on April 17, 2012, 07:16:45 PM
Big GOOG infrastructure change:

http://www.wired.com/wiredenterprise/2012/04/going-with-the-flow-google/

Quote
Though Google says it’s too soon to get a measurement of the benefits, Hölzle does confirm that they are considerable. “Soon we will able to get very close to 100 percent utilization of our network,” he says. In other words, all the lanes in Google’s humongous internal data highway can be occupied, with information moving at top speed. The industry considers thirty or forty percent utilization a reasonable payload — so this implementation is like boosting network capacity two or three times. (This doesn’t apply to the user-facing network, of course.)

Very impressive.

And a followup to this new capability:
http://thenextweb.com/google/2012/04/16/google-drive-detailed-5-gb-for-free-launching-next-week-for-mac-windows-android-and-ios/?awesm=tnw.to_1E3xU&utm_campaign=social%20media&utm_medium=Spreadus&utm_source=Facebook&utm_content=Google%20Drive%20detailed:%205%20GB%20for%20free,%20launching%20next%20week%20for%20Mac,%20Windows,%20Android%20and%20iOS (http://thenextweb.com/google/2012/04/16/google-drive-detailed-5-gb-for-free-launching-next-week-for-mac-windows-android-and-ios/?awesm=tnw.to_1E3xU&utm_campaign=social%20media&utm_medium=Spreadus&utm_source=Facebook&utm_content=Google%20Drive%20detailed:%205%20GB%20for%20free,%20launching%20next%20week%20for%20Mac,%20Windows,%20Android%20and%20iOS)

"Google Drive detailed: 5 GB for free, launching next week for Mac, Windows Android and iOS"


Title: Re: GOOGL - Google
Post by: VAL9000 on April 21, 2012, 07:31:07 AM
It looks like GOOG is really cheap right now.  Market cap, $193 bn.  Cash on hand, $50 bn.  You could buy the whole company for $143 bn giving a P/E of 12.5 based on last quarter's earnings.  Keep in mind those earnings rose by 14% from 2010 to 2011 - a year of "transition" for Google.  Q1 2012 earnings are up 60% over Q1 2011 and up 6.8% over Q4 2012. 

Even after the MMI deal closes, we're still looking at a P/E of 13.5 after taking out the $12.5 bn cash for Motorola.

I will be buying more GOOG at this price.
Title: Re: GOOGL - Google
Post by: rranjan on April 21, 2012, 10:16:12 AM
It looks like GOOG is really cheap right now.  Market cap, $193 bn.  Cash on hand, $50 bn.  You could buy the whole company for $143 bn giving a P/E of 12.5 based on last quarter's earnings.  Keep in mind those earnings rose by 14% from 2010 to 2011 - a year of "transition" for Google.  Q1 2012 earnings are up 60% over Q1 2011 and up 6.8% over Q4 2012. 

Even after the MMI deal closes, we're still looking at a P/E of 13.5 after taking out the $12.5 bn cash for Motorola.

I will be buying more GOOG at this price.

Should we back out the cash 100% for Google?
Title: Re: GOOGL - Google
Post by: bargainman on April 21, 2012, 08:04:40 PM
Remember that some part of that cash stash is overseas, so not accessible unless they pay the repatriation tax, which from what I've read doesn't seem as bad as the corporations make it out to be.  Or at least no different than it is for personal taxes.  You get a tax credit for the foreign taxes, then you pay the difference.  Still, chances are they won't bring it back or can't without a hit to the balance.  I'm not sure how much of it is overseas in the case of goog.
Title: Re: GOOGL - Google
Post by: valueInv on April 25, 2012, 03:58:46 PM
Google's own Android revenues and projections:

http://news.cnet.com/8301-1035_3-57421363-94/is-android-critical-to-google/

I guess this settles one part of the debate about how much money Google can make from Android.
In 2011, their planned Android revenue was 1.35% of their actual total revenue. Historically, they have
 been making less than half their target. (You can see them lowering their target.) It is likely that their
actual 2011 Android rev formed a smaller portion of their total revenues.

This also does not take cannibalization of desktop revenues into consideration.
Title: Re: GOOGL - Google
Post by: ExpectedValue on April 25, 2012, 05:11:28 PM
Google's own Android revenues and projections:

http://news.cnet.com/8301-1035_3-57421363-94/is-android-critical-to-google/

I guess this settles one part of the debate about how much money Google can make from Android.
In 2011, their planned Android revenue was 1.35% of their actual total revenue. Historically, they have
 been making less than half their target. (You can see them lowering their target.) It is likely that their
actual 2011 Android rev formed a smaller portion of their total revenues.

This also does not take cannibalization of desktop revenues into consideration.

I don't think they really care about making money off of Android directly. It's irrelevant to them. They just want smartphones to be accessing the internet so that they can get exposed to Google's ads.
Title: Re: GOOGL - Google
Post by: valueInv on April 25, 2012, 05:35:18 PM
Google's own Android revenues and projections:

http://news.cnet.com/8301-1035_3-57421363-94/is-android-critical-to-google/

I guess this settles one part of the debate about how much money Google can make from Android.
In 2011, their planned Android revenue was 1.35% of their actual total revenue. Historically, they have
 been making less than half their target. (You can see them lowering their target.) It is likely that their
actual 2011 Android rev formed a smaller portion of their total revenues.

This also does not take cannibalization of desktop revenues into consideration.

I don't think they really care about making money off of Android directly. It's irrelevant to them. They just want smartphones to be accessing the internet so that they can get exposed to Google's ads.
How is that different from an iPhone user being exposed to Google's ads? Google is currently the default search engine for the iPhone and also iPhone users visit the same sites with Google's display ads that Android users do. So why invest a enormous amount of money and managerial attention if they
could make almost the same money by simply being the search provider for IOS?
Title: Re: GOOGL - Google
Post by: ExpectedValue on April 25, 2012, 06:54:00 PM
Google's own Android revenues and projections:

http://news.cnet.com/8301-1035_3-57421363-94/is-android-critical-to-google/

I guess this settles one part of the debate about how much money Google can make from Android.
In 2011, their planned Android revenue was 1.35% of their actual total revenue. Historically, they have
 been making less than half their target. (You can see them lowering their target.) It is likely that their
actual 2011 Android rev formed a smaller portion of their total revenues.

This also does not take cannibalization of desktop revenues into consideration.

I don't think they really care about making money off of Android directly. It's irrelevant to them. They just want smartphones to be accessing the internet so that they can get exposed to Google's ads.
How is that different from an iPhone user being exposed to Google's ads? Google is currently the default search engine for the iPhone and also iPhone users visit the same sites with Google's display ads that Android users do. So why invest a enormous amount of money and managerial attention if they
could make almost the same money by simply being the search provider for IOS?

What defines an "enormous" amount of money?

They spent $50mm acquiring Android back in 2005 and the maintenance/future development of Android is currently an open source project.

Google generated $14bn in operating cashflow in 2011, I think the amount of that that is spent maintaining/developing android is a truly small percentage as they're mainly staffing some developers to work on it while also benefiting from the contributions of the open source community.

Why do it at all? That's easy - they realize that mobile is going to be the future of browsing which would directly affect their business as an advertiser. By having a stake in that future they could help shape and direct the way it goes, rather than being dictated terms by other players in the space (like Apple).

But that's the key thing to keep in mind -- Apple needs to make money off of their hardware sales because that's what they are, a hardware company. Google doesn't. It's in Google's interest to amass as much marketshare as possible (which is why there are so many different Android devices), even it's at the expense of profit margins, because it enables them to keep getting mobile users to look at/click on ads.
Title: Re: GOOGL - Google
Post by: valueInv on April 26, 2012, 01:32:10 PM


What defines an "enormous" amount of money?

They spent $50mm acquiring Android back in 2005 and the maintenance/future development of Android is currently an open source project.

How about $12.5B for Motorola for patents to defend Android. By the looks of it, Motorola is fast losing share and money. If they follow their hands off strategy, they're not going to make their investment back.

What about the 1000 patents from IBM?

Here's a list of their acquisitions:

http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google

By that count, they've acquired 10+ startups for Android. How much did they pay for those?

Android may be positioned as open source, but the development burden is fully borne by Google and is not free. All it means is that you can download the source code once its released and modify it.

Google generated $14bn in operating cashflow in 2011, I think the amount of that that is spent maintaining/developing android is a truly small percentage as they're mainly staffing some developers to work on it while also benefiting from the contributions of the open source community.

Again, the development of Android is closed. People outside don't even know what features are going to be included in the next version let alone contribute code to it.

How do you account for the legal costs and the fact that their top management is spending most of this month in court defending Android? Android has a lot of costs involved other than the team of engineers developing it.

Why do it at all? That's easy - they realize that mobile is going to be the future of browsing which would directly affect their business as an advertiser. By having a stake in that future they could help shape and direct the way it goes, rather than being dictated terms by other players in the space (like Apple).

But that's the key thing to keep in mind -- Apple needs to make money off of their hardware sales because that's what they are, a hardware company. Google doesn't. It's in Google's interest to amass as much marketshare as possible (which is why there are so many different Android devices), even it's at the expense of profit margins, because it enables them to keep getting mobile users to look at/click on ads.
Thats the story that management is spinning. People see the same ads on the iPhone, go to the same sites and perform searches on the iPhone too. Apple was not interested in the advertising business until Google entered the mobile business.

It sounds great that they want to control their own future - except that they are not making money doing it. If Coke finds that a significant part of their output is being sold at Seven Elevens should they buy them? What is the downside to that?

Google's advertising is orthogonal to the device for the most part. They depend more on being the dominant search provider and on having publishers on their platform. That is why 2/3rds of their mobile advertising revenue comes from Apple despite selling more Android devices.
Title: Re: GOOGL - Google
Post by: valueInv on April 26, 2012, 01:36:11 PM
More Android numbers at the bottom:

http://www.theverge.com/2012/4/25/2974909/google-wanted-to-sell-10m-android-tablets-a-year-in-2011-have-33-percent-marketshare

Suffice it to say, they are at about half of what they projected.
Title: Re: GOOGL - Google
Post by: rkbabang on April 27, 2012, 07:04:56 AM
Google, automakers in talks on self-driving cars (http://www.detroitnews.com/article/20120425/AUTO01/204250391/1148/rss25)


"Google could make an announcement as early as next year on when it might offer the self-driving technology"

"All options are open. From giving the technology away to licensing it to working with Tier 1s, Tier 2s, working with the OEMs, building a car with them, everything is open and we're trying to figure out which paths make the most sense,"


I'm wondering how google makes money from this, especially if they give it away for free.  It is awesome though.
Title: Re: GOOGL - Google
Post by: VAL9000 on April 27, 2012, 07:23:36 AM
I'm wondering how google makes money from this, especially if they give it away for free.  It is awesome though.

If you're not driving, you have plenty of time to watch ads ;)

That comment is really only half in jest.  Part of the deal could be, if you run our free self-driving car tech, then Android runs the in-car hardware (touch displays, hotspots, etc.)

I think Google is in a philosophical struggle when it comes to going to market with some of their products.  On one hand, they really love free and they're very good at making money on free.  On the other hand, some things just work better as pay-to-play.  They're gaining some knowledge with Google Apps for Business, but I think that whole model is both uncomfortable and secondary for them.  Maybe they just need to realize that charging for things doesn't make you evil.
Title: Re: GOOGL - Google
Post by: Rabbitisrich on April 27, 2012, 07:33:44 AM
Touch display advertisements mid-transit sounds dangerous. It would be interesting to integrate Pandora/Spotify/Sirius type services to provide discounts and such when you approach participating stores.

One day we might see neighborhoods effectively compete for drivers through the "radio" and "cell phones" (whatever form they take in the future).
Title: Re: GOOGL - Google
Post by: txlaw on May 01, 2012, 09:14:23 AM
I'm not sure if this has been posted:
http://news.cnet.com/8301-1035_3-57421363-94/android-not-critical-to-google-really/

The slides demonstrate why Android is important to GOOG. 
Title: Re: GOOGL - Google
Post by: VAL9000 on May 01, 2012, 01:16:55 PM
I'm not sure if this has been posted:
http://news.cnet.com/8301-1035_3-57421363-94/android-not-critical-to-google-really/

The slides demonstrate why Android is important to GOOG.

tx, thanks for posting.  This is an interesting article.  I think the author did himself a disservice by saying that Android is critical to Google's success.  Your description of "important" is more accurate.  Critical implies that if you don't have it, you will fail.  When I look at these projected revenue numbers for 2013 (34bn search, 8bn display, 5bn video, 5bn commerce, and 2bn enterprise), I don't see Android as a critical component for any of them except commerce, where you need a mobile platform to lift revenue from payments (NFC or downloadable content).

The rest of the elements require active participation to achieve success in the mobile delivery of that category, but don't actually require control of a mobile platform.  Kind of like how Google was successful in web-based advertising before they had a browser or an operating system.  Maybe that's a broken analogy but it seems suitable based on how I understand "web" versus "mobile"

Title: Re: GOOGL - Google
Post by: txlaw on May 01, 2012, 03:47:32 PM
I'm not sure if this has been posted:
http://news.cnet.com/8301-1035_3-57421363-94/android-not-critical-to-google-really/

The slides demonstrate why Android is important to GOOG.

tx, thanks for posting.  This is an interesting article.  I think the author did himself a disservice by saying that Android is critical to Google's success.  Your description of "important" is more accurate.  Critical implies that if you don't have it, you will fail.  When I look at these projected revenue numbers for 2013 (34bn search, 8bn display, 5bn video, 5bn commerce, and 2bn enterprise), I don't see Android as a critical component for any of them except commerce, where you need a mobile platform to lift revenue from payments (NFC or downloadable content).

The rest of the elements require active participation to achieve success in the mobile delivery of that category, but don't actually require control of a mobile platform.  Kind of like how Google was successful in web-based advertising before they had a browser or an operating system.  Maybe that's a broken analogy but it seems suitable based on how I understand "web" versus "mobile"

Val, I wouldn't necessarily call Android "critical" to success on an absolute basis, but I do think it was "critical" in the sense that without Android, GOOG would probably make much less money going forward relative to its current competitive positioning.  I am looking at Android from a defensive strategy perspective.

GOOG has always understood that true platform providers can enjoy a position in the value chain that is hard to beat because once you get tons of developers and users buying into your ecosystem, not only do you get stickiness of users/developers and pricing power, but you also become a gatekeeper of sorts where you can extract tolls for key services or even bar certain services from crossing your bridge.  There is a reason why Bill Gates -- one of the smartest businessmen out there -- was in the platform biz.

The threat to GOOG has always been that some platform provider (think Mr. Softie) would grab a material percentage of the  market and cut GOOG out of the picture for an extended period of time, perhaps by teaming up with a rival to provide competing services (e.g., Yahoo) or developing their own competing services that would be baked into the platform (e.g., making Bing or Bing maps the defauls on Win phones).  Thus, GOOG could potentially be foregoing a substantial amount of revenue  both in the near future and the long term by letting someone who had different interests gain a position in this naturally oligopolistic market.

It is true that from the very beginning, Apple was more than happy to work with GOOG so that GOOG's services would be available on iOS devices and so that Apple/Google could throw a one-two punch against MSFT.  However, as we all know, Apple's approach to its iOS platform is closed or curated, and they initially targeted higher end users who could afford the integrated product.  This meant that there was an opening for someone else to take market share through the development of an open platform or semi-open platform that could work on multiple hardware devices.  MSFT would have been the natural company to step into those shoes.

So my take is that GOOG had to head MSFT off at the pass and prevent them from establishing a toehold in the market, thereby giving Mr. Softie an in for selling their own search/advertising services, augmented reality services, and infrastructure services, and picking and choosing which content providers would have best access to end users.  Or they had to head off some other MSFT-friendly competitor that would have teamed up with MSFT to extract as much value as possible from the market opportunity.

Title: Re: GOOGL - Google
Post by: valueInv on May 01, 2012, 04:54:21 PM
Motorola continues to lose money, devices shipped show a steady decline:

http://venturebeat.com/2012/05/01/motorola-earnings-q1-2012/
Title: Re: GOOGL - Google
Post by: VAL9000 on May 01, 2012, 05:43:06 PM
Val, I wouldn't necessarily call Android "critical" to success on an absolute basis, but I do think it was "critical" in the sense that without Android, GOOG would probably make much less money going forward relative to its current competitive positioning.  I am looking at Android from a defensive strategy perspective.

GOOG has always understood that true platform providers can enjoy a position in the value chain that is hard to beat because once you get tons of developers and users buying into your ecosystem, not only do you get stickiness of users/developers and pricing power, but you also become a gatekeeper of sorts where you can extract tolls for key services or even bar certain services from crossing your bridge.  There is a reason why Bill Gates -- one of the smartest businessmen out there -- was in the platform biz.

The threat to GOOG has always been that some platform provider (think Mr. Softie) would grab a material percentage of the  market and cut GOOG out of the picture for an extended period of time, perhaps by teaming up with a rival to provide competing services (e.g., Yahoo) or developing their own competing services that would be baked into the platform (e.g., making Bing or Bing maps the defauls on Win phones).  Thus, GOOG could potentially be foregoing a substantial amount of revenue  both in the near future and the long term by letting someone who had different interests gain a position in this naturally oligopolistic market.

It is true that from the very beginning, Apple was more than happy to work with GOOG so that GOOG's services would be available on iOS devices and so that Apple/Google could throw a one-two punch against MSFT.  However, as we all know, Apple's approach to its iOS platform is closed or curated, and they initially targeted higher end users who could afford the integrated product.  This meant that there was an opening for someone else to take market share through the development of an open platform or semi-open platform that could work on multiple hardware devices.  MSFT would have been the natural company to step into those shoes.

So my take is that GOOG had to head MSFT off at the pass and prevent them from establishing a toehold in the market, thereby giving Mr. Softie an in for selling their own search/advertising services, augmented reality services, and infrastructure services, and picking and choosing which content providers would have best access to end users.  Or they had to head off some other MSFT-friendly competitor that would have teamed up with MSFT to extract as much value as possible from the market opportunity.

This is probably the most astute analysis of "why Android" that I've ever come across.  Thanks for sharing it. 

One of my closely held beliefs in this space is that open tends to beat closed.  Therefore, in the long-run, I think the need for Android wouldn't be considered critical to combat these scenarios, but I can certainly appreciate investing in Android to ensure that "the long-run" doesn't become "the really, really long run".  Whether or not that's worth 15 billion bucks could be argued..  but who has time to argue over $15 bn ? ;)
Title: Re: GOOGL - Google
Post by: Liberty on May 12, 2012, 08:53:04 PM
http://www.slate.com/articles/technology/technology/2012/05/google_vs_bing_i_switched_to_microsoft_s_search_engine_for_a_week_here_s_what_happened_.html
Title: Re: GOOGL - Google
Post by: Shane on May 13, 2012, 10:13:37 AM
Liberty - GREAT article!

It is my opinion that aesthetic changes are the easiest to fix, I am much less worried about that than the information that the engine is collecting.  Public perception and information collection could be difficult things to manage, however, I think the information and the way google is using it is leaps and bounds ahead of their competitors and this is the competitive advantage.  I keep the position small but do like the company quite a bit.
Title: Re: GOOGL - Google
Post by: bargainman on May 13, 2012, 11:43:20 AM
Liberty - GREAT article!

It is my opinion that aesthetic changes are the easiest to fix, I am much less worried about that than the information that the engine is collecting.  Public perception and information collection could be difficult things to manage, however, I think the information and the way google is using it is leaps and bounds ahead of their competitors and this is the competitive advantage.  I keep the position small but do like the company quite a bit.

Right.. so the fact that Bing is integrating with facebook and twitter is more of a threat...

http://news.cnet.com/8301-10805_3-57431224-75/bing-deepens-facebook-integration-connecting-searchers-with-friends/?tag=mncol;3n
Title: Re: GOOGL - Google
Post by: Shane on May 13, 2012, 12:03:32 PM
Could be.  I think that Google's algorithmn will stay ahead of Bing's and users will stay with what gives them the best search results.
Title: Re: GOOGL - Google
Post by: valueInv on May 22, 2012, 10:00:43 PM
Google's legal troubles continue :

http://arstechnica.com/tech-policy/2012/05/european-regulators-offer-google-chance-to-settle-antitrust-violations/


http://www.techdirt.com/blog/wireless/articles/20120518/15450818977/itc-sides-with-microsoft-over-patent-motorola-android-phones-could-be-banned.shtml
Title: Re: GOOGL - Google
Post by: meiroy on May 23, 2012, 01:13:27 AM

"http://mashable.com/2012/05/22/guy-kawasaki-google-plus/ (http://mashable.com/2012/05/22/guy-kawasaki-google-plus/)

"Guy Kawasaki Compares Google+ to Apple, Calls it a ‘Religious Experience

“When I saw Macintosh for the first time it was somewhat of a religious experience for me,” said Kawasaki during a talk at the Google+ Photographer’s Conference Tuesday. “Fast forward about 25 years and I had a second religious experience — which is when I saw Google+ for the first time” "
Title: Re: GOOGL - Google
Post by: jeffmori7 on May 23, 2012, 02:18:40 PM
So it's done, Motorola is now a Google division :

http://www.businessweek.com/articles/2012-05-22/its-official-google-is-now-a-hardware-company#p1
Title: Re: GOOGL - Google
Post by: Liberty on May 23, 2012, 07:44:13 PM
http://www.google.com/hostednews/ap/article/ALeqM5jvmL14diIBVB9Mehb3yfYqRVb-VA?docId=1cd9a80e03ca40c38d87f216b8d550fe

Quote
SAN FRANCISCO (AP) — A federal jury ruled Wednesday that Google didn't infringe on Oracle's patents when the Internet search leader developed its popular Android software for mobile devices.
Wednesday's verdict comes about two weeks after the same jury, with two additional members, failed to agree on a pivotal issue in Oracle's copyright-infringement case against Google. As a result, Google Inc. faced maximum damages of only $150,000 — not the hundreds of millions of dollars that Oracle Corp. was seeking.
Title: Re: GOOGL - Google
Post by: valueInv on May 31, 2012, 05:27:49 PM
Google & partners in the FTC crosshairs:

http://gigaom.com/2012/05/31/ftc-enormously-concerned-about-some-mobile-patent-tactics
Title: Re: GOOGL - Google
Post by: Liberty on May 31, 2012, 08:10:08 PM
http://www.groklaw.net/article.php?story=20120531172522459

Quote
We have just received the news that Judge Alsup ruled against Oracle, finding that APIs are not subject to copyright protection.
Title: Re: GOOGL - Google
Post by: Liberty on June 05, 2012, 10:50:52 AM
"Oracle has paid Google more in legal fees than it could win in damages"

http://news.techeye.net/business/oracles-google-java-show-trial-cost-more-than-it-couldve-won
Title: Re: GOOGL - Google
Post by: valueInv on June 05, 2012, 01:45:34 PM
Remember, the majority of Google's mobile revenues are from IOS:

http://online.wsj.com/article_email/SB10001424052702304543904577398502695522974-lMyQjAxMTAyMDAwNDEwNDQyWj.html
Title: Re: GOOGL - Google
Post by: Liberty on June 05, 2012, 02:10:03 PM
Remember, the majority of Google's mobile revenues are from IOS:

http://online.wsj.com/article_email/SB10001424052702304543904577398502695522974-lMyQjAxMTAyMDAwNDEwNDQyWj.html

Absolutely. The map change certainly is bad for Google, and Apple's control of that platform gives them a lot of power. Things would be much worse if Android didn't exist, though.
Title: Re: GOOGL - Google
Post by: jeffmori7 on June 05, 2012, 02:13:56 PM
Remember, the majority of Google's mobile revenues are from IOS:

http://online.wsj.com/article_email/SB10001424052702304543904577398502695522974-lMyQjAxMTAyMDAwNDEwNDQyWj.html

Absolutely. The map change certainly is bad for Google, and Apple's control of that platform gives them a lot of power. Things would be much worse if Android didn't exist, though.


This is not good for Google for sure, but to my knowledge, Apple doesn't have a search engine yet!

edit: I inserted the bad quote..
Title: Re: GOOGL - Google
Post by: valueInv on June 05, 2012, 03:56:57 PM
Remember, the majority of Google's mobile revenues are from IOS:

http://online.wsj.com/article_email/SB10001424052702304543904577398502695522974-lMyQjAxMTAyMDAwNDEwNDQyWj.html

Absolutely. The map change certainly is bad for Google, and Apple's control of that platform gives them a lot of power. Things would be much worse if Android didn't exist, though.

If there was no Android:
 1, Google would have $14B more cash in the bank
 2, They would have had free regin all advertising and other service revenue on IOS

How is that worse? Now they face the risk of Apple replacing Google with Bing as the default search engine.
Title: Re: GOOGL - Google
Post by: valueInv on June 05, 2012, 03:59:41 PM
"Oracle has paid Google more in legal fees than it could win in damages"

http://news.techeye.net/business/oracles-google-java-show-trial-cost-more-than-it-couldve-won

This is not good for Google for sure, but to my knowledge, Apple doesn't have a search engine yet!

They don't have a search engine but they're building an "answer" engine which obviates search - Siri
Title: Re: GOOGL - Google
Post by: jeffmori7 on June 05, 2012, 04:11:00 PM
But I'm certain Siri is relying on the powerful search engine (aka Google) to get answers to a lot of questions though...but the question would be, could you still monetize ads this way?
Title: Re: GOOGL - Google
Post by: valueInv on June 05, 2012, 04:27:16 PM
But I'm certain Siri is relying on the powerful search engine (aka Google) to get answers to a lot of questions though...but the question would be, could you still monetize ads this way?
Today, Siri uses Wolfram Alpha to answer queries and falls back to Google if Wolfram cannot address the query. Over time, it will add more and more services that are able to provide better information than a search engine. For example, it will use the services to the Yelp app when asked for restaurant review without using a search engine. Expect some big announcements in this direction next week.

Siri could be monetized with ads but I doubt Apple is interested in doing it in a big way. There are many, many other avenues for monetization. For example, Apple could get a cut of the dinner reservations made through Siri. 
Title: Re: GOOGL - Google
Post by: valueInv on June 07, 2012, 09:54:24 AM
Little by little...:

http://www.bloomberg.com/news/2012-06-07/apple-said-to-add-baidu-as-iphone-search-engine-in-china.html
Title: Re: GOOGL - Google
Post by: Liberty on June 07, 2012, 10:04:03 AM
Little by little...:

http://www.bloomberg.com/news/2012-06-07/apple-said-to-add-baidu-as-iphone-search-engine-in-china.html

That's not a surprise, though, Baidu is the main search engine in China and Google isn't exactly a friend of the government because they won't censor everything the way they want.
Title: Re: GOOGL - Google
Post by: rkbabang on June 07, 2012, 12:19:07 PM
Little by little...:
http://www.bloomberg.com/news/2012-06-07/apple-said-to-add-baidu-as-iphone-search-engine-in-china.html
That's not a surprise, though, Baidu is the main search engine in China and Google isn't exactly a friend of the government because they won't censor everything the way they want.


"Google could anger Beijing by pointing out individual terms that might produce blocked results ... A Google spokesman declined to comment on whether the company was concerned about Chinese government retaliation."

Google helps Chinese avoid censorship (http://www.usatoday.com/tech/news/story/2012-06-01/google-china-censorship/55326416/1)

Looks like Apple on the other hand has no qualms about cozying up to tyranny.
Title: Re: GOOGL - Google
Post by: valueInv on June 11, 2012, 08:58:35 PM
But I'm certain Siri is relying on the powerful search engine (aka Google) to get answers to a lot of questions though...but the question would be, could you still monetize ads this way?
Today, Siri uses Wolfram Alpha to answer queries and falls back to Google if Wolfram cannot address the query. Over time, it will add more and more services that are able to provide better information than a search engine. For example, it will use the services to the Yelp app when asked for restaurant review without using a search engine. Expect some big announcements in this direction next week.

Siri could be monetized with ads but I doubt Apple is interested in doing it in a big way. There are many, many other avenues for monetization. For example, Apple could get a cut of the dinner reservations made through Siri.

I think Apple's intentions on Google are clear:

http://online.wsj.com/article/SB10001424052702303768104577460244284627170.html
Title: Re: GOOGL - Google
Post by: valueInv on June 12, 2012, 09:33:56 AM
http://arstechnica.com/gadgets/2012/06/itc-rejects-googles-patent-loan-to-htc/

So Google can use its patents to help the Android companies that are getting sued. Is this why they bought Motorola in the first place?
Title: Re: GOOGL - Google
Post by: valueInv on June 13, 2012, 06:17:16 PM
Facebook extend its advertising tentacles:

http://gigaom.com/2012/06/13/facebook-preps-facebook-exchange-for-real-time-bidding/

Could a publisher network be in the cards?
Title: Re: GOOGL - Google
Post by: valueInv on June 17, 2012, 07:22:16 PM
Updates on Google's products.

Search: http://techcrunch.com/2012/06/15/hitwise-google-us-search-share-down-5-in-the-last-year-bing-yahoo-gained

Google+: http://techcrunch.com/2012/06/15/popcap-and-wooga-pull-games-from-google/

ChomeOS: http://techcrunch.com/2012/06/15/report-googles-chromebooks-account-for-less-than-02-of-all-desktop-traffic
Title: Re: GOOGL - Google
Post by: valueInv on June 22, 2012, 04:12:24 PM
Facebook's first steps towards a publisher ad network:

http://www.latimes.com/business/technology/la-fi-tn-facebook-places-ads-on-zynga-could-an-online-ad-network-be-next-20120622,0,26508.story
Title: Re: GOOGL - Google
Post by: prunes on June 29, 2012, 10:14:32 PM
Google to put sales reps inside retail stores http://www.reddit.com/r/pics/comments/vnyxa/after_2_years_4_months_and_18_days_of_being/
Title: Re: GOOGL - Google
Post by: valueInv on July 05, 2012, 01:07:17 PM
I agree. What the ..?

http://pogue.blogs.nytimes.com/2012/07/05/the-google-nexus-q-is-baffling/?nl=technology&emc=cta2_20120705
Title: Re: GOOGL - Google
Post by: DCG on July 05, 2012, 02:00:11 PM
ChomeOS: http://techcrunch.com/2012/06/15/report-googles-chromebooks-account-for-less-than-02-of-all-desktop-traffic

Chrome OS could serve a real purpose if they focus on getting it on normal-sized desktops and laptops instead of on netbooks that nobody want.
Title: Re: GOOGL - Google
Post by: valueInv on July 11, 2012, 10:26:28 AM
Grap the popcorn, this is a price war all the way to the bottom:

http://venturebeat.com/2012/07/11/amazon-actually-testing-smartphone-in-asia-now-platform-wars-heat-up/
Title: Re: GOOGL - Google
Post by: txlaw on July 11, 2012, 12:20:30 PM
Grap the popcorn, this is a price war all the way to the bottom:

http://venturebeat.com/2012/07/11/amazon-actually-testing-smartphone-in-asia-now-platform-wars-heat-up/

Yup.  Could affect AAPL most of all.
Title: Re: GOOGL - Google
Post by: valueInv on July 11, 2012, 01:00:50 PM
Grap the popcorn, this is a price war all the way to the bottom:

http://venturebeat.com/2012/07/11/amazon-actually-testing-smartphone-in-asia-now-platform-wars-heat-up/

Yup.  Could affect AAPL most of all.

Not necessarily. AAPL still continues to grow and increase margins despite the competition. It is the Android vendors who are
suffering. Historically, AAPL has been able to maintain magins (iPods, laptops, desktops).

If Amazon succeeds, it will be even bigger fragmentation of Android. Amazon's version is likely to be very incompatible with Google's version and
not contain most of Google's services.

You have two vendors who for whom profit/margin is not a priority. Amazon is subsidizing hardware + software with content sales and Google with advertising and content sales. Amazon is way better at content and Google at ads.

We saw this same pattern playing out in the pc industry except MSFT wisely stayed out of the hardware business letting the hardware vendors battle it out. This time around hardware and software are more tied together.
Title: Re: GOOGL - Google
Post by: txlaw on July 11, 2012, 01:21:30 PM
Grap the popcorn, this is a price war all the way to the bottom:

http://venturebeat.com/2012/07/11/amazon-actually-testing-smartphone-in-asia-now-platform-wars-heat-up/

Yup.  Could affect AAPL most of all.

Not necessarily. AAPL still continues to grow and increase margins despite the competition. It is the Android vendors who are
suffering. Historically, AAPL has been able to maintain magins (iPods, laptops, desktops).

If Amazon succeeds, it will be even bigger fragmentation of Android. Amazon's version is likely to be very incompatible with Google's version and
not contain most of Google's services.

You have two vendors who for whom profit/margin is not a priority. Amazon is subsidizing hardware + software with content sales and Google with advertising and content sales. Amazon is way better at content and Google at ads.

We saw this same pattern playing out in the pc industry except MSFT wisely stayed out of the hardware business letting the hardware vendors battle it out. This time around hardware and software are more tied together.

But you are betting that the "innovation gap" will remain wide such that AAPL will be able to maintain its extraordinarily high margins in the face of competitors who are fine with razor thin margins because their real businesses are services. 

By all accounts, the new Nexus tablet and the latest galaxy are awesome, and people could easily start gravitating to those options versus Apple options.  It already appears that AAPL is being forced to put out a smaller tablet, which could cannibalize its very high margin iPad sales.

And if Surface is successful, AAPL may have to come up with a competing product that cannibalizes sales of both iPads and Macbooks. 

I don't disagree with you that AAPL will likely have the highest margins on the integrated hardware/software, but that margin could shrink going forward due to the competition heating up.  Nobody knows for sure, but it would be wise to bake that possibility into any AAPL valuation.
Title: Re: GOOGL - Google
Post by: Ross812 on July 11, 2012, 02:30:38 PM
This is a race to the bottom between Google and Amazon to put devices into peoples hands. From the beginning Google has not been trying to monetize Android in the traditional sense. They are using it to expand their internet presence, mind share, and moat. Google started out by cornering the search market,making their name synonymous with internet search. Now they are expanding their moat by trying to make their name the first thing you think about when the internet comes to mind. Amazon proved that there is a market for a tablet that is smaller and less expensive than the Ipad. This was something that the other tablet manufacturers who were trying to compete with the Ipad couldn't figure out. I think Google saw the success of the Kindle Fire and realized they could make a better more Google centric tablet for the same price. I think the race to the bottom is going to be between android tablet manufacturers now that Google followed Amazon and a small tablet market has been fully defined.

Remember Amazon marketed the Fire as a Kindle and not a tablet. The Nexus 7 is the first big release $200 tablet to hit the market. I think if the other Android manufacturers follow this trend Amazon does not stand a chance in the hardware race. Amazon has to rely on their ecosystem of books, movies, and television shows to stay relevant. Digital media is something Google has the infrastructure to imitate easily. If this goes the way I think it will, in five years, Amazon will be the go to website for parcel items and its digital services will be somewhat less relevant compared to what Google is able to offer.

Apple isn't in this fight. They will continue to produce great hardware at great margins staying one step ahead of the competition. If they slip up, and release a "windows vista", or they don't stay far enough ahead of Android, they are done. Apple cannot maintain 20%+ margins while their competition could run at 0% margins and continue to grow revenue. Investing in Apple is betting on them to stay out in front. Their margin for error is shrinking every year. If they loose a race, or don't come up with the next best thing once the smartphone market matures (after android compared to iOS becomes a Dell compared to a HPQ), I wouldn't want to be a part owner of Apple.   
Title: Re: GOOGL - Google
Post by: valueInv on July 11, 2012, 03:56:06 PM
This is a race to the bottom between Google and Amazon to put devices into peoples hands. From the beginning Google has not been trying to monetize Android in the traditional sense. They are using it to expand their internet presence, mind share, and moat. Google started out by cornering the search market,making their name synonymous with internet search. Now they are expanding their moat by trying to make their name the first thing you think about when the internet comes to mind. Amazon proved that there is a market for a tablet that is smaller and less expensive than the Ipad. This was something that the other tablet manufacturers who were trying to compete with the Ipad couldn't figure out. I think Google saw the success of the Kindle Fire and realized they could make a better more Google centric tablet for the same price. I think the race to the bottom is going to be between android tablet manufacturers now that Google followed Amazon and a small tablet market has been fully defined.

Remember Amazon marketed the Fire as a Kindle and not a tablet. The Nexus 7 is the first big release $200 tablet to hit the market. I think if the other Android manufacturers follow this trend Amazon does not stand a chance in the hardware race. Amazon has to rely on their ecosystem of books, movies, and television shows to stay relevant. Digital media is something Google has the infrastructure to imitate easily. If this goes the way I think it will, in five years, Amazon will be the go to website for parcel items and its digital services will be somewhat less relevant compared to what Google is able to offer.

Apple isn't in this fight. They will continue to produce great hardware at great margins staying one step ahead of the competition. If they slip up, and release a "windows vista", or they don't stay far enough ahead of Android, they are done. Apple cannot maintain 20%+ margins while their competition could run at 0% margins and continue to grow revenue. Investing in Apple is betting on them to stay out in front. Their margin for error is shrinking every year. If they loose a race, or don't come up with the next best thing once the smartphone market matures (after android compared to iOS becomes a Dell compared to a HPQ), I wouldn't want to be a part owner of Apple.

How long with the competition survive on 0% margins? What is likely to happen first - the competition runs out of steam or Apple screws up?
Title: Re: GOOGL - Google
Post by: Sunrider on July 12, 2012, 04:08:33 AM
Quote
But you are betting that the "innovation gap" will remain wide such that AAPL will be able to maintain its extraordinarily high margins in the face of competitors who are fine with razor thin margins because their real businesses are services. 

By all accounts, the new Nexus tablet and the latest galaxy are awesome, and people could easily start gravitating to those options versus Apple options.  It already appears that AAPL is being forced to put out a smaller tablet, which could cannibalize its very high margin iPad sales.

And if Surface is successful, AAPL may have to come up with a competing product that cannibalizes sales of both iPads and Macbooks. 

I don't disagree with you that AAPL will likely have the highest margins on the integrated hardware/software, but that margin could shrink going forward due to the competition heating up.  Nobody knows for sure, but it would be wise to bake that possibility into any AAPL valuation.

txlaw - Are you an apple user (I mean beyond an iPod, iPhone)? This is not to start a this-vs-that debate but the one thing I found over time using Apple products which most non-users or casual users don't seem to internalise, is that Apple (at least under Steve Jobs) never did a product because it felt it had to respond to some sort of competitive pressure. This is part of the reason why the products are so good. (And this runs through the products, down into things that most users never see, like programming APIs). I would hope, as a shareholder, that this cultural imperative to make good products that they want for themselves remains inculcated in the management team for a long time because once they start making products for the sake of responding to some competitor, they will lose their status as leaders, the marketing halo will vanish and it is also likely that the products will turn out to be crap. I can highly recommend the original introduction of the iPhone (you can find it on youtube) for a glimpse of how that thinking works vs. "Oh we need to sell products, so we need to look at what competitors are doing and then do the same or do it a little better to sell ...".

Part of the reason, in my view that Android did not kill the iPhone beyond the marketing cloud was that Apple simply thought the product through better from all angles. The value is not in the hardware or the operating system. The value is in the apps and they made it very easy to produce these and for customers to safely consume them. And then they gave developers a huge base by ensuring that virtually all i-products can run their software, which is not the case across different flavours/versions of Android.

This is not (yet) the case in Android and part of the reason why the 'app landscape' is dominated by i-products. Anyway, long winded message to make the point that I hope that they will NOT feel that they "have to come up with" xyz because then the growth days are probably at an end.

Cheers - C.

Title: Re: GOOGL - Google
Post by: txlaw on July 12, 2012, 09:02:58 AM
txlaw - Are you an apple user (I mean beyond an iPod, iPhone)? This is not to start a this-vs-that debate but the one thing I found over time using Apple products which most non-users or casual users don't seem to internalise, is that Apple (at least under Steve Jobs) never did a product because it felt it had to respond to some sort of competitive pressure. This is part of the reason why the products are so good. (And this runs through the products, down into things that most users never see, like programming APIs). I would hope, as a shareholder, that this cultural imperative to make good products that they want for themselves remains inculcated in the management team for a long time because once they start making products for the sake of responding to some competitor, they will lose their status as leaders, the marketing halo will vanish and it is also likely that the products will turn out to be crap. I can highly recommend the original introduction of the iPhone (you can find it on youtube) for a glimpse of how that thinking works vs. "Oh we need to sell products, so we need to look at what competitors are doing and then do the same or do it a little better to sell ...".

Part of the reason, in my view that Android did not kill the iPhone beyond the marketing cloud was that Apple simply thought the product through better from all angles. The value is not in the hardware or the operating system. The value is in the apps and they made it very easy to produce these and for customers to safely consume them. And then they gave developers a huge base by ensuring that virtually all i-products can run their software, which is not the case across different flavours/versions of Android.

This is not (yet) the case in Android and part of the reason why the 'app landscape' is dominated by i-products. Anyway, long winded message to make the point that I hope that they will NOT feel that they "have to come up with" xyz because then the growth days are probably at an end.

Cheers - C.

I own an iPhone, iPad, and 15" matte-screen Macbook Pro.  I also own a Boxee box, which is way better than AppleTV, though still pretty buggy, and a PS3.  I am not an Apple fanboy, so if I find I product I like better than an Apple one, I will buy it.

My point was not that Apple needs to respond due solely to competitive pressure, but rather that Apple products are no longer the only game in town because their competitors are releasing highly comparable products and because there are new innovative designs (smaller tablets, hybrid tablets/desktops) that could take away Apple sales or reduce gross margins if they don't come up with competing designs.   

In my opinion, the value that AAPL provides is in the AAPL OS (iOS and OSX), which is spread across multiple devices.  Indeed, the ultimate value a complex OS provides to society is, of course, the ecosystem (read: apps) it supports.  So I wouldn't at all put it the way you have. 

As for Apple domination of the app landscape, that will be a thing of the past.  Yes, Apple was a first mover with an amazing product -- so it now has the most apps.  I'm gonna go out on a limb here and say that Apple likely will not dominate the app ecosystem for all of time, much less the next decade.  Developers will develop apps for Android and Windows.  There will also be a movement to make it much easier for developers to develop apps that work across platforms.  In such a world, Apple's competitive advantage will be design, not the number of apps it already has available.
Title: Re: GOOGL - Google
Post by: valueInv on July 12, 2012, 10:29:01 AM
Quote
But you are betting that the "innovation gap" will remain wide such that AAPL will be able to maintain its extraordinarily high margins in the face of competitors who are fine with razor thin margins because their real businesses are services. 

By all accounts, the new Nexus tablet and the latest galaxy are awesome, and people could easily start gravitating to those options versus Apple options.  It already appears that AAPL is being forced to put out a smaller tablet, which could cannibalize its very high margin iPad sales.

And if Surface is successful, AAPL may have to come up with a competing product that cannibalizes sales of both iPads and Macbooks. 

I don't disagree with you that AAPL will likely have the highest margins on the integrated hardware/software, but that margin could shrink going forward due to the competition heating up.  Nobody knows for sure, but it would be wise to bake that possibility into any AAPL valuation.

txlaw - Are you an apple user (I mean beyond an iPod, iPhone)? This is not to start a this-vs-that debate but the one thing I found over time using Apple products which most non-users or casual users don't seem to internalise, is that Apple (at least under Steve Jobs) never did a product because it felt it had to respond to some sort of competitive pressure. This is part of the reason why the products are so good. (And this runs through the products, down into things that most users never see, like programming APIs). I would hope, as a shareholder, that this cultural imperative to make good products that they want for themselves remains inculcated in the management team for a long time because once they start making products for the sake of responding to some competitor, they will lose their status as leaders, the marketing halo will vanish and it is also likely that the products will turn out to be crap. I can highly recommend the original introduction of the iPhone (you can find it on youtube) for a glimpse of how that thinking works vs. "Oh we need to sell products, so we need to look at what competitors are doing and then do the same or do it a little better to sell ...".

Part of the reason, in my view that Android did not kill the iPhone beyond the marketing cloud was that Apple simply thought the product through better from all angles. The value is not in the hardware or the operating system. The value is in the apps and they made it very easy to produce these and for customers to safely consume them. And then they gave developers a huge base by ensuring that virtually all i-products can run their software, which is not the case across different flavours/versions of Android.

This is not (yet) the case in Android and part of the reason why the 'app landscape' is dominated by i-products. Anyway, long winded message to make the point that I hope that they will NOT feel that they "have to come up with" xyz because then the growth days are probably at an end.

Cheers - C.

+1. You're right about the apps and the ecosystem. Amazon is creating a completely different ecosystem including OS, app store, content,etc from Google. This only fragments Android more and weakens the ecosystem. From an app developer perspective, it makes Android that much more unattractive and more complex and expensive to support.

For example, take a look at this device:

http://www.youtube.com/watch?v=o3zHpzYWnGQ&feature=player_embedded

On Android, whci tablet would you build it for ? Nexus 7?Kindle Fire? Samsung Tab?

None of these have enough sales comparable to the iPad to justify an investment.
Title: Re: GOOGL - Google
Post by: Sunrider on July 12, 2012, 12:01:16 PM
txlaw - I do agree that the products are becoming increasingly comparable but I wouldn't want to handicap the app space (the next respondent made the point well enough ... so we'll see how fast this all happens). Anyway, as I said, no intention to get into a fanboy this-vs-that debate (and yes, there sure are products that do some things better than the respective apple counterpart). Neither was I arguing against google or amazon :) rather for my hope that Apple won't go into the mode that you had described because then my investment in that firm will no longer be a good one.

Cheers - C.
Title: Re: GOOGL - Google
Post by: Ross812 on July 12, 2012, 01:02:32 PM
This is a race to the bottom between Google and Amazon to put devices into peoples hands. From the beginning Google has not been trying to monetize Android in the traditional sense. They are using it to expand their internet presence, mind share, and moat. Google started out by cornering the search market,making their name synonymous with internet search. Now they are expanding their moat by trying to make their name the first thing you think about when the internet comes to mind. Amazon proved that there is a market for a tablet that is smaller and less expensive than the Ipad. This was something that the other tablet manufacturers who were trying to compete with the Ipad couldn't figure out. I think Google saw the success of the Kindle Fire and realized they could make a better more Google centric tablet for the same price. I think the race to the bottom is going to be between android tablet manufacturers now that Google followed Amazon and a small tablet market has been fully defined.

Remember Amazon marketed the Fire as a Kindle and not a tablet. The Nexus 7 is the first big release $200 tablet to hit the market. I think if the other Android manufacturers follow this trend Amazon does not stand a chance in the hardware race. Amazon has to rely on their ecosystem of books, movies, and television shows to stay relevant. Digital media is something Google has the infrastructure to imitate easily. If this goes the way I think it will, in five years, Amazon will be the go to website for parcel items and its digital services will be somewhat less relevant compared to what Google is able to offer.

Apple isn't in this fight. They will continue to produce great hardware at great margins staying one step ahead of the competition. If they slip up, and release a "windows vista", or they don't stay far enough ahead of Android, they are done. Apple cannot maintain 20%+ margins while their competition could run at 0% margins and continue to grow revenue. Investing in Apple is betting on them to stay out in front. Their margin for error is shrinking every year. If they loose a race, or don't come up with the next best thing once the smartphone market matures (after android compared to iOS becomes a Dell compared to a HPQ), I wouldn't want to be a part owner of Apple.

How long with the competition survive on 0% margins? What is likely to happen first - the competition runs out of steam or Apple screws up?

Google can survive forever at 0% margins because selling hardware is not their revenue generator. Other android manufacturers can survive on razor thin margins like the desktop industry. For the last five years Apple has stayed ahead of the competition and maintained margins by having a better product, but you are starting to see android catch up. Apple has already been forced to create their own navigation system to stay maintain their position, and there are rumors they are producing a mini Ipad. The competition won't run out of steam because they are in a different arms race than Apple. Apple is making money selling high priced luxury cars. Google is making money by giving away cars at cost then tolling all the cars on the road. The problem for Apple is their luxury Lexus is starting to look very similar to the Google Nexus at half the price.     
Title: Re: GOOGL - Google
Post by: txlaw on July 12, 2012, 04:39:53 PM
txlaw - I do agree that the products are becoming increasingly comparable but I wouldn't want to handicap the app space (the next respondent made the point well enough ... so we'll see how fast this all happens). Anyway, as I said, no intention to get into a fanboy this-vs-that debate (and yes, there sure are products that do some things better than the respective apple counterpart). Neither was I arguing against google or amazon :) rather for my hope that Apple won't go into the mode that you had described because then my investment in that firm will no longer be a good one.

Cheers - C.

Well, let me just clarify again -- I'm not saying that Apple will make "me too" products because of what Google or Amazon or Microsoft have released.  What I'm saying is that if the new products coming out of those companies are innovative and of real value to end users, Apple's business will be affected, full stop.  Most likely by lost sales or gross margin compression. 

Additionally, if it turns out there is a real need for the new innovative products being released (for example, a hybrid tablet/desktop experience or smaller sized tablets), I don't see why AAPL would not want to come out with their own versions of such products, provided that they are the best damn products Apple can make.  But if AAPL does not come up with their own versions of those new products, they may no longer be able to claim that they have best stuff on the market.

Re: developers not wanting to develop for Android, they're doing so despite any fragmentation.  So if GOOG reduces the probability of fragmentation, think about how that will affect the market.

In any case, I'm not telling you that I think AAPL is overvalued or that your investment won't be a good one.
Title: Re: GOOGL - Google
Post by: valueInv on July 12, 2012, 04:56:52 PM

Google can survive forever at 0% margins because selling hardware is not their revenue generator. Other android manufacturers can survive on razor thin margins like the desktop industry. For the last five years Apple has stayed ahead of the competition and maintained margins by having a better product, but you are starting to see android catch up. Apple has already been forced to create their own navigation system to stay maintain their position, and there are rumors they are producing a mini Ipad. The competition won't run out of steam because they are in a different arms race than Apple. Apple is making money selling high priced luxury cars. Google is making money by giving away cars at cost then tolling all the cars on the road. The problem for Apple is their luxury Lexus is starting to look very similar to the Google Nexus at half the price.   

Google has bought a $13B dollar business selling hardware. They're manufacturing the Nexus Q themselves. Andy Rubin said that the Nexus 7 has 0 margin. Now Asus is not going to sell for 0 margin, which means Google is subsidizing it. They will also be selling Google Glasses. So Google is very much in the hardware business.

A lot of vendors in the PC industry went out of business due to razor thin margins.

Apple created a navigation system not because they were forced to but because they're slowly rooting out Google from their platform. Mapping and location information is strategic enough that they don't want an outsider vendor controlling it. Further, Google is deprived of mapping data from iPhone users and also of advertising revenue from location based ads. For Apple, it is a no brainer. They're will probably be cutting out the search engine at some also.

I played with a Nexus 7 last week . Yes, their UI is getting pretty close.  It may be half the price, but it also is half the size.
The apps are not tablet apps but scaled up smartphone apps. The screen is too small for full featured tablet apps. BTW, it looks like  the $199 Nexus 7 will be sold only through the online store. Only the $249 version will be sold through regular retail outlets. Further, most the the content available for it is licensed only in 5 countries including the US. The other countries will have a tablet that won't be doing much. Comparing the Nexus 7 to the iPad is like comparing a BMW 3 series to a Kawasaki Ninja motorcycle. They may be equally good at what they do but they have different capacities. For example, on my iPad I can edit a presentation with Keynote, write music on Garageband or create mashups using vjay (http://www.algoriddim.com/vjay). These tasks are not feasible on a 7 inch screen.

What the Nexus 7 does is address a market segment that is not covered by Apple today.
Title: Re: GOOGL - Google
Post by: valueInv on July 12, 2012, 05:14:00 PM
Well, let me just clarify again -- I'm not saying that Apple will make "me too" products because of what Google or Amazon or Microsoft have released.  What I'm saying is that if the new products coming out of those companies are innovative and of real value to end users, Apple's business will be affected, full stop.  Most likely by lost sales or gross margin compression. 

Additionally, if it turns out there is a real need for the new innovative products being released (for example, a hybrid tablet/desktop experience or smaller sized tablets), I don't see why AAPL would not want to come out with their own versions of such products, provided that they are the best damn products Apple can make.  But if AAPL does not come up with their own versions of those new products, they may no longer be able to claim that they have best stuff on the market.
Agreed. As you said there's an "if". Obviously, Apple needs to outperform. But I see more cracks appearing in the Android ecosystem than in the IOS ecosystem currently.

Re: developers not wanting to develop for Android, they're doing so despite any fragmentation.  So if GOOG reduces the probability of fragmentation, think about how that will affect the market.

http://www.pocketgamer.biz/r/PG.Biz/Flurry/feature.asp?c=41881
http://www.pcmag.com/article2/0,2817,2406993,00.asp

Google has been trying to reduce fragmentation but has failed. Only 10% of devices out there are on ICS. Not only are vendors slapping on their own UI on top of Android, their are building apps and store that compete with Google's. Samsung has S-Voice, their own version of iMessage and they even are creating a mobile ad network. HTC bought Beats Audio, MOG, etc. They're all trying to differentiate themselves and compete with Google. Then there's Amazon who is gunning straight for Google. Fragmentation is not going to decrease anytime soon

http://venturebeat.com/2012/04/04/samsung-mobile-ad-network/
http://www.mediapost.com/publications/article/174348/samsung-acquires-mobile-media-streaming-company-ms.html
http://www.geek.com/articles/mobile/beats-audio-buys-mog-htc-gets-a-streaming-music-service-20120320/
Title: Re: GOOGL - Google
Post by: tradevestor on July 16, 2012, 05:13:31 PM
Since there is no topic that covers smartphones in general,  I will leave this here. 

The great smartphone boom is about to end as the market nears peak.
- Growth slows
- Competition intensifies
- Open systems will start to win.

http://www.forbes.com/sites/roberthof/2012/07/16/report-apple-iphone-5-will-be-last-smartphone-hurrah-as-market-nears-peak/
Title: Re: GOOGL - Google
Post by: DCG on July 17, 2012, 04:15:14 AM
Marissa Meyer named CEO of Yahoo. Didn't see that one coming.
Title: Re: GOOGL - Google
Post by: valueInv on July 17, 2012, 11:56:17 AM
18 Motorola devices banned from the US:

http://venturebeat.com/2012/07/17/motorola-device-ban/


So Google bought it to protect Android from patent lawsuits?
Title: Re: GOOGL - Google
Post by: valueInv on July 22, 2012, 07:40:23 PM
Maybe Google should ask for its money back from this lawyer:

ahttp://allthingsd.com/20120720/google-claims-popularity-has-made-some-apple-patents-de-facto-essentials/
Title: Re: GOOGL - Google
Post by: rkbabang on July 27, 2012, 07:10:34 AM
In Kansas City Google is offering 1Gb internet for $70/month, Internet+TV for $120, or Free 5Mb Internet to anyone who wants it.
A $300 connection fee applies to all of them, so the "free" 5Mb service actually costs a $300 one time fee.

Google Delivering low cost gigabit per second fiber internet profitably (http://nextbigfuture.com/2012/07/google-delivering-low-cost-gigabit-per.html)

"Google makes 80% of all internet advertising. If Comcasts and AT&Ts of the US do respond with radically lower price then Google wins with more internet advertising. If they do not respond then Google will roll out beyond Kansas and win with profitable Gigabit per second internet fiber.

Google own a lot of dark fiber so Google can deploy nationally with an integrated network, hardware (they make their own routers etc...), and internet advertising solution.
"
Title: Re: GOOGL - Google
Post by: valueInv on July 27, 2012, 09:01:30 AM
The Motorola buy seems to have really bolstered Android's defences  ;):

http://venturebeat.com/2012/07/27/motorola-german-ban-android/
Title: Re: GOOGL - Google
Post by: racemize on July 27, 2012, 09:11:20 AM
The Motorola buy seems to have really bolstered Android's defences  ;):

http://venturebeat.com/2012/07/27/motorola-german-ban-android/

your probably kidding, but it will take a while to get those patents working for them.
Title: Re: GOOGL - Google
Post by: valueInv on July 27, 2012, 09:36:10 AM
The Motorola buy seems to have really bolstered Android's defences  ;):

http://venturebeat.com/2012/07/27/motorola-german-ban-android/

your probably kidding, but it will take a while to get those patents working for them.

I'm no legal expert but how will the patents work if Motorola can't even defend itself? Their devices have already been banned in US and Germany.

I'm not sure if thy have time, the big trial has already started:
http://www.wired.com/gadgetlab/2012/07/apple-v-samsung-explained/

Title: Re: GOOGL - Google
Post by: racemize on July 27, 2012, 01:21:01 PM
the value of the motorolla patents will be for counter patent suits (e.g., so they have the power to stop iPhone/iPad sales), though I'm not sure they can cancel the banning once it has taken place.
Title: Re: GOOGL - Google
Post by: valueInv on July 27, 2012, 06:39:19 PM
the value of the motorolla patents will be for counter patent suits (e.g., so they have the power to stop iPhone/iPad sales), though I'm not sure they can cancel the banning once it has taken place.
The current trial is both Apple suing and Samsung countersuing. Can they countersue again after the trial? What is the likely game plan?
Title: Re: GOOGL - Google
Post by: racemize on July 27, 2012, 06:51:27 PM
the value of the motorolla patents will be for counter patent suits (e.g., so they have the power to stop iPhone/iPad sales), though I'm not sure they can cancel the banning once it has taken place.
The current trial is both Apple suing and Samsung countersuing. Can they countersue again after the trial? What is the likely game plan?

usually the value of patents is to have a big stack on either side, enough so that it stops either from disabling the other one too badly.  In this case, it's a little different since the patent suits have already gone on and some judgements have gone into effect, but I would suspect that they would start suing apple back (probably just a fresh set of lawsuit(s)).
Title: Re: GOOGL - Google
Post by: valueInv on July 28, 2012, 09:26:29 AM
the value of the motorolla patents will be for counter patent suits (e.g., so they have the power to stop iPhone/iPad sales), though I'm not sure they can cancel the banning once it has taken place.
The current trial is both Apple suing and Samsung countersuing. Can they countersue again after the trial? What is the likely game plan?

usually the value of patents is to have a big stack on either side, enough so that it stops either from disabling the other one too badly.  In this case, it's a little different since the patent suits have already gone on and some judgements have gone into effect, but I would suspect that they would start suing apple back (probably just a fresh set of lawsuit(s)).

Why didn't they sue Microsoft back and maybe prevent the banning?
Title: Re: GOOGL - Google
Post by: racemize on July 28, 2012, 09:40:01 AM
it takes a while to figure out which patents to bring to court and what not and perhaps they aren't sure what they will do.  Regardless, it is just an arsenal for them to use whenever they feel it makes sense.
Title: Re: GOOGL - Google
Post by: valueInv on July 28, 2012, 10:01:20 AM
it takes a while to figure out which patents to bring to court and what not and perhaps they aren't sure what they will do.  Regardless, it is just an arsenal for them to use whenever they feel it makes sense.

I'm not sure I understand. MSFT sues Motorola. Motorola already has an arsenal of patents. They can use them to countersue MSFT to force a settlement and defend themselves. For some reason, that did not happen. MSFT starts winning and Motorola devices are banned. Motorola was already losing money before the banning, this is going to make it worse.

Now Google has possession of the patents. But the same patents could have been used before by Motorola, the original owner against MSFT. 
Title: Re: GOOGL - Google
Post by: racemize on July 28, 2012, 10:06:33 AM
At this level, I simply don't know what their strategy is, so I can't give you any good answers.  Patent matters bring in a whole host of questions to deal with, many of which don't involve the patents themselves--my overall point is, I'm sure it is helpful for their bargaining position, but how they use it is up to them.
Title: Re: GOOGL - Google
Post by: PlanMaestro on July 31, 2012, 03:27:52 PM
Careful Netflix, this is free (check the chart of monthly minutes per viewer)

YouTube to Double Down on Its 'Channel' Experiment
http://online.wsj.com/article/SB10000872396390444840104577549632241258356.html?mod=business_newsreel#


In contrast with TV, YouTube's fast production process and the lower costs of online video means producers can make near-instant changes to their programs in response to viewer feedback. As a result, YouTube channel producers say the rapid evolution of their content will eventually allow them to find the best way to attract large audiences for the long term.

YouTube has tens of thousands of channels, created by active users who frequently post videos; some are much better than others.

The new, funded channels are designed to produce high-quality shows that are "brand safe" for advertisers, which pay a premium to put ads there. Other ads on the site could end up randomly next to, say, videos of funny cats or people demonstrating their New York accents.

YouTube's channels initiative is a means to an end. By investing in the creation of professional-grade content and showing that there's a viable economic model for it, YouTube hopes to encourage other professional video creators to join the site.

Overall, user growth for YouTube is picking up. People now watch four billion hours of video on the site per month, up from three billion earlier this year, said Mr. Kyncl.
Title: Re: GOOGL - Google
Post by: valueInv on July 31, 2012, 04:32:58 PM
When Google tries to design something:

http://venturebeat.com/2012/07/31/nexus-q-delay/

Title: Re: GOOGL - Google
Post by: valueInv on August 03, 2012, 04:13:08 PM
HTC - the next Nokia?

http://techcrunch.com/2012/08/03/competition-weighs-down-htc-in-q2-sales-drop-27-to-3b-operating-profit-eps-down-57/
Title: Re: GOOGL - Google
Post by: rkbabang on August 08, 2012, 06:42:47 PM
Here's What Happens To Google Employees When They Die (http://www.forbes.com/sites/meghancasserly/2012/08/08/heres-what-happens-to-google-employees-when-they-die/)

"Should a Googler pass away while under the employ of the 14-year old search giant, their surviving spouse or domestic partner will receive a check for 50% of their salary every year for the next decade...In addition to the 10-year pay package, surviving spouses will see all stocks vested immediately and any children will receive a $1,000 monthly payment from the company until they reach the age of 19 (or 23 if the child is a full-time student)....the reason we’re doing these things for employees is not because it’s important to the business, but simply because it’s the right thing to do. When it comes down to it, it’s better to work for a company who cares about you than a company who doesn’t. And from a company standpoint, that makes it better to care than not to care.
Title: Re: GOOGL - Google
Post by: alpha23 on August 08, 2012, 07:57:01 PM
Here's What Happens To Google Employees When They Die (http://www.forbes.com/sites/meghancasserly/2012/08/08/heres-what-happens-to-google-employees-when-they-die/)

"Should a Googler pass away while under the employ of the 14-year old search giant, their surviving spouse or domestic partner will receive a check for 50% of their salary every year for the next decade...In addition to the 10-year pay package, surviving spouses will see all stocks vested immediately and any children will receive a $1,000 monthly payment from the company until they reach the age of 19 (or 23 if the child is a full-time student)....the reason we’re doing these things for employees is not because it’s important to the business, but simply because it’s the right thing to do. When it comes down to it, it’s better to work for a company who cares about you than a company who doesn’t. And from a company standpoint, that makes it better to care than not to care.

Sounds like good business and human compassion together. Lovely combination.
Title: Re: GOOGL - Google
Post by: AAOI on August 08, 2012, 11:08:13 PM
Here's What Happens To Google Employees When They Die (http://www.forbes.com/sites/meghancasserly/2012/08/08/heres-what-happens-to-google-employees-when-they-die/)

"Should a Googler pass away while under the employ of the 14-year old search giant, their surviving spouse or domestic partner will receive a check for 50% of their salary every year for the next decade...In addition to the 10-year pay package, surviving spouses will see all stocks vested immediately and any children will receive a $1,000 monthly payment from the company until they reach the age of 19 (or 23 if the child is a full-time student)....the reason we’re doing these things for employees is not because it’s important to the business, but simply because it’s the right thing to do. When it comes down to it, it’s better to work for a company who cares about you than a company who doesn’t. And from a company standpoint, that makes it better to care than not to care.

+1

Sounds like good business and human compassion together. Lovely combination.
Title: Re: GOOGL - Google
Post by: AAOI on August 08, 2012, 11:10:03 PM
Sounds like good business and human compassion together. Lovely combination.
[/quote]

+1
Title: Re: GOOGL - Google
Post by: valueInv on August 13, 2012, 09:11:50 AM
Cuts at Motorola:

http://www.reuters.com/article/2012/08/13/us-motorolamobility-jobs-idUSBRE87C07F20120813
Title: Re: GOOGL - Google
Post by: valueInv on August 13, 2012, 09:31:31 PM
The Motorola acquisition seems to be a really smart move for Google  ;):

http://www.appleinsider.com/articles/12/08/13/apple_frand_win_over_motorola_slashes_googles_patent_power.html
Title: Re: GOOGL - Google
Post by: alpha23 on August 14, 2012, 08:21:33 AM
http://www.ft.com/intl/cms/s/0/8e1ca90a-e56a-11e1-8ac0-00144feab49a.html#axzz23XB2jRMu

Google buys Frommers.
Title: Re: GOOGL - Google
Post by: rkbabang on August 14, 2012, 11:36:07 AM
Can DARPA's Strategy Help Motorola Compete Again? (http://www.technologyreview.com/news/428862/can-darpas-strategy-help-motorola-compete-again/?nlid=nldly&nld=2012-08-14)

"Google has also created a department within Motorola - Advanced Technology and Projects - comprised of researchers charged with finding cutting-edge technologies that could give Motorola's products an edge. And the executive refresh includes a new senior vice president, Regina Dugan, a former director of the Defense Advanced Research Projects Agency, the Pentagon's long-term research arm...

Dugan's DARPA experience could help drive a research mission at Motorola, says Wade Trappe, a professor at the Rutgers University Winlab. "She is very good at driving a larger research program. And Motorola and the Android platform need to think out of the box to compete against the smooth interfaces and other features that the iPhone has," he says...

According to the Times report, Woodside plans to reduce the number of devices Motorola makes from the 27 it introduced last year down to just a few, and wants those devices to have super-long battery life, improved cameras, and possibly even new features such as voice recognition technology that can recognize people chatting in a room. Dugan is reportedly hiring metal scientists, acoustics engineers, and artificial intelligence experts, too...

Among the hard problems that need solving in smartphones, Trappe says, is coming up with smoother ways to collect revenue from mobile apps. "That has been a big hard challenge for everyone," Trappe notes. "Apple has the app store and iTunes - those are instant moneymakers for Apple. But Google has not been able to replicate that."
"
Title: Re: GOOGL - Google
Post by: alpha23 on August 16, 2012, 09:36:30 AM
Can DARPA's Strategy Help Motorola Compete Again? (http://www.technologyreview.com/news/428862/can-darpas-strategy-help-motorola-compete-again/?nlid=nldly&nld=2012-08-14)

"Google has also created a department within Motorola - Advanced Technology and Projects - comprised of researchers charged with finding cutting-edge technologies that could give Motorola's products an edge. And the executive refresh includes a new senior vice president, Regina Dugan, a former director of the Defense Advanced Research Projects Agency, the Pentagon's long-term research arm...

Dugan's DARPA experience could help drive a research mission at Motorola, says Wade Trappe, a professor at the Rutgers University Winlab. "She is very good at driving a larger research program. And Motorola and the Android platform need to think out of the box to compete against the smooth interfaces and other features that the iPhone has," he says...

According to the Times report, Woodside plans to reduce the number of devices Motorola makes from the 27 it introduced last year down to just a few, and wants those devices to have super-long battery life, improved cameras, and possibly even new features such as voice recognition technology that can recognize people chatting in a room. Dugan is reportedly hiring metal scientists, acoustics engineers, and artificial intelligence experts, too...

Among the hard problems that need solving in smartphones, Trappe says, is coming up with smoother ways to collect revenue from mobile apps. "That has been a big hard challenge for everyone," Trappe notes. "Apple has the app store and iTunes - those are instant moneymakers for Apple. But Google has not been able to replicate that."
"

Makes sense for 'commodity hardware'
Title: Re: GOOGL - Google
Post by: alpha23 on August 16, 2012, 09:37:54 AM
Charlie Rose interviewed Larry Page at the end of July: http://www.charlierose.com/view/interview/12476 (http://www.charlierose.com/view/interview/12476)

Also, I didn't see anyone post this significant bit of news from May: http://www.pcworld.com/article/255886/google_chrome_overtakes_internet_explorer.html

Title: Re: GOOGL - Google
Post by: racemize on August 18, 2012, 05:55:40 PM
looks like the motorola patents are being used:


http://arstechnica.com/tech-policy/2012/08/motorola-brings-its-first-patent-suit-against-apple-as-a-google-subsidiary/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+arstechnica%2Findex+%28Ars+Technica+-+All+content%29
Title: Re: GOOGL - Google
Post by: rimm_never_sleeps on August 18, 2012, 07:25:23 PM
google is turning the tables on apple. i doubt this suit would have been brought had apple not gone after Samsung with both barrels loaded.
Title: Re: GOOGL - Google
Post by: Liberty on September 06, 2012, 05:04:29 PM
http://www.theatlantic.com/technology/archive/2012/09/how-google-builds-its-maps-and-what-it-means-for-the-future-of-everything/261913/
Title: Re: GOOGL - Google
Post by: valueInv on September 07, 2012, 12:55:00 PM
Well, Google, there's a new sheriff in ad town:

http://www.pcmag.com/article2/0,2817,2409389,00.asp
Title: Re: GOOGL - Google
Post by: valueInv on September 09, 2012, 10:09:48 PM
Increasingly, Amazon is gunning for Google:

http://www.nytimes.com/2012/09/10/technology/google-shopping-competition-amazon-charging-retailers.html?_r=1

From what I hear, Bing is the default search engine on the new Kindles.
Title: Re: GOOGL - Google
Post by: valueInv on September 13, 2012, 10:29:15 PM
Loss for Motorola:

http://www.engadget.com/2012/09/13/apple-wins-injunction-against-motorola-in-germany-over-rubber-b/
Title: Re: GOOGL - Google
Post by: valueInv on September 17, 2012, 08:44:23 PM
We had a debate on Google being open a while back. Here's whats new:

http://marketingland.com/what-is-the-one-true-android-and-how-open-is-it-21664
Title: Re: GOOGL - Google
Post by: valueInv on September 20, 2012, 08:52:26 AM
Motorola just can't stop losing them:

http://www.engadget.com/2012/09/20/microsoft-wins-third-injunction-motorola-software-patent/
Title: Re: GOOGL - Google
Post by: Shane on September 20, 2012, 11:20:59 AM
I think Charlie Rose did a great job in that interview, thanks for sharing Alpha23.
Title: Re: GOOGL - Google
Post by: Palantir on September 20, 2012, 05:31:50 PM
What are you guys estimating the intrinsic value of Google to be? Roughly, they've got 44B in cash and expected 13B in FCF this year. Sticking a 16x multiple given high growth rates, I think it comes somewhere in the ballpark of 44+13(16) = 250B MCap or about $770/share. However, a 16x multiple could be too conservative/liberal.


I got in at 575 :D
Title: Re: GOOGL - Google
Post by: FrankArabia on September 21, 2012, 07:36:09 AM
i don't think standard balance sheet metrics apply in valuing GOOG. if you can't see higher cash flows from GOOG going forward, any how you slice it the stock is expensive. GOOG is my fave stock right now but the it is getting up there in valuation.
Title: Re: GOOGL - Google
Post by: Palantir on September 21, 2012, 07:58:45 AM
It's true that standard B/S metrics are not as relevant as future projections of cash flow....that being said, keep in mind that Google's cash flow is pretty stable, as their product is "sticky", it's hard to switch out of and the more people use search, the better it gets due to superior data collection, so I think cash flows will be stable and not necessarily dependent on them bringing out an awesome product year after year like Apple.  What's your estimate of Google's IV?
Title: Re: GOOGL - Google
Post by: FrankArabia on September 21, 2012, 09:02:18 AM
....i think GOOG has the possibility to grow its cash flow in the area of 10% on an annual basis overtime...some years it will be higher than others....
Title: Re: GOOGL - Google
Post by: Palantir on September 25, 2012, 07:42:39 AM
Yes you're right, G probably can grow greater than 10% over time....I think a MCap of 300B is reasonable...
Title: Re: GOOGL - Google
Post by: valueInv on October 02, 2012, 12:41:03 PM
Strange, very strange:

http://www.engadget.com/2012/10/02/motorola-withdraws-recent-itc-complaint-against-apple/

They settled their German case also.
Title: Re: GOOGL - Google
Post by: valueInv on October 08, 2012, 07:24:28 PM
http://venturebeat.com/2012/10/08/motorola-removes-devices-germany/

Very smart acquisition, Google. Not only is it not defending Android, Google is now on the hook for Motorola's patent losses.
Title: Re: GOOGL - Google
Post by: Liberty on October 12, 2012, 12:23:25 PM
http://online.wsj.com/article/SB10000872396390443493304578034822744854696.html
Title: Re: GOOGL - Google
Post by: valueInv on October 12, 2012, 01:13:15 PM
Looks like Google will be adding to its legal team soon:

http://www.reuters.com/article/2012/10/12/us-google-ftc-antitrust-idUSBRE89B16G20121012
Title: Re: GOOGL - Google
Post by: alpha23 on October 12, 2012, 03:27:30 PM
http://online.wsj.com/article/SB10000872396390443493304578034822744854696.html

This is so cool. Whether it makes any money is hard to tell obviously, but I think that goog is stacking the odds in their favor, and the technology is fascinating.
Title: Re: GOOGL - Google
Post by: valueInv on October 16, 2012, 10:54:13 AM
For a company with "Do no evil" motto, they sure get into a lot of trouble:

http://www.washingtonpost.com/business/technology/ftc-declined-to-join-european-criticism-of-google/2012/10/16/01314442-17ab-11e2-9855-71f2b202721b_story.html

IP lawsuits, anti trust lawsuits and privacy lawsuits.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on October 16, 2012, 12:25:50 PM
They are likely being targeted being they are a big company that makes a lot of money.

- Patent trolls will go after people with money (e.g. both mid-sized and large companies).
- The antitrust lawsuits stem from bureaucracies whose sole purpose is to sue large companies and/or engage in other activities that supports all their salaries.  Of course the US government lawsuit against Microsoft was embarrassing now that IE doesn't have dominant market share.

Personally I think that it's a shame that Google gets targeted by all these people.  Google is a wonderful model for making profits in a socially responsible manner.  If you want to make money ethically, you would probably want to be in the software business.  The software business rewards you for creating value and it's extremely rare to be rewarded well for business practices that do not create value.  Beneficiaries of spyware such as Comscore (SCOR) have a lower market cap than other tech companies (e.g. GOOG). 

But it is the price you pay for success.
Title: Re: GOOGL - Google
Post by: Liberty on October 17, 2012, 08:48:51 AM
http://www.wired.com/wiredenterprise/2012/10/ff-inside-google-data-center/all/
Title: Re: GOOGL - Google
Post by: jeffmori7 on October 17, 2012, 09:59:50 AM
Merci Liberty! Very interesting stuff showing one of the main reason why Google has such a moat! And showing nice engineering and a great vision too!
Title: Re: GOOGL - Google
Post by: txlaw on October 17, 2012, 10:18:21 AM
Merci Liberty! Very interesting stuff showing one of the main reason why Google has such a moat! And showing nice engineering and a great vision too!

+1.  Thanks.
Title: Re: GOOGL - Google
Post by: Liberty on October 17, 2012, 11:33:12 AM
Merci Liberty! Very interesting stuff showing one of the main reason why Google has such a moat! And showing nice engineering and a great vision too!

Note that anything you see here is probably a few years behind Google's state of the art (this is according to an engineer who helped build these data centers on another discussion forum).
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on October 18, 2012, 03:51:57 AM
Google has some very impressive cloud infrastructure technology.  They:
- Built their own file system and storage (bypassing EMC at its ilk)
- Build their own networking (bypassing Cisco)
- Build their own servers (bypassing Dell, HP, Supermicro)
- Have a very low PUE
etc. etc.

But I'm not sure that it gives them a huge advantage.  Look at Google Video versus Youtube, or Google+ versus Facebook.  Sometimes the operating costs of the servers aren't necessarily what matters.  For many situations it's the quality of the software that matters the most.

*Granted, In the long run, low costs may be what matters for online distribution of video.  That is possible.
Though I think that what will matter in online video is the ability to monetize effectively.  In ad-supported online video, Google has an advantage because it can use information about the user (e.g. from Google searches) to target ads.  If online video moves towards subscriptions (e.g. Netflix), then Google may be left out of the game because it does not sell its infrastructure to third parties.
Title: Re: GOOGL - Google
Post by: mysticdrew on October 18, 2012, 06:34:39 AM
Google has some very impressive cloud infrastructure technology.  They:
- Built their own file system and storage (bypassing EMC at its ilk)
- Build their own networking (bypassing Cisco)
- Build their own servers (bypassing Dell, HP, Supermicro)
- Have a very low PUE
etc. etc.

But I'm not sure that it gives them a huge advantage.  Look at Google Video versus Youtube

You do know they own Youtube right?
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 07:03:35 AM
It's definitely a cost/efficiency advantage.  It's also a reliability and flexibility advantage.  Google's infrastructure allows them to switch computing tasks at huge scale.  YouTube independent of Google could never reach the scale that they have.  Youtube's founders were great marketers first and decent engineers second.

I agree with a couple more of your points here..  Google has excellent insight into individual users' preferences, which gives them an advantage in ad display efficiency.  The other point I agree with is that Google's "go to market" strategies are really hit and miss.  Search, Gmail, Maps, and News were all but  flawless, but Buzz, Google+, Wave, and Video were pretty terrible.  Early on in this discussion thread I stated that Google makes very public and risky product decisions and that we're just witnesses to the resulting creative destruction.  I have to constantly remind myself that this is part of the process.  It's a bit like when value investors take a loss on a position and remind themselves it's OK because the process was right :)
Title: Re: GOOGL - Google
Post by: Palantir on October 18, 2012, 07:25:12 AM
Nah you guys aren't hitting the point. Their advantage is not their server infrastructure - other companies can build those things if they need to. See Facebook and MSFT or AWS.

Their advantage is the quality of their search function. EVERYTHING feeds into that, and search gets stronger the more people use it, and the more people use it, the better it gets, which also attracts advertisers. Their business model is their competitive advantage. It is very difficult to replicate. The server infra mentioned earlier simply enables this.

Once you get used to google, there is no reason to switch to another search engine. It is like a "consumer staple".
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 07:48:42 AM
Nah you guys aren't hitting the point. Their advantage is not their server infrastructure - other companies can build those things if they need to. See Facebook and MSFT or AWS.

Their advantage is the quality of their search function. EVERYTHING feeds into that, and search gets stronger the more people use it, and the more people use it, the better it gets, which also attracts advertisers. Their business model is their competitive advantage. It is very difficult to replicate. The server infra mentioned earlier simply enables this.

Once you get used to google, there is no reason to switch to another search engine. It is like a "consumer staple".

Google has more than one area of competitive advantage.  The search piece is obviously Google's greatest advantage and everything you said is completely true.  However, the infrastructure piece is a completely different area that's interesting on its own and still worth a discussion.  The point I'm making is that it's incrementally harder to displace Google in any of its leading categories because of their approach to infrastructure.

Taking YouTube as an example, about 16 years of video are uploaded every day.  Assuming it's 480p video and they have decent compression, that's about 50 terabytes of new data every day.  And it's available on tap immediately.  Just think through what that requires in terms of both hardware and software.  That Google handles this problem seamlessly is an engineering marvel.  That ability stems directly from their infrastructure, and it's mostly a software thing, not a hardware thing.
Title: Re: GOOGL - Google
Post by: Liberty on October 18, 2012, 07:52:09 AM
The hardware often permits them to do software that others can't. Instant Search, for example, requires a lot more processing power and bandwidth than just a regular search. Even the adsense network is HUGELY hardware-intensive and not easy to do for a smaller/less-efficient competitor. The quality of searches is also dependent on hardware bottlenecks; more processing power and bandwidth means you can crawl more often and take more signals into account to determine rankings, and refresh cached results more often.

Software and hardware aren't as independent as some people think.. One usually limits the other.
Title: Re: GOOGL - Google
Post by: Palantir on October 18, 2012, 09:43:37 AM
Jesus christ what happened?
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 09:53:38 AM
Jesus christ what happened?
I'm trying to buy right now but my order isn't going through.
Title: Re: GOOGL - Google
Post by: Liberty on October 18, 2012, 09:57:55 AM
Jesus christ what happened?

All I can see is this:

http://www.businessweek.com/news/2012-10-18/google-falls-after-third-quarter-sales-miss-analysts-estimates
Title: Re: GOOGL - Google
Post by: abcd on October 18, 2012, 09:58:11 AM
Results are out early. Probably by mistake. Lawyers may have been running to grab their their suits and ties
Title: Re: GOOGL - Google
Post by: valueInv on October 18, 2012, 10:05:19 AM
Jesus christ what happened?
I'm trying to buy right now but my order isn't going through.
Trading is halted.
Title: Re: GOOGL - Google
Post by: nkp007 on October 18, 2012, 10:11:45 AM
I'm thinking someone fat fingered the SEC filing.
Title: Re: GOOGL - Google
Post by: Palantir on October 18, 2012, 10:20:24 AM
Anyone have a link to the earnings?
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 10:24:18 AM
Anyone have a link to the earnings?

This was the press release that was leaked:
http://sec.gov/Archives/edgar/data/1288776/000119312512426975/d426664dex991.htm
Title: Re: GOOGL - Google
Post by: Palantir on October 18, 2012, 10:25:16 AM
Anyone have a link to the earnings?

This was the press release that was leaked:
http://sec.gov/Archives/edgar/data/1288776/000119312512426975/d426664dex991.htm

Excellent...thanks
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on October 18, 2012, 12:52:28 PM
Quote
That Google handles this problem seamlessly is an engineering marvel.  That ability stems directly from their infrastructure, and it's mostly a software thing, not a hardware thing.

Here is where I see their hardware advantage working:
-Gmail used to offer a huge amount of storage compared to other free email.  Now I don't think anybody cares about this.
-Google search indexes far more sites than Bing.  Sometimes people use Google search to find a specific page on a website... you can't do that with Bing.

On the other hand, the availability of venture capital and capital from companies like Microsoft means that many companies are willing to run money-losing operations against Google.  Losing money is not stopping the competition... Google's lower costs does not protect them against competition.  It improves their profits but does not protect their market share.  It's the quality of software IMO that determines market share.
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 01:11:18 PM
On the other hand, the availability of venture capital and capital from companies like Microsoft means that many companies are willing to run money-losing operations against Google.  Losing money is not stopping the competition... Google's lower costs does not protect them against competition.  It improves their profits but does not protect their market share.  It's the quality of software IMO that determines market share.

I think you're overlooking the meaning of what an advantage is.  A cost advantage is an advantage.  If Google can operate at half the cost of a competitor, then they can invest those savings into extending their lead against that competitor.  The competitor must spend twice as much to get the same thing.  The existence of competition hurts Google, but suggesting that you can just throw money at a problem and that negates the advantage simply ignores the economic reasons for developing an advantage in the first place.  So yes, a cost advantage absolutely protects their market share and discourages competition.
Title: Re: GOOGL - Google
Post by: valueInv on October 18, 2012, 01:12:11 PM
Quote
That Google handles this problem seamlessly is an engineering marvel.  That ability stems directly from their infrastructure, and it's mostly a software thing, not a hardware thing.

H  It improves their profits but does not protect their market share.  It's the quality of software IMO that determines market share.
Take a look at today's earnings release.
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 01:15:04 PM
Take a look at today's earnings release.

Could you provide a little more analysis on this?  Take a look at what exactly?

I think we would all prefer a specific point instead of a vague suggestion.
Title: Re: GOOGL - Google
Post by: tradevestor on October 18, 2012, 01:48:07 PM
Google and Amazon continue to commoditize hardware.

$249 laptop from Google and $159 tablet from Amazon.

https://www.google.com/intl/en/chrome/devices/
http://www.amazon.com/Kindle-Fire-Amazon-tablet/dp/B0083Q04IQ
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on October 18, 2012, 02:58:12 PM
Quote
I think you're overlooking the meaning of what an advantage is.  A cost advantage is an advantage.  If Google can operate at half the cost of a competitor, then they can invest those savings into extending their lead against that competitor.

I guess what I am trying to get at is that I make a distinction between an advantage and a moat.  To me, a moat is something that helps you retain market share.  These companies are safer in the long run and deserve a higher multiple in my opinion. 

Google's cloud infrastructure advantage didn't help in competing with Youtube (which they ended up buying) and didn't seem to help it in competing with Facebook.

2- In technology, there are limits to R&D spending.  Doubling the number of programmers will NOT double productivity.  Hiring more good programmers is hard and doesn't scale well.  Getting large groups of programmers to work productively doesn't scale well (e.g. see the Wikipedia entry on the mythical man-month).

In the history of tech, it's often the case that some small company develops some type of disruptive technology that causes titans (with bigger R&D budgets and more cumulative R&D spending) to fall.  This is what Google did to its predecessors like Yahoo.  Having a big R&D budget is not that strong of a moat.

I would agree with the argument that low costs --> more R&D --> slightly better product --> somewhat of a moat.  But... if a company develops better search than Google with higher costs, I will want to bet on better search.  The company with the better search will be the market share winner, not the company with the lower costs. 
*Right now I think Google has the best search.
Title: Re: GOOGL - Google
Post by: valueInv on October 18, 2012, 03:50:10 PM
Take a look at today's earnings release.

Could you provide a little more analysis on this?  Take a look at what exactly?

I think we would all prefer a specific point instead of a vague suggestion.

http://online.wsj.com/article/SB10000872396390443684104578064671358259436.html?mod=pls_whats_news_us_business_f&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+Feedfetcher

Revenue growth was not a problem, profitability was. Mobile CPCs are lower, so as people transition to mobile CPCs decrease. Further, on mobile they have revenue sharing agreements with operators (one of the reasons why Android has grown so quickly). So while on the desktop, they keep almost all of their revenue, on mobile they don't. The technology cost to serve a search or an ad is only part of their cost.

There is a new cost coming up - device subsidies. They are subsidizing tablets and now laptops. And they are locked in a price war with Amazon. Amazon introduced the $199 Kindle, Google follows with the $199 Nexus 7. Amazon drops the price to $159, now Google is rumored to introduce a $99 Nexus tablet. They just introduced a $259 Samsung Chromebook. Acer and Samsung are not going to be selling their devices at cost, guess who is the sugar daddy?
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 05:15:33 PM
Quote
I think you're overlooking the meaning of what an advantage is.  A cost advantage is an advantage.  If Google can operate at half the cost of a competitor, then they can invest those savings into extending their lead against that competitor.

I guess what I am trying to get at is that I make a distinction between an advantage and a moat.  To me, a moat is something that helps you retain market share.  These companies are safer in the long run and deserve a higher multiple in my opinion. 

Google's cloud infrastructure advantage didn't help in competing with Youtube (which they ended up buying) and didn't seem to help it in competing with Facebook.
Well it probably did help them in both cases, because they were able to spin up an application that could reach scale with very low incremental cost.  In this scenario you're simplifying the complexity of bringing a service to market as simply "win" vs. "lose".

I will gladly agree that infrastructure alone does not create a moat for the businesses that Google is in, but that's not really what we were talking about.


2- In technology, there are limits to R&D spending.  Doubling the number of programmers will NOT double productivity.  Hiring more good programmers is hard and doesn't scale well.  Getting large groups of programmers to work productively doesn't scale well (e.g. see the Wikipedia entry on the mythical man-month).

This part is getting a little bit tough for me to follow.  Initially you had argued that competitors can just dump money into beating Google and therefore infrastructure doesn't count.  Now you've reversed your position by saying that a competitor can't dump money into solving a problem because there is an upper bound to what a large team can achieve.  Which do you actually believe?

In the history of tech, it's often the case that some small company develops some type of disruptive technology that causes titans (with bigger R&D budgets and more cumulative R&D spending) to fall.  This is what Google did to its predecessors like Yahoo.  Having a big R&D budget is not that strong of a moat.
Really? I've never heard of that scenario before...

I would agree with the argument that low costs --> more R&D --> slightly better product --> somewhat of a moat.  But... if a company develops better search than Google with higher costs, I will want to bet on better search.  The company with the better search will be the market share winner, not the company with the lower costs. 
*Right now I think Google has the best search.

You've somehow latched onto the idea that reinvestment only comes in the form of R&D.  I told you that saving money allows Google to use those savings to extend their lead over competitors.  The form of that extension doesn't necessarily have to come from R&D activities.  It could be from marketing, sales, investing in complementary products, buying other companies (like YouTube maybe).  I really don't think you're going to get very far with the argument that costs don't count in tech.  They absolutely matter, and reducing them leaves more money in the war chest for, like, war stuff, yo.

Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 05:29:52 PM
http://online.wsj.com/article/SB10000872396390443684104578064671358259436.html?mod=pls_whats_news_us_business_f&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+Feedfetcher

Revenue growth was not a problem, profitability was. Mobile CPCs are lower, so as people transition to mobile CPCs decrease. Further, on mobile they have revenue sharing agreements with operators (one of the reasons why Android has grown so quickly). So while on the desktop, they keep almost all of their revenue, on mobile they don't. The technology cost to serve a search or an ad is only part of their cost.

Well the CPC story isn't told entirely by mobile.  There were also significant currency fluctuations that caused the CPC to drop.  But yes, mobile is causing CPC to drop because fewer advertisers are bidding on mobile traffic.  Last I checked, everybody in the tech world has a big hard-on for mobile technology and they tend to lead the pack with this kind of thing.  Care to wager how long it's going to take before advertisers decide that they should attract more mobile traffic?  Or do you think that advertising on mobile devices will never take off?

My bet is that certain keywords on mobile will rise above their desktop counterparts, where others drop below.  For example "french bistro" will probably be highly coveted in mobile form.  Whereas "enterprise resource planning software" can likely get picked up on the cheap.

There is a new cost coming up - device subsidies. They are subsidizing tablets and now laptops. And they are locked in a price war with Amazon. Amazon introduced the $199 Kindle, Google follows with the $199 Nexus 7. Amazon drops the price to $159, now Google is rumored to introduce a $99 Nexus tablet. They just introduced a $259 Samsung Chromebook. Acer and Samsung are not going to be selling their devices at cost, guess who is the sugar daddy?

Where is the device subsidy cost in the earnings report?  What is the figure?

Title: Re: GOOGL - Google
Post by: Palantir on October 18, 2012, 05:33:26 PM
Is Apple's main advantage its incredible supply chain and inventory management processes? Or is it the fact that they come up with great products consistently that people really want to buy?


One of these is the advantage, and the other sustains the advantage. Same goes for Google.
Title: Re: GOOGL - Google
Post by: LC on October 18, 2012, 06:23:29 PM

I would agree with the argument that low costs --> more R&D --> slightly better product --> somewhat of a moat.  But... if a company develops better search than Google with higher costs, I will want to bet on better search.  The company with the better search will be the market share winner, not the company with the lower costs. 
*Right now I think Google has the best search.

Do you think search quality is a competitive advantage anymore? It seems to me that Google's brand power and ecosystem (Gmail, Google maps, etc.) is creating a switching cost for Google search users. Said differently, even if Bing is a better search engine, I won't use it because I use Gmail/Gmaps/Gdrive/Gdocs quite often.
Title: Re: GOOGL - Google
Post by: benchmark on October 18, 2012, 07:52:19 PM

I would agree with the argument that low costs --> more R&D --> slightly better product --> somewhat of a moat.  But... if a company develops better search than Google with higher costs, I will want to bet on better search.  The company with the better search will be the market share winner, not the company with the lower costs. 
*Right now I think Google has the best search.

Do you think search quality is a competitive advantage anymore? It seems to me that Google's brand power and ecosystem (Gmail, Google maps, etc.) is creating a switching cost for Google search users. Said differently, even if Bing is a better search engine, I won't use it because I use Gmail/Gmaps/Gdrive/Gdocs quite often.

For google, search quality is still the moat that you have. Bing has to be a lot better for people to switch. I don't think that Gmail/Gdrive/Gdoc are sticky enough, because switching search is so simple that it's almost effortless. W/o search, google ad revenue (which is majority of their revenue) would have disappeared.
Title: Re: GOOGL - Google
Post by: bargainman on October 18, 2012, 07:56:30 PM
For google, search quality is still the moat that you have. Bing has to be a lot better for people to switch. I don't think that Gmail/Gdrive/Gdoc are sticky enough, because switching search is so simple that it's almost effortless. W/o search, google ad revenue (which is majority of their revenue) would have disappeared.

Not if you count the default search.  These days I rarely go to google.com.  I just type into the search bar. Either in Firefox, chrome or safari (or IE occasionally).  Changing the default is not 'effortless' in that it involves the browser settings.  In fact that's the reason Google proliferated these search entry points.  I would argue that that's another element of their competitive advantage.  Safari, Android, Chrome, Firefox, and even iPhone (I think) all default to Google search without ever having to type "google.com" in the location bar.
Title: Re: GOOGL - Google
Post by: benchmark on October 18, 2012, 08:02:02 PM
For google, search quality is still the moat that you have. Bing has to be a lot better for people to switch. I don't think that Gmail/Gdrive/Gdoc are sticky enough, because switching search is so simple that it's almost effortless. W/o search, google ad revenue (which is majority of their revenue) would have disappeared.

Not if you count the default search.  These days I rarely go to google.com.  I just type into the search bar. Either in Firefox, chrome or safari (or IE occasionally).  Changing the default is not 'effortless' in that it involves the browser settings.  In fact that's the reason Google proliferated these search entry points.  I would argue that that's another element of their competitive advantage.  Safari, Android, Chrome, Firefox, and even iPhone (I think) all default to Google search without ever having to type "google.com" in the location bar.

If Bing is better than google, then i'm sure that microsoft have talented marketing people to get all these browers default settings to change to Bing. The problem is really that Bing can't beat google yet.
Title: Re: GOOGL - Google
Post by: valueInv on October 18, 2012, 08:18:56 PM
http://online.wsj.com/article/SB10000872396390443684104578064671358259436.html?mod=pls_whats_news_us_business_f&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7014+%28WSJ.com%3A+US+Business%29&utm_content=Google+Feedfetcher

Revenue growth was not a problem, profitability was. Mobile CPCs are lower, so as people transition to mobile CPCs decrease. Further, on mobile they have revenue sharing agreements with operators (one of the reasons why Android has grown so quickly). So while on the desktop, they keep almost all of their revenue, on mobile they don't. The technology cost to serve a search or an ad is only part of their cost.

Well the CPC story isn't told entirely by mobile.  There were also significant currency fluctuations that caused the CPC to drop.  But yes, mobile is causing CPC to drop because fewer advertisers are bidding on mobile traffic.  Last I checked, everybody in the tech world has a big hard-on for mobile technology and they tend to lead the pack with this kind of thing.  Care to wager how long it's going to take before advertisers decide that they should attract more mobile traffic?  Or do you think that advertising on mobile devices will never take off?

My bet is that certain keywords on mobile will rise above their desktop counterparts, where others drop below.  For example "french bistro" will probably be highly coveted in mobile form.  Whereas "enterprise resource planning software" can likely get picked up on the cheap.

There is a new cost coming up - device subsidies. They are subsidizing tablets and now laptops. And they are locked in a price war with Amazon. Amazon introduced the $199 Kindle, Google follows with the $199 Nexus 7. Amazon drops the price to $159, now Google is rumored to introduce a $99 Nexus tablet. They just introduced a $259 Samsung Chromebook. Acer and Samsung are not going to be selling their devices at cost, guess who is the sugar daddy?

Where is the device subsidy cost in the earnings report?  What is the figure?
Currencies and mobile ad spending effect both revenues and profits. Why was revenue headed in one direction and profits in another?
Title: Re: GOOGL - Google
Post by: valueInv on October 18, 2012, 08:20:05 PM
For google, search quality is still the moat that you have. Bing has to be a lot better for people to switch. I don't think that Gmail/Gdrive/Gdoc are sticky enough, because switching search is so simple that it's almost effortless. W/o search, google ad revenue (which is majority of their revenue) would have disappeared.

Not if you count the default search.  These days I rarely go to google.com.  I just type into the search bar. Either in Firefox, chrome or safari (or IE occasionally).  Changing the default is not 'effortless' in that it involves the browser settings.  In fact that's the reason Google proliferated these search entry points.  I would argue that that's another element of their competitive advantage.  Safari, Android, Chrome, Firefox, and even iPhone (I think) all default to Google search without ever having to type "google.com" in the location bar.

Things will start looking different is Surface and Windows phone start catching on, wouldn't it?
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 08:36:54 PM
Currencies and mobile ad spending effect both revenues and profits. Why was revenue headed in one direction and profits in another?

:) If I give the answer to all of the easy ones, then you won't appreciate the work that goes into answering the hard ones.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on October 18, 2012, 08:41:32 PM
Quote
This part is getting a little bit tough for me to follow.  Initially you had argued that competitors can just dump money into beating Google and therefore infrastructure doesn't count.  Now you've reversed your position by saying that a competitor can't dump money into solving a problem because there is an upper bound to what a large team can achieve.  Which do you actually believe?
They can dump money into infrastructure and/or operating costs.  The relative operating costs may be unimportant in predicting market share.

Any company can try improve their R&D with the money hose... it may or may not work out for them.

Anyways... we're going in circles here.  Yes lower operating/infrastructure costs are an advantage.  It's up to you if you want to pay attention to the subtleties.

Quote
Do you think search quality is a competitive advantage anymore? It seems to me that Google's brand power and ecosystem (Gmail, Google maps, etc.) is creating a switching cost for Google search users. Said differently, even if Bing is a better search engine, I won't use it because I use Gmail/Gmaps/Gdrive/Gdocs quite often.
I don't think brand matters too much?  Look at how quickly ICQ, Myspace, Friendster, etc. went away.  And in those cases there were higher switching costs.

2- Regarding the default search engine game... all the big search companies invest in toolbars and browsers and buying the default search (e.g. Facebook defaults to Bing because Bing paid for that).

I think search quality wins though.  Internet Explorer has very high market share... Bing market share is a small fraction of IE's even though Bing is the default search in IE.
Title: Re: GOOGL - Google
Post by: VAL9000 on October 18, 2012, 08:53:43 PM
Anyways... we're going in circles here.  Yes lower operating/infrastructure costs are an advantage.  It's up to you if you want to pay attention to the subtleties.

When that subtlety costs the business $3bn/year...  yes I want to pay attention to it.
Title: Re: GOOGL - Google
Post by: Myth465 on October 21, 2012, 10:17:55 PM
I am seriously considering getting a Chromebook and selling my Nexus 7, anyone else?
Title: Re: GOOGL - Google
Post by: Ross812 on October 22, 2012, 07:22:55 AM
I am seriously considering getting a Chromebook and selling my Nexus 7, anyone else?

I played with the new chrome book this weekend. It's really cheap and it feels really cheap. I am keeping my nexus 7 until the nexus 10 comes out or I get a convertible windows 8 ultrabook. The nexus 7 is an awesome device and made me stop using an ipad 2. I think chrome Os is a nice concept for a terminal like in a library but doesn't have the flexibility to be a primary device and is crippled without wifi.
Title: Re: GOOGL - Google
Post by: racemize on October 22, 2012, 07:33:35 AM
I am seriously considering getting a Chromebook and selling my Nexus 7, anyone else?

I played with the new chrome book this weekend. It's really cheap and it feels really cheap. I am keeping my nexus 7 until the nexus 10 comes out or I get a convertible windows 8 ultrabook. The nexus 7 is an awesome device and made me stop using an ipad 2. I think chrome Os is a nice concept for a terminal like in a library but doesn't have the flexibility to be a primary device and is crippled without wifi.

wait, it doesn't have wifi?  That seems insane!
Title: Re: GOOGL - Google
Post by: Ross812 on October 22, 2012, 07:51:29 AM
I am seriously considering getting a Chromebook and selling my Nexus 7, anyone else?

I played with the new chrome book this weekend. It's really cheap and it feels really cheap. I am keeping my nexus 7 until the nexus 10 comes out or I get a convertible windows 8 ultrabook. The nexus 7 is an awesome device and made me stop using an ipad 2. I think chrome Os is a nice concept for a terminal like in a library but doesn't have the flexibility to be a primary device and is crippled without wifi.

wait, it doesn't have wifi?  That seems insane!

It has wifi. Sorry. I meant that the chrome book is crippled if you are not in wifi range. It doesn't have the off-line capabilities of a tablet or traditional laptop.
Title: Re: GOOGL - Google
Post by: txlaw on October 22, 2012, 08:12:34 AM
I am seriously considering getting a Chromebook and selling my Nexus 7, anyone else?

I played with the new chrome book this weekend. It's really cheap and it feels really cheap. I am keeping my nexus 7 until the nexus 10 comes out or I get a convertible windows 8 ultrabook. The nexus 7 is an awesome device and made me stop using an ipad 2. I think chrome Os is a nice concept for a terminal like in a library but doesn't have the flexibility to be a primary device and is crippled without wifi.

wait, it doesn't have wifi?  That seems insane!

It has wifi. Sorry. I meant that the chrome book is crippled if you are not in wifi range. It doesn't have the off-line capabilities of a tablet or traditional laptop.

There is a 3G version ($330) where you get two years worth of data embedded into the price.

Nevertheless, there's so much being released this month that I'm waiting to see what exactly is in the market for the holiday season.  A 10-inch, "retina screen" Nexus tablet could make me dump my iPad 3.
Title: Re: GOOGL - Google
Post by: FrankArabia on October 22, 2012, 08:21:28 AM
i much rather buy an ultrabook......i want to see this windows 8 looks pretty cool...
Title: Re: GOOGL - Google
Post by: valueInv on October 22, 2012, 04:10:57 PM
I am seriously considering getting a Chromebook and selling my Nexus 7, anyone else?
Well, people are selling their Nexus 7s alright:

http://venturebeat.com/2012/10/22/nexus-7s-join-old-ipads-on-the-auction-block-before-apples-october-23-event/
Title: Re: GOOGL - Google
Post by: valueInv on November 01, 2012, 03:46:19 PM
Things heating up for Google on the legal front:

http://paidcontent.org/2012/10/30/google-news-wars-are-here-again-france-brazil-germany-front-up/
http://www.bloomberg.com/news/2012-11-01/ftc-staff-said-to-formally-recommend-google-patent-suit.html
Title: Re: GOOGL - Google
Post by: valueInv on November 01, 2012, 07:50:30 PM
When it rains it pours:

The ITC is also getting in the game. This explains why Google mysteriously withdrew its lawsuit a while back:
http://venturebeat.com/2012/11/01/now-google-is-the-patent-bad-boy-itc-staff-want-to-sue-android-maker/

Also:

http://techcrunch.com/2012/11/01/google-france-faces-fine-of-1-billion-for-tax-noncompliance-google-denies
Title: Re: GOOGL - Google
Post by: VAL9000 on November 02, 2012, 11:52:59 AM
http://www.extremetech.com/computing/139458-android-now-powers-75-of-all-smartphones-sold-are-we-heading-towards-a-google-monopoly

With numbers like these, the whole issue about App inventory will go away pretty soon. Keep in mind that all web pages and Windows apps in the world are designed to support fragmentation well beyond what the Android market showcases.  And at 136 million androids going out per quarter, more android phones are being sold than windows pcs.  Crazy.

I think we will see the tablet market take the same shape in the next couple of years.
Title: Re: GOOGL - Google
Post by: valueInv on November 02, 2012, 11:59:25 AM
What is he smoking?

http://pandodaily.com/2012/11/02/googles-john-lagerling-forget-about-hardware-we-bought-motorola-mobility-for-the-patents/
Title: Re: GOOGL - Google
Post by: DCG on November 02, 2012, 12:26:08 PM
And at 136 million androids going out per quarter, more android phones are being sold than windows pcs.  Crazy.


I'm not surprised by that (being that the phone upgrade cycle is much shorter than the computer upgrade cycle).

I'd kindof like to see Google start licensing Android instead of giving it away.
Title: Re: GOOGL - Google
Post by: Palantir on November 02, 2012, 12:29:04 PM

I'm not surprised by that (being that the phone upgrade cycle is much shorter than the computer upgrade cycle).

I'd kindof like to see Google start licensing Android instead of giving it away.

That would trigger a big patent fight....
Title: Re: GOOGL - Google
Post by: VAL9000 on November 02, 2012, 12:39:35 PM

I'm not surprised by that (being that the phone upgrade cycle is much shorter than the computer upgrade cycle).

I'd kindof like to see Google start licensing Android instead of giving it away.

That would trigger a big patent fight....

Sarcasm I hope?

I had previously argued for a license model for GOOG but I think today that it would be considered too greedy and their partners would balk.  As soon as GOOG starts charging some enterprising young startup will just fork the code and continue to develop it for free, threatening Google's control and Android's brand.
Title: Re: GOOGL - Google
Post by: Myth465 on November 04, 2012, 05:25:31 PM
I have made my point, Google is going the way of MSFT during the PC wars. I think its the better model.
Title: Re: GOOGL - Google
Post by: Palantir on November 28, 2012, 08:51:08 AM
I think Google is catching upwards momentum again after their correction last month. I think it is moderately undervalued assuming a 5-6% growth rate, but I believe the real growth rate is higher than 5-6%.
Title: Re: GOOGL - Google
Post by: FrankArabia on November 28, 2012, 09:12:57 AM
i think over the next ten years, google gets 10% CAGR...they have many platforms that they have yet to fully tap and may not do so for quite sometime...1) android 2) youtube 3) google tv 4) handheld devices and other hardware from motorola

most importantly their main driver "internet search" is a fortress at this point.....top 3 idea for me at this point...
Title: Re: GOOGL - Google
Post by: Palantir on November 28, 2012, 10:11:22 AM
Indeed, Google represents everything I like about the tech sector - capital light, sticky customers, and large growth potential, and in Google's case, the core business is a near global monopoly...80% of global searches are google.
Title: Re: GOOGL - Google
Post by: FrankArabia on November 28, 2012, 10:31:08 AM
i have seen the 80% figure myself, but where are the 20% going? i look around and i see google used nearly 100% of the time.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on November 28, 2012, 10:42:29 AM
In non-English countries like Russia and Japan, other search engines are dominant.  (e.g. Baidu, Yandex)

The second factor is whether or not you use Comscore data.  In my opinion, Comscore data is extremely unreliable... it puts Google at about 2/3rds of the US market.

statcounter.com is another place to get stats.
Title: Re: GOOGL - Google
Post by: valueInv on November 28, 2012, 11:14:58 AM
I think Google is catching upwards momentum again after their correction last month. I think it is moderately undervalued assuming a 5-6% growth rate, but I believe the real growth rate is higher than 5-6%.

You consider paying 21x earnings for a company growing at 6% moderately undervalued?
Title: Re: GOOGL - Google
Post by: Palantir on November 28, 2012, 11:38:04 AM
Yes.
Title: Re: GOOGL - Google
Post by: valueInv on December 05, 2012, 11:12:57 PM
Motorola, still paying off:

http://www.idownloadblog.com/2012/12/05/ftc-slams-moto-for-ban/
Title: Re: GOOGL - Google
Post by: mcliu on December 06, 2012, 02:19:47 PM
I think Google is catching upwards momentum again after their correction last month. I think it is moderately undervalued assuming a 5-6% growth rate, but I believe the real growth rate is higher than 5-6%.

You consider paying 21x earnings for a company growing at 6% moderately undervalued?
I guess it would depend on your discount rate?
I think it's only at 18x if you adjust for the cash.
Title: Re: GOOGL - Google
Post by: Palantir on December 06, 2012, 04:20:06 PM
I think Google is catching upwards momentum again after their correction last month. I think it is moderately undervalued assuming a 5-6% growth rate, but I believe the real growth rate is higher than 5-6%.

You consider paying 21x earnings for a company growing at 6% moderately undervalued?
I guess it would depend on your discount rate?
I think it's only at 18x if you adjust for the cash.

Yes, you have to adjust for the cash (40B net of debt), and I use OCF in lieu of Income. 14B v 9B. Once you do that the P/OCF comes out to be 12 ish.
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 06:13:58 AM
Google Maps for iOS 6 released:

http://www.forbes.com/sites/adriankingsleyhughes/2012/12/13/google-maps-comes-to-ios-6/ (http://www.forbes.com/sites/adriankingsleyhughes/2012/12/13/google-maps-comes-to-ios-6/)

Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 06:52:27 AM
These are from: Four Charts That Illustrate The Transformation of Personal Computing (http://www.technologyreview.com/view/508651/four-charts-that-illustrate-the-transformation-of-personal-computing/).  The first and 4th charts show the dominance of Android as the new way people will be accessing personal computing and communications.   Chart 3 shows how much growth in this area is still to come. And of course Chart 2 shows that pretty soon just about everyone will own a tablet.


1.) Android smartphones are taking over over the world.

(http://www.technologyreview.com/sites/default/files/styles/view_body_embed/public/images/MeekerAndroid.jpg)

2.) Tablets are flying off the shelves.

(http://www.technologyreview.com/sites/default/files/styles/view_body_embed/public/images/MeekerIPad.jpg)

3.) Mobile Internet traffic numbers are lifting off.

(http://www.technologyreview.com/sites/default/files/styles/view_body_embed/public/images/MeekerMobileTraffic.jpg)

4.) The Windows-Intel combination is quickly losing its position.

(http://www.technologyreview.com/sites/default/files/styles/view_body_embed/public/images/MeekerWintel.jpg)
Title: Re: GOOGL - Google
Post by: hellsten on December 13, 2012, 07:21:23 AM
Statistics or lies?

Goldman Sachs: Windows' true market share is just 20%:
http://www.theregister.co.uk/2012/12/13/windows_market_share_just_20percent/

Mobile vs. desktop:
http://gs.statcounter.com/#mobile_vs_desktop-ww-monthly-201111-201211
http://gs.statcounter.com/#mobile_vs_desktop-ww-monthly-200901-201211

For a more technical discussion see:
http://news.ycombinator.com/item?id=4915382
Title: Re: GOOGL - Google
Post by: Palantir on December 13, 2012, 07:21:58 AM
GOOG has been kicking a** since the decline, which I believe was merely a short term correction.
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 08:26:32 AM
Statistics or lies?

You can certainly argue about the validity of the specific numbers or percentages, but the overall trend is pretty clear.
Title: Re: GOOGL - Google
Post by: hellsten on December 13, 2012, 10:25:57 AM
Statistics or lies?

You can certainly argue about the validity of the specific numbers or percentages, but the overall trend is pretty clear.

The trend is clear, but I wouldn't make any bets on who's going to win.

Eric Schmidt says Android is winning:
http://www.iphonehacks.com/2012/12/eric-schmidt-thinks-android-has-already-won-the-platform-war-i-beg-to-differ.html

Quote
“This is a huge platform change; this is of the scale of 20 years ago – Microsoft versus Apple,” he said. “We’re winning that war pretty clearly now.”

How much revenue and profit does Google get from Android compared to Apple and MSFT? What killer apps does Android have that iOS or Windows Phone doesn't have?
Title: Re: GOOGL - Google
Post by: valueInv on December 13, 2012, 11:07:49 AM
The bigger queetion is what has been Google's earning trend as Android 'wins'?
Title: Re: GOOGL - Google
Post by: Palantir on December 13, 2012, 11:51:30 AM
Android might "win", but as the platform gains prominence, other companies can fork it, as it is open source.


Furthermore, we cannot rule out political risk, countries may not want Google to get too dominant.
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 11:59:08 AM
Android might "win", but as the platform gains prominence, other companies can fork it, as it is open source.

Furthermore, we cannot rule out political risk, countries may not want Google to get too dominant.

I think you can point to iOS as an argument against calling Android a monopoly.  Also like you said anyone can fork it, so the existence of Kindle Fire HD, Nook HD, etc and Google's low amount of profits from Android are all proof that Google isn't going to take over the world and hold it for ransom using Android.  However, can you imagine the position Apple would be in if Android didn't exist?   It would be the 1990s Microsoft all over again.
Title: Re: GOOGL - Google
Post by: hellsten on December 13, 2012, 12:26:28 PM
Here are a few articles that try to explain how much Google makes on Android:

http://www.guardian.co.uk/technology/2012/mar/29/google-earns-more-iphone-android
Quote
Google's Android has generated just $550m since 2008, figures suggest

http://appleinsider.com/articles/12/03/29/google_earns_80_of_its_mobile_revenue_from_ios_just_20_from_android.html

Quote
Despite Android being widely used by smartphone makers, Google has struggled to gain traction for app sales in Android Market. Apple's iOS platform continues to eat up around 90 percent of mobile software revenues.

http://www.asymco.com/2012/05/15/android-revenues-in-perspective/

Quote
As various members of the Android ecosystem are rewarded from the 40% revenue share of Android, it would be important to consider the scales involved in these illustrations when considering the influence Google exerts. It could be argued that Google’s spreading of wealth from search creates strong incentives for participation in its ecosystem.

However, there is little wealth created. 40% of a little is a lot less.
http://www.forbes.com/sites/darcytravlos/2012/08/22/five-reasons-why-google-android-versus-apple-ios-market-share-numbers-dont-matter/

Quote
Google’s business model is to give away Android in order to make $10 per device on search and ads, although it is estimated that Google only makes $6.50 per device.  Apple makes an estimated $300 per iPhone, and then sells apps and ads.

I'm not convinced Android is a good investment for Google. They spent 12.5 billion on Motorola Mobility… Does Android have a moat versus iOS or Microsoft? I don't think so.

Anyway, just thinking out loud. I believe Google is a high quality business that has a wide moat around their ad network.
Title: Re: GOOGL - Google
Post by: DCG on December 13, 2012, 12:32:08 PM
I'm not convinced Android is a good investment for Google. They spent 12.5 billion on Motorola Mobility… Does Android have a moat versus iOS or Microsoft? I don't think so.

Anyway, just thinking out loud. I believe Google is a high quality business that has a wide moat around their ad network.

Agreed....at least mostly. Regarding whether Android was a good investment, getting people to use Android gets them to use other Google Services and helps ensure they use Google search on mobile devices, which lets them display more ads.

And Google could always decide to start licensing Android (which I think they should do).
Title: Re: GOOGL - Google
Post by: txlaw on December 13, 2012, 12:52:35 PM
I'm not convinced Android is a good investment for Google. They spent 12.5 billion on Motorola Mobility… Does Android have a moat versus iOS or Microsoft? I don't think so.

Anyway, just thinking out loud. I believe Google is a high quality business that has a wide moat around their ad network.

Agreed....at least mostly. Regarding whether Android was a good investment, getting people to use Android gets them to use other Google Services and helps ensure they use Google search on mobile devices, which lets them display more ads.

And Google could always decide to start licensing Android (which I think they should do).

I actually have the opposite view of Android. 

Android is very low cost (despite the patent issues) for hardware manufacturers, and the difference between it and that other OS (I own an iPhone 5 btw -- it's great!) is increasingly getting smaller and smaller.  Most importantly for Google, though, is that Android is absolutely, positively designed to fit with Google's mission to be the dominant search and augmented reality company. 

So it doesn't matter much if they make any direct revenue off of Android -- I think they've already made their money back on it by displacing MSFT and making sure that GOOG search stays number 1.  I think it's highly likely that they will write case studies about the Android strategy in the future, even if Android fades away and something else replaces it (e.g., another GOOG OS: ChromeOS).
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 01:06:19 PM
I actually have the opposite view of Android. 

Android is very low cost (despite the patent issues) for hardware manufacturers, and the difference between it and that other OS (I own an iPhone 5 btw -- it's great!) is increasingly getting smaller and smaller.  Most importantly for Google, though, is that Android is absolutely, positively designed to fit with Google's mission to be the dominant search and augmented reality company. 

So it doesn't matter much if they make any direct revenue off of Android -- I think they've already made their money back on it by displacing MSFT and making sure that GOOG search stays number 1.  I think it's highly likely that they will write case studies about the Android strategy in the future, even if Android fades away and something else replaces it (e.g., another GOOG OS: ChromeOS).

That is my opinion as well.  I don't think Google cares if it ever directly makes a penny from Android, nor from its fiber to the home business.  What Google wants is for every human being to be connected to the internet all the time with as fast a connection as possible.  If Android didn't exist, many fewer people would have smartphones.  Right now the iPad dominates (just like the iPhone dominated at first), but I predict that a few years from now inexpensive Android based tablets will outsell iOS tablets.  Sure Apple will make the margins and people will scream that Google isn't making any money off of it, but it will put tablets into the hands of countless people who would never spend the money to get an iPad, just like there are tons of people world wide who are walking around with Android phones who wouldn't have a smartphone at all otherwise.    How much more difficult would it be for Amazon, or Barnes&Nobel, or Acer, or HTC, or Samsung, to compete with Apple if it weren't for Android?  Would mobile web traffic be 14% off all web traffic today if Android never existed? No it would be much smaller.  IMHO, this is all Google is trying to accomplish here.  Google is looking for ways to get more people online, get them online with faster connections, and getting them to stay online more of the time.
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 01:18:35 PM
I also want to add that Google doesn't care much about Android users buying apps, as long as they use Google's free apps, (gmail, maps, calendar, etc...).


I have an ipad and have noticed that even in the Apple environment, most of the really useful apps are free.  Only the games and other mindless distractions that you could live without anyway cost money.  I paid nothing for the Gmail app, or the Apple Calendar app (that I use to interface with my Google calendar), or Facebook, my bank's app, Fidelity's app, my RSS feed app, etc, etc, etc....  So what? People buy more games on iOS than on Android, that is just a function of people who use iOS having more disposable income than those who use Android (we knew that already), but that doesn't mean that people who use Android don't get just as much done as people who use iOS, because all of the most useful apps are free.
Title: Re: GOOGL - Google
Post by: valueInv on December 13, 2012, 01:19:45 PM
I'm not convinced Android is a good investment for Google. They spent 12.5 billion on Motorola Mobility… Does Android have a moat versus iOS or Microsoft? I don't think so.

Anyway, just thinking out loud. I believe Google is a high quality business that has a wide moat around their ad network.

Agreed....at least mostly. Regarding whether Android was a good investment, getting people to use Android gets them to use other Google Services and helps ensure they use Google search on mobile devices, which lets them display more ads.

And Google could always decide to start licensing Android (which I think they should do).

I actually have the opposite view of Android. 

Android is very low cost (despite the patent issues) for hardware manufacturers, and the difference between it and that other OS (I own an iPhone 5 btw -- it's great!) is increasingly getting smaller and smaller.  Most importantly for Google, though, is that Android is absolutely, positively designed to fit with Google's mission to be the dominant search and augmented reality company. 

So it doesn't matter much if they make any direct revenue off of Android -- I think they've already made their money back on it by displacing MSFT and making sure that GOOG search stays number 1.  I think it's highly likely that they will write case studies about the Android strategy in the future, even if Android fades away and something else replaces it (e.g., another GOOG OS: ChromeOS).

They paid 13B to 'defend' Android in addition to losing 1B per year at Motorola. I think it does matter how much money they make offa Android.

BTW, they are also the search provider for iPhone. They would have made the same amount of money without Android.

Android isn't about money. It's about egos and empire building.
Title: Re: GOOGL - Google
Post by: txlaw on December 13, 2012, 01:19:52 PM
I actually have the opposite view of Android. 

Android is very low cost (despite the patent issues) for hardware manufacturers, and the difference between it and that other OS (I own an iPhone 5 btw -- it's great!) is increasingly getting smaller and smaller.  Most importantly for Google, though, is that Android is absolutely, positively designed to fit with Google's mission to be the dominant search and augmented reality company. 

So it doesn't matter much if they make any direct revenue off of Android -- I think they've already made their money back on it by displacing MSFT and making sure that GOOG search stays number 1.  I think it's highly likely that they will write case studies about the Android strategy in the future, even if Android fades away and something else replaces it (e.g., another GOOG OS: ChromeOS).

That is my opinion as well.  I don't think Google cares if it ever directly makes a penny from Android, nor from its fiber to the home business.  What Google wants is for every human being to be connected to the internet all the time with as fast a connection as possible.  If Android didn't exist, many fewer people would have smartphones.  Right now the iPad dominates (just like the iPhone dominated at first), but I predict that a few years from now inexpensive Android based tablets will outsell iOS tablets.  Sure Apple will make the margins and people will scream that Google isn't making any money off of it, but it will put tablets into the hands of countless people who would never spend the money to get an iPad, just like there are tons of people world wide who are walking around with Android phones who wouldn't have a smartphone at all otherwise.    How much more difficult would it be for Amazon, or Barnes&Nobel, or Acer, or HTC, or Samsung, to compete with Apple if it weren't for Android?  Would mobile web traffic be 14% off all web traffic today if Android never existed? No it would be much smaller.  IMHO, this is all Google is trying to accomplish here.  Google is looking for ways to get more people online, get them online with faster connections, and getting them to stay online more of the time.

Absolutely.  And I'd go further. 

GOOG is a search/AR/AI company.  It tries to deliver answers to what people are searching for, and it even hopes to anticipate what people are looking for based on user profiles.  It also wants people to be able to overlay data over the physical world (think Google Glass). 

Android helps them to do this by driving the use of GOOG products and services, which results in a virtuous cycle that increases GOOG's moat in this regard.

GOOG is also an infrastructure company.  It delivers computing power to businesses/developers on an industrial scale (Compute Engine and App Engine).  It also delivers video to the masses (YouTube, which happens to be both an infrastructure and content company).

Android drives the use of that infrastructure by connecting people to the Internet all the time.

GOOG has a real moat, and Android helps that moat.  I personally think GOOG will be here for a long time.
Title: Re: GOOGL - Google
Post by: rimm_never_sleeps on December 13, 2012, 01:25:47 PM
android has been a grand slam for goog. from zero to dominating global smart phone share in the space of 4 years. they also know how to do mapping, which IOS users are unabashedly grateful for.
Title: Re: GOOGL - Google
Post by: Palantir on December 13, 2012, 01:27:43 PM
I agree with rkababang.

Google is a search advertising firm. Everything they do tries to funnel into keeping users online and therefore using their search. Their business model has always been to give stuff away for free and get people using their search/other products that will allow them to sell advertising. They're slightly moving away from that model in charging enterprises for Google Apps.

I think it's fair to say that Apple and Google are not really competing in the same market, Apple is happy being the niche provider, and if they use Google products like search, they can coexist.

I think GOOG's biggest worry has to be FB, as FB becomes the centerpiece of how people spend their time online, it's a threat to Google's products.

PS. I am long MSFT, GOOG, and FB.
Title: Re: GOOGL - Google
Post by: txlaw on December 13, 2012, 01:27:49 PM
I'm not convinced Android is a good investment for Google. They spent 12.5 billion on Motorola Mobility… Does Android have a moat versus iOS or Microsoft? I don't think so.

Anyway, just thinking out loud. I believe Google is a high quality business that has a wide moat around their ad network.

Agreed....at least mostly. Regarding whether Android was a good investment, getting people to use Android gets them to use other Google Services and helps ensure they use Google search on mobile devices, which lets them display more ads.

And Google could always decide to start licensing Android (which I think they should do).

I actually have the opposite view of Android. 

Android is very low cost (despite the patent issues) for hardware manufacturers, and the difference between it and that other OS (I own an iPhone 5 btw -- it's great!) is increasingly getting smaller and smaller.  Most importantly for Google, though, is that Android is absolutely, positively designed to fit with Google's mission to be the dominant search and augmented reality company. 

So it doesn't matter much if they make any direct revenue off of Android -- I think they've already made their money back on it by displacing MSFT and making sure that GOOG search stays number 1.  I think it's highly likely that they will write case studies about the Android strategy in the future, even if Android fades away and something else replaces it (e.g., another GOOG OS: ChromeOS).

They paid 13B to 'defend' Android in addition to losing 1B per year at Motorola. I think it does matter how much money they make offa Android.

BTW, they are also the search provider for iPhone. They would have made the same amount of money without Android.

Android isn't about money. It's about egos and empire building.

I disagree, and I think you are not looking at the counter-factual.  How much revenue would GOOG have foregone for the next ten years if they didn't put smart phones in the hands of people all across the world who can't afford an iPhone?  And how could they trust that AAPL wouldn't flame out?  Or that AAPL would not try to extract high rents from GOOG in the future?  AAPL certainly isn't bashful about extracting rents from its partners and customers.

Your point about Motorola needing to be included in the cost is a good one, though, and I think that there is certainly an argument that they overpaid given what has turned out to be the value of the patents in assisting in a MAD strategy.  But the game isn't over yet.
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 01:32:53 PM
They paid 13B to 'defend' Android in addition to losing 1B per year at Motorola. I think it does matter how much money they make offa Android.

BTW, they are also the search provider for iPhone. They would have made the same amount of money without Android.

Android isn't about money. It's about egos and empire building.



Look at this chart again. Now picture the green (Android) going away (never having existed).  Sure the brown might be a little larger, but the reality is that many fewer people would have smartphones and Google would be at the mercy of one company.    I agree they can't spend too much on Android, but I think that is how they look at it.  Not "how much is Android making us", but rather "How much is Android costing us".   As long as it doesn't cost too much, it doesn't matter if it ever directly makes them anything.  I don't think ego has anything to do with it.  Google has built an empire and protecting it from Apple is exactly what they should be doing.

(http://www.technologyreview.com/sites/default/files/styles/view_body_embed/public/images/MeekerAndroid.jpg)
Title: Re: GOOGL - Google
Post by: rimm_never_sleeps on December 13, 2012, 01:37:27 PM
mmi did not cost $13b. it cost less than $10b when you factor in the over $3b of net cash on mmi balance sheet at time of acquisition. mot is not costing goog $1b of Cash operating losses. perhaps gaap, but certainly not cash losses. goog is restructuring the mot business. some of the reported losses are one time. finally goog is going to recover some of the cost of the mmi purchase when they sell the modem business. all in all, a very strategic purchase of over 24k valuable mobile patents for what is a pittance for goog. I certainly prefer that to letting $120b of cash sit there and do nothing.
Title: Re: GOOGL - Google
Post by: valueInv on December 13, 2012, 01:40:06 PM
I'm not convinced Android is a good investment for Google. They spent 12.5 billion on Motorola Mobility… Does Android have a moat versus iOS or Microsoft? I don't think so.

Anyway, just thinking out loud. I believe Google is a high quality business that has a wide moat around their ad network.

Agreed....at least mostly. Regarding whether Android was a good investment, getting people to use Android gets them to use other Google Services and helps ensure they use Google search on mobile devices, which lets them display more ads.

And Google could always decide to start licensing Android (which I think they should do).

I actually have the opposite view of Android. 

Android is very low cost (despite the patent issues) for hardware manufacturers, and the difference between it and that other OS (I own an iPhone 5 btw -- it's great!) is increasingly getting smaller and smaller.  Most importantly for Google, though, is that Android is absolutely, positively designed to fit with Google's mission to be the dominant search and augmented reality company. 

So it doesn't matter much if they make any direct revenue off of Android -- I think they've already made their money back on it by displacing MSFT and making sure that GOOG search stays number 1.  I think it's highly likely that they will write case studies about the Android strategy in the future, even if Android fades away and something else replaces it (e.g., another GOOG OS: ChromeOS).

They paid 13B to 'defend' Android in addition to losing 1B per year at Motorola. I think it does matter how much money they make offa Android.

BTW, they are also the search provider for iPhone. They would have made the same amount of money without Android.

Android isn't about money. It's about egos and empire building.

I disagree, and I think you are not looking at the counter-factual.  How much revenue would GOOG have foregone for the next ten years if they didn't put smart phones in the hands of people all across the world who can't afford an iPhone?  And how could they trust that AAPL wouldn't flame out?  Or that AAPL would not try to extract high rents from GOOG in the future?  AAPL certainly isn't bashful about extracting rents from its partners and customers.

Your point about Motorola needing to be included in the cost is a good one, though, and I think that there is certainly an argument that they overpaid given what has turned out to be the value of the patents in assisting in a MAD strategy.  But the game isn't over yet.

If people didn't use smartphones, they would use desktops to search. On android, they pay rents to operators and device makers instead of Apple. Why do you think their profits are dropping?

They are going to lose more money on Android. Not because of Apple but because of Amazon, which will enter smartphones soon.
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 01:48:52 PM
I agree with rkababang.

Google is a search advertising firm. Everything they do tries to funnel into keeping users online and therefore using their search. Their business model has always been to give stuff away for free and get people using their search/other products that will allow them to sell advertising. They're slightly moving away from that model in charging enterprises for Google Apps.

I think it's fair to say that Apple and Google are not really competing in the same market, Apple is happy being the niche provider, and if they use Google products like search, they can coexist.

I think GOOG's biggest worry has to be FB, as FB becomes the centerpiece of how people spend their time online, it's a threat to Google's products.

PS. I am long MSFT, GOOG, and FB.

Google has protected itself from Apple using Android.  How Google protects itself from FB is a more interesting question to me.  Google+ was an attempt to do so and I think it is safe to say that so far it has failed.  Apple has expensive products so Google was able to beat them by pretty much giving away the Android source code allowing hardware companies to undercut Apple on price.  The problem with Facebook is that it is free to its users already, so how does Google get people to use something else?  I personally think they will co-exist, you search Facebook for different things than you search Google for.  But I agree with you, if Google is vulnerable, it is from this direction.  What happens if FB comes up with a really good search engine for the web and a shopping search engine, etc... using what it knows about you to customize the results?   Come to think about it, why isn't FB doing that already?
Title: Re: GOOGL - Google
Post by: Liberty on December 13, 2012, 01:49:23 PM
If people didn't use smartphones, they would use desktops to search.

Are you saying that smartphones don't increase the absolute number of search queries?
Title: Re: GOOGL - Google
Post by: rkbabang on December 13, 2012, 01:54:48 PM
If people didn't use smartphones, they would use desktops to search.

That just isn't true at all.  How many times have you been talking with someone and you or someone in the group pulls out a phone to look up the topic?  This happens constantly, in coffee shops, malls/stores, breakrooms, living rooms, kitchen counters, in cars, walking down the street ....   Don't tell me they would have found a computer and went there instead.   People have access to the web, 24/7 wherever they happen to be and thus they use it more.  Not just a little more, a lot more.

If Amazon does comes up with a phone, it will most likely run a forked version of Android.
Title: Re: GOOGL - Google
Post by: txlaw on December 13, 2012, 01:59:59 PM
If people didn't use smartphones, they would use desktops to search. On android, they pay rents to operators and device makers instead of Apple. Why do you think their profits are dropping?

They are going to lose more money on Android. Not because of Apple but because of Amazon, which will enter smartphones soon.

See Liberty question and rkbabang's comment on the first point.  I don't really get why you think that searching on a desktop substitutes for search on a smart phone or tablet.

As to your point about hardware manufacturers losing money, that's a result of intense competition among hardware manufacturers, not the use of Android, per se.  Imagine what would happen if these guys didn't have Android.  They'd be dominated by Apple and would really be bleeding cash.
Title: Re: GOOGL - Google
Post by: valueInv on December 13, 2012, 11:55:47 PM
If people didn't use smartphones, they would use desktops to search.

Are you saying that smartphones don't increase the absolute number of search queries?

If you have data comparing growth trajectory of total queries/year of the 2004-2008 period to 2008-2012
period, do share.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 12:04:54 AM
If people didn't use smartphones, they would use desktops to search. On android, they pay rents to operators and device makers instead of Apple. Why do you think their profits are dropping?

They are going to lose more money on Android. Not because of Apple but because of Amazon, which will enter smartphones soon.

See Liberty question and rkbabang's comment on the first point.  I don't really get why you think that searching on a desktop substitutes for search on a smart phone or tablet.

As to your point about hardware manufacturers losing money, that's a result of intense competition among hardware manufacturers, not the use of Android, per se.  Imagine what would happen if these guys didn't have Android.  They'd be dominated by Apple and would really be bleeding cash.

I am talking not only about hardware manufacturers losing money, but also Google losing money on Android.

Do you think Asus is in the business of manufacturing a Nexus 7 for $200 and selling it at cost? Or Samsung is in business to sell Chromebooks at cost? Where do you think they make their margins from?

http://iterativepath.wordpress.com/2012/10/22/how-many-nexus-7-did-google-sell-and-at-what-margin-revenues-and-cost-of-revenues-analysis/
Title: Re: GOOGL - Google
Post by: bargainman on December 14, 2012, 03:05:02 AM
I am talking not only about hardware manufacturers losing money, but also Google losing money on Android.

Do you think Asus is in the business of manufacturing a Nexus 7 for $200 and selling it at cost? Or Samsung is in business to sell Chromebooks at cost? Where do you think they make their margins from?

http://iterativepath.wordpress.com/2012/10/22/how-many-nexus-7-did-google-sell-and-at-what-margin-revenues-and-cost-of-revenues-analysis/

One of Google's biggest competitive advantages is that they make their money from advertising which means they don't charge consumers or businesses who use search anything.  As such they give away all sorts of things in order to strengthen their search pool - ie people searching.  Android is just another way to increase and sustain that pool, the same way Chrome is.  Do you think they make money on Chrome?  Directly, no!  Indirectly by funneling people into search, yes!  Same goes for Android.  They probably don't right now, but they will.  Android is part of their distribution system and hence their moat.  They lose money all all sorts of moat building, and make it up in search.  Other companies need to get people/consumers to pay for software (MSFT), hardware(Apple), to make money. Google gives away the sw and hw, and makes all their money on the back end.  Disruptive business model is probably their biggest advantage.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 06:31:04 AM
I am talking not only about hardware manufacturers losing money, but also Google losing money on Android.

Do you think Asus is in the business of manufacturing a Nexus 7 for $200 and selling it at cost? Or Samsung is in business to sell Chromebooks at cost? Where do you think they make their margins from?

http://iterativepath.wordpress.com/2012/10/22/how-many-nexus-7-did-google-sell-and-at-what-margin-revenues-and-cost-of-revenues-analysis/

One of Google's biggest competitive advantages is that they make their money from advertising which means they don't charge consumers or businesses who use search anything.  As such they give away all sorts of things in order to strengthen their search pool - ie people searching.  Android is just another way to increase and sustain that pool, the same way Chrome is.  Do you think they make money on Chrome?  Directly, no!  Indirectly by funneling people into search, yes!  Same goes for Android.  They probably don't right now, but they will.  Android is part of their distribution system and hence their moat.  They lose money all all sorts of moat building, and make it up in search.  Other companies need to get people/consumers to pay for software (MSFT), hardware(Apple), to make money. Google gives away the sw and hw, and makes all their money on the back end.  Disruptive business model is probably their biggest advantage.

The reason why search is such a great business is the cost of serving a query and an ad is minuscule compared to the revenue. That is why even with a a tiny click through rate, they make huge amounts of money. Same with email, etc. The cost/ user for Chrome is tiny.

With hardware , networks etc the costs/ user is multiple orders of magnitude higher. Lets say the y promised Asus $30 / device. How many searches does a user have to perform to make that kind of money with a 0.05 ctr and 10c per click. How many apps do that have to buy with 70% free and the rest costing 99c with the app maker taking 70% of the price. How does that change Googles margins ?

Now the economics look more like AT&T or HTC rather than Google. Wonder why their profits dropped 20% yoy last quarter?
Title: Re: GOOGL - Google
Post by: DCG on December 14, 2012, 07:10:45 AM
The problem with search is that it's typically not very profitable for businesses paying for ads now that prices have been driven up pretty high. Businesses can easily cut back on thd amount they're spending on Adwords.
Title: Re: GOOGL - Google
Post by: txlaw on December 14, 2012, 07:15:56 AM
If people didn't use smartphones, they would use desktops to search. On android, they pay rents to operators and device makers instead of Apple. Why do you think their profits are dropping?

They are going to lose more money on Android. Not because of Apple but because of Amazon, which will enter smartphones soon.

See Liberty question and rkbabang's comment on the first point.  I don't really get why you think that searching on a desktop substitutes for search on a smart phone or tablet.

As to your point about hardware manufacturers losing money, that's a result of intense competition among hardware manufacturers, not the use of Android, per se.  Imagine what would happen if these guys didn't have Android.  They'd be dominated by Apple and would really be bleeding cash.

I am talking not only about hardware manufacturers losing money, but also Google losing money on Android.

Do you think Asus is in the business of manufacturing a Nexus 7 for $200 and selling it at cost? Or Samsung is in business to sell Chromebooks at cost? Where do you think they make their margins from?

http://iterativepath.wordpress.com/2012/10/22/how-many-nexus-7-did-google-sell-and-at-what-margin-revenues-and-cost-of-revenues-analysis/

Are you assuming that GOOG will subsidize all Android hardware into perpetuity?  That's a very odd POV.

GOOG will only sell the Nexus line at their cost (or below their cost), and Nexus will remain a small subset of total Android phones sold per year. 

You can think of the Nexus line as a yearly expense that increases GOOG's moat.
Title: Re: GOOGL - Google
Post by: txlaw on December 14, 2012, 07:20:33 AM
Come to think about it, why isn't FB doing that already?

rkbabang, FB is very aligned with MSFT.  In fact, Zuckerberg recently said that he'd be working at MSFT if he hadn't started FB.

Bing already integrates FB into its personalized search results.  I wouldn't be surprised if FB and MSFT  team up strongly to take on GOOG. 

That's why I think FB won't just implode.  Of course, whether it's worth $60 billion is another story.
Title: Re: GOOGL - Google
Post by: Palantir on December 14, 2012, 07:21:03 AM
How exactly does Google lose money on Android? They're not building and selling hardware.....and before you mention Nexus, that's only a tiny little piece. You're blaming declining margins on being a hardware manufacturer, when that's not the case...
Title: Re: GOOGL - Google
Post by: DCG on December 14, 2012, 07:30:38 AM
How exactly does Google lose money on Android? They're not building and selling hardware.....and before you mention Nexus, that's only a tiny little piece. You're blaming declining margins on being a hardware manufacturer, when that's not the case...

Well, between development costs, the Motorolla acquisition, patent lawsuits, etc, Google has spend $15-$20 Billion on Android and has made very little money from it. A majority of the money they make on mobile search comes from iPhone users, which is why Google is motivated to update apps like Maps, Gmails and others for iPhone instead of making them exclusive to Android.
Title: Re: GOOGL - Google
Post by: Palantir on December 14, 2012, 07:31:43 AM
Motorola is not Android, and the patent costs have mostly been between the OEMs and MSFT/AAPL. They're making apps for iOS because they want to benefit from people being online. They are competing with Apple, but they have a very different view of this space....
Title: Re: GOOGL - Google
Post by: DCG on December 14, 2012, 07:35:21 AM
Motorola is not Android, and the patent costs have mostly been between the OEMs and MSFT/AAPL. They're making apps for iOS because they want to benefit from people being online. They are competing with Apple, but they have a very different view of this space....

If they did not have Android, they would've had zero need/reason to purchase Motorolla.
Title: Re: GOOGL - Google
Post by: Palantir on December 14, 2012, 07:38:48 AM
But you don't know the opportunity cost of that. Without Android, google could potentially miss out on the mobile market as they'd remain a niche search provider. Android allows Google to be a "platform" rather than a "product" which plugs into a "platform".

For value investors you guys are thinking very short term....A few billion USD is nothing for Google, and in this industry you need to invest a lot of money into projects that have a serious risk of failure to stay relevant. Returning cash to shareholders is not always the answer. MSFT is pouring billions into Bing for similar reasons. They must have presence in this market.
Title: Re: GOOGL - Google
Post by: Palantir on December 14, 2012, 08:04:22 AM
I think GOOG is undervalued all the way up to 850....after that maybe fairly valued.
Title: Re: GOOGL - Google
Post by: DCG on December 14, 2012, 08:10:23 AM
But you don't know the opportunity cost of that. Without Android, google could potentially miss out on the mobile market as they'd remain a niche search provider. Android allows Google to be a "platform" rather than a "product" which plugs into a "platform".


I agree with this; I was just responding to your question about how Google loses money on Android. So far, they've spend a lot more money on Android (and things related to Android) than they've made. So far is of course they key phrase here.
Title: Re: GOOGL - Google
Post by: Palantir on December 14, 2012, 08:11:57 AM
^ Fair enough, I was just taking exception to ValueInv's comments that Motorola is the reason their margins are down....as he was implying Google is now a hardware manufacturer.

 Anyways, I don't think the loss is that big of a deal if Android gains a lot of traction and marketshare and people keep using their search....which is very profitable.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 08:39:37 AM
How exactly does Google lose money on Android? They're not building and selling hardware.....and before you mention Nexus, that's only a tiny little piece. You're blaming declining margins on being a hardware manufacturer, when that's not the case...

Because  at $200 they are pricing out non subsidized Android devices. Remove subsidies and Apple becomes more price competitive and Android loses or Amazon takes over the Android market. Google has painted itself into a corner.
Title: Re: GOOGL - Google
Post by: jeffmori7 on December 14, 2012, 08:43:24 AM
How exactly does Google lose money on Android? They're not building and selling hardware.....and before you mention Nexus, that's only a tiny little piece. You're blaming declining margins on being a hardware manufacturer, when that's not the case...

Because  at $200 they are pricing out non subsidized Android devices. Remove subsidies and Apple becomes more price competitive and Android loses or Amazon takes over the Android market. Google has painted itself into a corner.

Not necessarily valueInv, because the subsidized devices are more flagship devices designed by Google to show other OEMs what they expect from Android devices. I don't think they want to become large-scale manufacturer. 
Title: Re: GOOGL - Google
Post by: Palantir on December 14, 2012, 09:07:16 AM
They are only a segment of Android devices. I don't think you have provided any support for your assertion - that Google's declining margins are due to it having similar economics to an OEM because it is turning into an OEM.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 09:17:45 AM
But you don't know the opportunity cost of that. Without Android, google could potentially miss out on the mobile market as they'd remain a niche search provider. Android allows Google to be a "platform" rather than a "product" which plugs into a "platform".

For value investors you guys are thinking very short term....A few billion USD is nothing for Google, and in this industry you need to invest a lot of money into projects that have a serious risk of failure to stay relevant. Returning cash to shareholders is not always the answer. MSFT is pouring billions into Bing for similar reasons. They must have presence in this market.

You keep doing that and profits keep going down. What pe does MSFT trade at? What happens when google has to subsidize your device, your Internet connection, your books, your content?

Do you realize the capex required to build a nationwide fiber network to the home? What happens when you spend that capex and charge a fraction of existing providers? Do the math, compare what Google is making vs what they will end up spending. This is not a "few Billion" dollars.
Title: Re: GOOGL - Google
Post by: Liberty on December 14, 2012, 09:45:17 AM
Do you realize the capex required to build a nationwide fiber network to the home?

Isn't Google Fiber using most dark fiber that the company bought cheaply after the dot com bust? It seems like the only thing left is to provide the last mile connection, which is probably expensive but less so than if they had to build out the whole fiber network. User fees can probably pay for a lot of that last-mile stuff.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 11:07:33 AM
Do you realize the capex required to build a nationwide fiber network to the home?

Isn't Google Fiber using most dark fiber that the company bought cheaply after the dot com bust? It seems like the only thing left is to provide the last mile connection, which is probably expensive but less so than if they had to build out the whole fiber network. User fees can probably pay for a lot of that last-mile stuff.

Wow!! Google bought fiber into interconnect facilities to reduce bandwidth costs for its data centers. That is a far cry to rolling out nationwide metro and last mile networks.

Look up the history of CLECs to see what happened the last time someone tried  a flavor of that.
Title: Re: GOOGL - Google
Post by: txlaw on December 14, 2012, 11:27:47 AM
Do you realize the capex required to build a nationwide fiber network to the home?

Isn't Google Fiber using most dark fiber that the company bought cheaply after the dot com bust? It seems like the only thing left is to provide the last mile connection, which is probably expensive but less so than if they had to build out the whole fiber network. User fees can probably pay for a lot of that last-mile stuff.

Wow!! Google bought fiber into interconnect facilities to reduce bandwidth costs for its data centers. That is a far cry to rolling out nationwide metro and last mile networks.

Look up the history of CLECs to see what happened the last time someone tried  a flavor of that.

Since when is GOOG planning on rolling out a nationwide FTTH operation?
Title: Re: GOOGL - Google
Post by: Liberty on December 14, 2012, 11:39:27 AM
This isn't something I've researched deeply (I don't hold GOOG anymore, so not following as closely), but I know they've been buying lots of dark fiber since 2005.

Let's say hundreds of millions, if not billions, have been spent to lay these fat pipes across the US over many years, but then for whatever reason they stay dark (not needed, bankruptcy of the company that built it, whatever). Google buys those for pennies on the dollar, and then it can offer fiber access to cities that are close to those pipes, with only last-mile connections to do (ie. there was certainly a google-owned dark fiber line running through or next to kansas city, they didn't pick these cities at random).

That's expensive, but a lot less expensive than buildings hundreds of miles of fiber across the country..

And the nice thing is, after enough places have fiber access like this, it'll force other ISPs/telecoms to try to match Google's offering and invest more in their network (standing on tiptoes at a parade -- once one person does it, everybody has to). That's a nice leveraging of the investment, since Google benefits from increased web usage even if not on its own network.

Now I have no idea how much money it'll make, or how exactly one could determine all the indirect ways in which it can help, but as a long-term investment, it has potential IMO.
Title: Re: GOOGL - Google
Post by: fareastwarriors on December 14, 2012, 11:48:36 AM
This isn't something I've researched deeply (I don't hold GOOG anymore, so not following as closely), but I know they've been buying lots of dark fiber since 2005.

Let's say hundreds of millions, if not billions, have been spent to lay these fat pipes across the US over many years, but then for whatever reason they stay dark (not needed, bankruptcy of the company that built it, whatever). Google buys those for pennies on the dollar, and then it can offer fiber access to cities that are close to those pipes, with only last-mile connections to do (ie. there was certainly a google-owned dark fiber line running through or next to kansas city, they didn't pick these cities at random).

That's expensive, but a lot less expensive than buildings hundreds of miles of fiber across the country..

And the nice thing is, after enough places have fiber access like this, it'll force other ISPs/telecoms to try to match Google's offering and invest more in their network (standing on tiptoes at a parade -- once one person does it, everybody has to). That's a nice leveraging of the investment, since Google benefits from increased web usage even if not on its own network.

Now I have no idea how much money it'll make, or how exactly one could determine all the indirect ways in which it can help, but as a long-term investment, it has potential IMO.

Well anything has to be better than my current DSL with AT&T. So slow....

Title: Re: GOOGL - Google
Post by: ItsAValueTrap on December 14, 2012, 12:46:57 PM
Quote
The problem with search is that it's typically not very profitable for businesses paying for ads now that prices have been driven up pretty high. Businesses can easily cut back on thd amount they're spending on Adwords.
That's now how most people on Google advertise.

You can track your ads right down to each conversion/sale.  You know how much money you are making from your ad campaigns*.  Based on that information, it becomes an optimization question where you adjust your CPC bid price to maximize your profit.  Google has an algorithm that will do this for you if you let Google take charge of your ad campaign.

*Tracking isn't perfect (i.e. blocking cookies, javascript).  Some conversions won't be tracked.

It's not like other forms of advertising where you are often unsure of your ROI... e.g. yellow pages, TV, print, etc.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 01:22:23 PM
This isn't something I've researched deeply (I don't hold GOOG anymore, so not following as closely), but I know they've been buying lots of dark fiber since 2005.

Let's say hundreds of millions, if not billions, have been spent to lay these fat pipes across the US over many years, but then for whatever reason they stay dark (not needed, bankruptcy of the company that built it, whatever). Google buys those for pennies on the dollar, and then it can offer fiber access to cities that are close to those pipes, with only last-mile connections to do (ie. there was certainly a google-owned dark fiber line running through or next to kansas city, they didn't pick these cities at random).

That's expensive, but a lot less expensive than buildings hundreds of miles of fiber across the country..

And the nice thing is, after enough places have fiber access like this, it'll force other ISPs/telecoms to try to match Google's offering and invest more in their network (standing on tiptoes at a parade -- once one person does it, everybody has to). That's a nice leveraging of the investment, since Google benefits from increased web usage even if not on its own network.

Now I have no idea how much money it'll make, or how exactly one could determine all the indirect ways in which it can help, but as a long-term investment, it has potential IMO.

Do some research on what kind of fiber they've been buying.
Title: Re: GOOGL - Google
Post by: DCG on December 14, 2012, 01:39:05 PM
Quote
The problem with search is that it's typically not very profitable for businesses paying for ads now that prices have been driven up pretty high. Businesses can easily cut back on thd amount they're spending on Adwords.
That's now how most people on Google advertise.

You can track your ads right down to each conversion/sale.  You know how much money you are making from your ad campaigns*.  Based on that information, it becomes an optimization question where you adjust your CPC bid price to maximize your profit.  Google has an algorithm that will do this for you if you let Google take charge of your ad campaign.

*Tracking isn't perfect (i.e. blocking cookies, javascript).  Some conversions won't be tracked.

It's not like other forms of advertising where you are often unsure of your ROI... e.g. yellow pages, TV, print, etc.

Being able to track and optimize your ads only helps to an extent.

For popular keywords within nearly any market, the bid per click to get on the first page or 2 of Google of Google (which is really what you need) can often be $3-$10 per click...and higher. When sites typically convert at below 2%, it is tough for businesses to justify the cost. (ie Spending $100 on Adwords for 1 or 2 orders with a profit margin of maybe $10, for example). For example, I have a (very) small site and spent $150 on adwords ads over the last couple weeks. That resulted in 2 orders, but a total profit about $30. Not a good investment. I'm sure there are things I've could've done better (I'm not new to advertising on adwords though, and have experience optimizing ads), but a lot of businesses are having this same experience. The same keywords that were .35 a click a few years ago, are now around $2.50 per click to get on the first page.

You used to be able to bid less on long-tail keywords and get more clicks, but the volume of businesses/sites now bidding on these keywords is now quite a bit larger than it was 5-10 years ago.

It y
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on December 14, 2012, 01:50:54 PM
DCG... that's called competition?

Why would the guys with the top spots on Adwords bid less?
So that they can make less money?
So that they can be nice to you and give you a break?  ;)
Title: Re: GOOGL - Google
Post by: DCG on December 14, 2012, 02:09:48 PM
DCG... that's called competition?

Why would the guys with the top spots on Adwords bid less?
So that they can make less money?
So that they can be nice to you and give you a break?  ;)

Huh? That's not really how adwords work. Anyone can bid to be in the top spots (for the most part..bid amount isn't the only criteria google uses for ad placement). Just because someone is bidding for a top spot at any given moment does not mean it's profitable for them in the long run.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on December 14, 2012, 02:14:07 PM
I guess I am making the assumption that the top bidders are measuring their ROI and optimizing it.  They're being stupid if they aren't profitable.

*There are companies out there that advertise for branding purposes with uncertain ROI.  I don't think that Google is vulnerable to these advertisers going away because I assume that Google doesn't have a lot of them.  Facebook could have this problem though.
Title: Re: GOOGL - Google
Post by: valueInv on December 14, 2012, 02:21:57 PM
I guess I am making the assumption that the top bidders are measuring their ROI and optimizing it.  They're being stupid if they aren't profitable.

*There are companies out there that advertise for branding purposes with uncertain ROI.  I don't think that Google is vulnerable to these advertisers going away because I assume that Google doesn't have a lot of them.  Facebook could have this problem though.

Take a look at googles % of display ad revenues and where they expect much of their advertising growth to come from.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on December 14, 2012, 02:56:45 PM
Of all the advertising mediums out there, Google probably has the least amount of dumb advertisers as customers (ignoring affiliate networks).  You guys are focusing on irrelevant noise.
Title: Re: GOOGL - Google
Post by: rkbabang on December 17, 2012, 06:49:34 AM
Kurzweil joins Google to work on new projects involving machine learning and language processing (http://www.kurzweilai.net/kurzweil-joins-google-to-work-on-new-projects-involving-machine-learning-and-language-processing)

"Ray Kurzweil confirmed today that he will be joining Google to work on new projects involving machine learning and language processing. 'I’m excited to share that I’ll be joining Google as Director of Engineering...I’m thrilled to be teaming up with Google to work on some of the hardest problems in computer science so we can turn the next decade’s ‘unrealistic’ visions into reality.'"
Title: Re: GOOGL - Google
Post by: Palantir on December 17, 2012, 07:16:23 AM
Looks like the FTC probe is ending in no repercussions...GOOG continues its steady march up.....
Title: Re: GOOGL - Google
Post by: txlaw on December 17, 2012, 04:35:06 PM
YouTube Capture:

http://www.youtube.com/watch?feature=player_embedded&v=l0sOzdXce6o

Yet another example of why GOOG is an infrastructure company -- and why YouTube was a brilliant acquisition. 
Title: Re: GOOGL - Google
Post by: rimm_never_sleeps on December 19, 2012, 04:25:25 PM
goog sells the modem business

http://9to5google.com/2012/12/19/google-gets-2-35b-of-its-motorola-purchase-back-with-its-sale-of-motorola-home-to-arris/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+9to5Google+%289to5+Google+-+Beyond+Good+and+Evil%29
Title: Re: GOOGL - Google
Post by: rkbabang on December 20, 2012, 08:31:21 AM
goog sells the modem business

http://9to5google.com/2012/12/19/google-gets-2-35b-of-its-motorola-purchase-back-with-its-sale-of-motorola-home-to-arris/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+9to5Google+%289to5+Google+-+Beyond+Good+and+Evil%29

That puzzles me a bit.  I thought they wanted that business.  With their fiber to the home project it seemed like a good fit, not to mention I think Apple will be going after the Television next in a big way.
Title: Re: GOOGL - Google
Post by: txlaw on December 20, 2012, 08:43:24 AM
goog sells the modem business

http://9to5google.com/2012/12/19/google-gets-2-35b-of-its-motorola-purchase-back-with-its-sale-of-motorola-home-to-arris/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+9to5Google+%289to5+Google+-+Beyond+Good+and+Evil%29

That puzzles me a bit.  I thought they wanted that business.  With their fiber to the home project it seemed like a good fit, not to mention I think Apple will be going after the Television next in a big way.

I think that GOOG is less interested in being in hardware then you might think. 

They want GoogleTV to succeed as a platform, no doubt, but I'm sure they will be happy to partner with Sony, Samsung and other hardware manufacturers to get onto the TV screen.  They will probably have reference devices that are manufactured by others, just like with the LG Nexus 4, but I'm not so sure they want to be selling set top boxes. 
Title: Re: GOOGL - Google
Post by: rimm_never_sleeps on December 20, 2012, 08:46:24 AM
goog sells the modem business

http://9to5google.com/2012/12/19/google-gets-2-35b-of-its-motorola-purchase-back-with-its-sale-of-motorola-home-to-arris/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+9to5Google+%289to5+Google+-+Beyond+Good+and+Evil%29

That puzzles me a bit.  I thought they wanted that business.  With their fiber to the home project it seemed like a good fit, not to mention I think Apple will be going after the Television next in a big way.

that's a legacy technology business. I believe goog sees a lot of disruption in that business and wanted to exit.
Title: Re: GOOGL - Google
Post by: jeffmori7 on December 20, 2012, 08:54:32 AM
goog sells the modem business

http://9to5google.com/2012/12/19/google-gets-2-35b-of-its-motorola-purchase-back-with-its-sale-of-motorola-home-to-arris/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+9to5Google+%289to5+Google+-+Beyond+Good+and+Evil%29

That puzzles me a bit.  I thought they wanted that business.  With their fiber to the home project it seemed like a good fit, not to mention I think Apple will be going after the Television next in a big way.

I think that GOOG is less interested in being in hardware then you might think. 

They want GoogleTV to succeed as a platform, no doubt, but I'm sure they will be happy to partner with Sony, Samsung and other hardware manufacturers to get onto the TV screen.  They will probably have reference devices that are manufactured by others, just like with the LG Nexus 4, but I'm not so sure they want to be selling set top boxes.

Yes, and this is probably to have a word on reference design that they have kept a 15% stake in Arris, so they can control partially the design, without the need to be a true hardware company.
Title: Re: GOOGL - Google
Post by: Liberty on January 03, 2013, 11:51:35 AM
http://www.bloomberg.com/news/2013-01-03/google-investigation-by-ftc-ends-with-voluntary-changes.html

Google Investigation by FTC Ends With Voluntary Changes
Title: Re: GOOGL - Google
Post by: valueInv on January 07, 2013, 10:43:08 PM
Check out the last graph:

http://www.asymco.com/2012/11/14/google-vs-samsung/
Title: Re: GOOGL - Google
Post by: valueInv on January 10, 2013, 09:49:43 PM
Samsung getting in some hot water:

http://www.guardian.co.uk/technology/2012/dec/26/samsung-multibillion-fine-apple-europe

Google probably is too
Title: Re: GOOGL - Google
Post by: valueInv on January 19, 2013, 08:28:28 AM
I'm guessing more operators are going to want their pounds of flesh:

http://gigaom.com/2013/01/18/google-should-be-ashamed-for-paying-carriers-to-handle-its-traffic/
Title: Re: GOOGL - Google
Post by: valueInv on January 19, 2013, 08:30:08 AM
Ad rates across devices:

http://beta.fool.com/anindya7/2013/01/18/apple-surging-ahead-google-mobile-ads/21676/?ticker=AAPL&source=eogyholnk0000001
Title: Re: GOOGL - Google
Post by: VAL9000 on January 19, 2013, 11:34:20 AM
Ad rates across devices:

http://beta.fool.com/anindya7/2013/01/18/apple-surging-ahead-google-mobile-ads/21676/?ticker=AAPL&source=eogyholnk0000001

Some interesting information in there.  Check out the second image.  Look at those eCPM's rise across all devices.  Guess that should help resolve this issue that keeps popping up:

Take a look at googles % of display ad revenues and where they expect much of their advertising growth to come from.
Title: Re: GOOGL - Google
Post by: valueInv on January 21, 2013, 10:56:42 PM
Another group angling for their pound of flesh:

http://paidcontent.org/2013/01/21/report-google-made-e50-million-copyright-offer-french-publishers-want-e100-million/
Title: Re: GOOGL - Google
Post by: VAL9000 on January 22, 2013, 01:40:39 PM
From the Q4 Release - http://investor.google.com/earnings/2012/Q4_google_earnings.html

Quote
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.

We can see here how the cost per click is now starting to rise.  That's good news.
Title: Re: GOOGL - Google
Post by: valueInv on January 22, 2013, 02:21:09 PM
From the Q4 Release - http://investor.google.com/earnings/2012/Q4_google_earnings.html

Quote
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.

We can see here how the cost per click is now starting to rise.  That's good news.

What is going on with the margins?
Title: Re: GOOGL - Google
Post by: siddharth18 on January 22, 2013, 09:08:16 PM
From the Q4 Release - http://investor.google.com/earnings/2012/Q4_google_earnings.html

Quote
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.

We can see here how the cost per click is now starting to rise.  That's good news.

Cost per click or click thru rate is often the function of ad placement, text and color and is subject to fluctuations when Google changes formatting, layout and positioning.  As long as eCPM rises, that's all one should care about.
Title: Re: GOOGL - Google
Post by: valueInv on January 22, 2013, 09:14:09 PM
From the Q4 Release - http://investor.google.com/earnings/2012/Q4_google_earnings.html

Quote
Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 6% over the fourth quarter of 2011 and increased approximately 2% over the third quarter of 2012.

We can see here how the cost per click is now starting to rise.  That's good news.

Cost per click or click thru rate is often the function of ad placement, text and color and is subject to fluctuations when Google changes formatting, layout and positioning.  As long as eCPM rises, that's all one should care about.

I can understand click thru rate being a function of that. How is CPC affected by text or color?
Title: Re: GOOGL - Google
Post by: RichardGibbons on January 22, 2013, 10:11:18 PM
I believe CPC is seasonal, too, with the highest CPC in the fourth quarter.  (They sell keyword advertising using an auction format, so greater demand for keywords could push up the price that quarter.  So, QoQ is less relevant than YoY.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 23, 2013, 06:46:57 AM
Cost per click or click thru rate is often the function of ad placement, text and color and is subject to fluctuations when Google changes formatting, layout and positioning.  As long as eCPM rises, that's all one should care about.

CPC in this context is less about micro issues like placement and more about macro issues like supply and demand for online advertising.  Google runs an auction system for ads, so when they report average CPC they're talking about the entire system's earning capabilities.  All combinations are included.  New markets tend to have significantly more supply than demand, and that causes a drag on CPC.  Examples of this include developing countries and mobile.

eCPM is more of a content publisher metric, where the cost of impressions is significant and the choice of advertising partner highly relevant to earnings. 

I believe CPC is seasonal, too, with the highest CPC in the fourth quarter.  (They sell keyword advertising using an auction format, so greater demand for keywords could push up the price that quarter.  So, QoQ is less relevant than YoY.

CPC may be seasonal (I'm not sure - it makes sense but there are offsets), but the discussion here is about GOOG's ever-decreasing CPC.  If you look at Q3 v Q4 2011 you'll see an 8% decrease in CPC, which bucks the idea that CPC is seasonal.  That we had an increase Q3 v Q4 2012 is a sign that this is stabilizing.  The major concern has been that GOOG's model doesn't work as well on mobile platforms, which is where search traffic is growing most rapidly.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on January 23, 2013, 10:38:58 AM
I don't think that much attention should be paid to CPC.  There are many factors that could affect it that has nothing to do with the health of Google's search advertising business.

For many searches, no ads are displayed at all.  If Google allowed more ads to be displayed, they would get more clicks at a very low CPC.  These ads are typically pretty irrelevant to the search.  Google disables ads / makes the minimum CPC threshold high to improve the user experience.

There are other areas where Google experiments with its ad system.  It is often making tradeoffs that display less ads to improve the user experience.  Advertisers have a content score... those with low content scores have to pay more for advertising.  All these things have effects on the number of clicks and CPC.

Sometimes Google makes dramatic changes to its ad system that will cause short-term pain as Google effectively wipes out a lot of advertisers' campaigns.  The advertisers will adjust and come back with their ad dollars.  It has happened in the past and the right thing to do is to be greedy when other people are fearful out of ignorance.

2- Fundamentally, it would be bad for Google's advertising business if advertisers lost enthusiasm for advertising on it.

My thesis is that most advertisers on Google measure their ROI.  You can verify this by searching on Google and seeing how many people implement technology to track how well their ads are doing (e.g. affiliate links are a dead giveaway).  All these guys care about is ROI and optimizing it- as long as they are making money they will keep advertising.  Things that would cause this to go down would be: economic recession, their product is banned and can't be sold online anymore.  Other than that, I  don't see fundamental drivers that would cause Google's advertising customers to spend less.

If anything, Google has huge tailwinds behind it as you can buy more and more products online.  Online retailing is still in its infancy.  I would love to buy my tax software online (and if Ufile advertised on Google, I would click an ad).  It is (or was) cheaper in physical stores... I don't expect this to last. 

3- The other tailwind is that Google and its advertisers are getting better at advertising.  Google is constantly trying to figure out how to better deliver relevant ads (e.g. retargeting), making life easier for advertisers (Google Analytics, its automated ad bidding tools, etc.), etc. etc.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 23, 2013, 11:31:43 AM
I don't think that much attention should be paid to CPC.  There are many factors that could affect it that has nothing to do with the health of Google's search advertising business.

For many searches, no ads are displayed at all.  If Google allowed more ads to be displayed, they would get more clicks at a very low CPC.  These ads are typically pretty irrelevant to the search.  Google disables ads / makes the minimum CPC threshold high to improve the user experience.

There are other areas where Google experiments with its ad system.  It is often making tradeoffs that display less ads to improve the user experience.  Advertisers have a content score... those with low content scores have to pay more for advertising.  All these things have effects on the number of clicks and CPC.

Sometimes Google makes dramatic changes to its ad system that will cause short-term pain as Google effectively wipes out a lot of advertisers' campaigns.  The advertisers will adjust and come back with their ad dollars.  It has happened in the past and the right thing to do is to be greedy when other people are fearful out of ignorance.

This is true, Google does optimize its ad display based on "quality", but CPC is still an incredibly important metric when it comes to the health of the business.  The context of the above message related primarily to Google's main source of advertising growth: mobile.  The data in CPC shows that AdWords are much less profitable on the mobile platform than traditional desktop.  If mobile searches cannibalize desktop searches, then the projection is that Google's business will be permanently less profitable.

We know that there are more mobile ad clicks as a percentage in Q4 than there were in Q3.

We know that CPC rose from Q3 to Q4.

Therefore, we can fairly safely guess that CPC is now rising in mobile.  Plus we saw other data that indicates this.  Plus it just makes sense.  Mobile has a lot of useful characteristics that desktop advertising doesn't have, specifically highly granular location data.  As advertisers figure it out, they will begin to take advantage of the cheap advertising on mobile.  As more advertisers pile on, the cheap advertising sets itself at the proper market price.  The "mature" markets are those that have stable CPC.

Those factors you mention do have an impact, but by far the greatest impact on CPC is supply vs. demand.  Supply is measured by search activity (generally stable growth year over year).  Demand is measured by aggregate advertising spend.  CPC drops when there is huge growth in new markets (e.g. mobile, or Asia, or both), because the supply increases more quickly than the demand can react.

2- Fundamentally, it would be bad for Google's advertising business if advertisers lost enthusiasm for advertising on it.

My thesis is that most advertisers on Google measure their ROI.  You can verify this by searching on Google and seeing how many people implement technology to track how well their ads are doing (e.g. affiliate links are a dead giveaway).  All these guys care about is ROI and optimizing it- as long as they are making money they will keep advertising.  Things that would cause this to go down would be: economic recession, their product is banned and can't be sold online anymore.  Other than that, I  don't see fundamental drivers that would cause Google's advertising customers to spend less.

If anything, Google has huge tailwinds behind it as you can buy more and more products online.  Online retailing is still in its infancy.  I would love to buy my tax software online (and if Ufile advertised on Google, I would click an ad).  It is (or was) cheaper in physical stores... I don't expect this to last. 

I think you're generally right about advertisers and ROI, but it varies by industry.  Nobody buys big four consulting services over the internet, but they still buy AdWord placement - ROI for this type of spend is really difficult to measure/guess.  Conversely e-tailers can measure ROI at a very granular level by linking clicks to conversions.  Because of this, they are much more price sensitive and keyword savvy.

Not sure what version of Google you're using but when I search for Canada Tax File, uFile is the second sponsored link.

3- The other tailwind is that Google and its advertisers are getting better at advertising.  Google is constantly trying to figure out how to better deliver relevant ads (e.g. retargeting), making life easier for advertisers (Google Analytics, its automated ad bidding tools, etc.), etc. etc.
Agreed, they are getting better.  I think the biggest gains in terms per-unit improvements are being made in new markets - YouTube, mobile, maps, but as you point out above the small changes to the biggest chunk of the business, North American AdWords, can have a much more significant impact to the bottom line.


Title: Re: GOOGL - Google
Post by: Palantir on January 23, 2013, 11:36:49 AM
Okay. Not to derail this discussion. But what are your price targets for IV for Google? I have mine at IV=900
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on January 23, 2013, 07:11:39 PM
Quote
If mobile searches cannibalize desktop searches, then the projection is that Google's business will be permanently less profitable.
I would try to see things from the point of view of the consumer.

I want to buy something... e.g. new balance shoes.
I go online to figure out where I can buy them cheap.
I will see ads for online retailers and I will click on those ads.  In my case, the ads are actually more relevant than the organic search results.
I will compile a list of retailers and figure out which has the best price, what pair of shoes I want, etc.

I don't have a smartphone, I don't intend on getting one, but even if I did... I would never do this process on a smartphone.  Trying to buy something online on a smartphone would be painfully brutal.  So... my thesis is that smartphone CPC will always be low.  People don't really buy stuff on a smartphone (*in the future, maybe people will buy things like smartphone apps or use their smartphone to find local places for entertainment or whatever).  Because they don't buy a lot of stuff, the advertisers aren't going to pay a lot for that type of advertising.

Quote
Not sure what version of Google you're using but when I search for Canada Tax File, uFile is the second sponsored link.
Some people might realize that Ufile is cheaper in B&M stores.  So they might click on an ad and buy the product in a B&M store.  This can lower Google's profits since the advertiser might bid less because they only look at online conversions, instead of trying to figure out the really complicated task of figuring out how many sales are driven from online to B&M stores.

I guess in general, I find it silly that not all software is being sold online at a lower price than B&M stores.  It's so obvious to me that software is best sold online.  The B&M store generates zero value (unlike selling shoes where you can see if they look good and fit).  Online is a cheaper delivery solution.  The customer can download the software right away instead of driving to the store or waiting for a package to arrive.  There are also cloud backups... you can download your software again.  As online retailing matures, I think that Google will generate more revenue from advertisers.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 23, 2013, 07:43:35 PM
Quote
If mobile searches cannibalize desktop searches, then the projection is that Google's business will be permanently less profitable.
I would try to see things from the point of view of the consumer.

I want to buy something... e.g. new balance shoes.
I go online to figure out where I can buy them cheap.
I will see ads for online retailers and I will click on those ads.  In my case, the ads are actually more relevant than the organic search results.
I will compile a list of retailers and figure out which has the best price, what pair of shoes I want, etc.

I don't have a smartphone, I don't intend on getting one, but even if I did... I would never do this process on a smartphone.  Trying to buy something online on a smartphone would be painfully brutal.  So... my thesis is that smartphone CPC will always be low.  People don't really buy stuff on a smartphone (*in the future, maybe people will buy things like smartphone apps or use their smartphone to find local places for entertainment or whatever).  Because they don't buy a lot of stuff, the advertisers aren't going to pay a lot for that type of advertising.

Plenty of people buy things on smartphones.  Here's some proof of that:

http://www.nasdaq.com/article/strong-holiday-sales-a-prelude-to-amazons-growth-in-2013-cm205318#.UQCrmB1WxBk

The estimate of $3-5bn sold on smartphones represents about 5-10% of Amazon's total sales.   Not bad.

That said, the CPC thing only becomes relevant if people are searching for something in the first place.  It's only that people are searching for sneakers on their smartphones that advertisers are able to bid on the ads for clicking.  As far as impacting the Google model, your example is the exact opposite of concerning behaviour.  If you refuse to search for sneakers on your phone then you are not cannibalizing high value desktop searches with low value phone searches.

Also, really, you don't have a smartphone?  How can you project what's hard or easy on a smartphone if you don't have one?
Title: Re: GOOGL - Google
Post by: Palantir on January 23, 2013, 08:31:46 PM
It is not a rule that G's revenue will be permanently impaired by the switch to mobile. It's a challenge that the business needs to figure out in order to sustain profitability.


Sometimes you need to let the company do the work.
Title: Re: GOOGL - Google
Post by: valueInv on January 23, 2013, 11:15:24 PM
It is not a rule that G's revenue will be permanently impaired by the switch to mobile. It's a challenge that the business needs to figure out in order to sustain profitability.


Sometimes you need to let the company do the work.

They pay a cut of their mobile search revenue to operators and hardware partners. They don't do that on desktop for the most part.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on January 23, 2013, 11:20:58 PM
Quote
If you refuse to search for sneakers on your phone then you are not cannibalizing high value desktop searches with low value phone searches.
Yeah... I don't think that Google shareholders should worry too much about smartphones.  It's mostly irrelevant.

People use smartphones for different reasons than a desktop/laptop.  That is going to mean very fundamental differences between mobile and non-mobile advertising.

Quote
Also, really, you don't have a smartphone?  How can you project what's hard or easy on a smartphone if you don't have one?
The screen is small and typing is slower on a smartphone.  I don't think I really need to own one to know that.

On the other hand... I guess there *are* some people who shop on a smartphone.  If you see something in a store, you can hop on a smartphone to check if it's cheaper elsewhere.  Then you can try to pricematch or simply buy the item elsewhere after the B&M retailer has so kindly showcased the product for you.

Quote
The estimate of $3-5bn sold on smartphones represents about 5-10% of Amazon's total sales.   Not bad.
The article simply says mobile, which would presumably include Kindle purchases for eBooks and such.

---
All in all, I really don't think that Google shareholders need to worry too much about smartphones.  It's not going to fundamentally change Google's business.  And all Google has to do to adapt is to figure out the user interface issues.

I'm a lot more worried about Google losing its search dominance.  Its second biggest business is its ad display network (Adsense).  It has many competitors on that front and Google doesn't have a commanding lead in display advertising.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on January 23, 2013, 11:40:47 PM
What do you guys think about ad retargeting?  I think that it is a huge, huge change for the display advertising business.  Forget about smartphones, ad retargeting is an important innovation that is going to make display advertising a lot more profitable.

This is really important for businesses that depend on display advertising... Adsense, Youtube, Facebook, many of the Web/Dot-Bomb 2.0 companies, etc.

Of course, this practice is going to open up a lot of privacy issues.  If somebody else hops onto your computer, they may see ads related to embarrassing hobbies or activities or products to deal with insecurities (e.g. weight loss, hair loss, etc.).
Title: Re: GOOGL - Google
Post by: VAL9000 on January 24, 2013, 09:13:12 AM
Yeah... I don't think that Google shareholders should worry too much about smartphones.  It's mostly irrelevant.

People use smartphones for different reasons than a desktop/laptop.  That is going to mean very fundamental differences between mobile and non-mobile advertising.
How can you say that it's irrelevant in one sentence, and then say that there are fundamental differences between mobile and desktop advertising in the next?  Mobile represents the single greatest threat to Google's business model today.  Here are some examples:
 - Siri bypasses Google's search capabilities - that's potentially 10-20% of the US smartphone base potentially bypassing mobile advertising
 - Apple Maps displaces Google Maps for local search - again, 10-20% bypassing Google ads
 - People choose Apps over search for content initiation on mobile - about 100% of smartphone users use apps
 - Classic AdWords and AdSense model doesn't transfer well to mobile devices

These shifts in consumer behaviour are all opportunities for competitors to displace Google's internet advertising hegemony.

Quote
Also, really, you don't have a smartphone?  How can you project what's hard or easy on a smartphone if you don't have one?
The screen is small and typing is slower on a smartphone.  I don't think I really need to own one to know that.

But you can't use your laptop to buy Christmas gifts on the bus.  Convenience is marked by many attributes.

On the other hand... I guess there *are* some people who shop on a smartphone.  If you see something in a store, you can hop on a smartphone to check if it's cheaper elsewhere.  Then you can try to pricematch or simply buy the item elsewhere after the B&M retailer has so kindly showcased the product for you.
This is a good use case.


Quote
The estimate of $3-5bn sold on smartphones represents about 5-10% of Amazon's total sales.   Not bad.
The article simply says mobile, which would presumably include Kindle purchases for eBooks and such.

Ok, here's another example.  IBM says that 16% of sales over Thanksgiving were made on mobile devices:
http://www.prnewswire.com/news-releases/early-promotions-drive-record-online-sales-for-thanksgiving-fuels-black-friday-retail-surge-reports-ibm-180691231.html


All in all, I really don't think that Google shareholders need to worry too much about smartphones.  It's not going to fundamentally change Google's business.  And all Google has to do to adapt is to figure out the user interface issues.
It's much more significant than user interface issues, but we can leave it at that.  I think smartphones are extremely important to Google and if they do not execute well then they will be severely punished.  However, I also believe that they are executing extremely well (for a large company) and that they will maintain their dominance via the dozen or so mobile strategies they have going on today.  So, I think we'll both be right, but we're coming to the conclusion in different ways ;)
Title: Re: GOOGL - Google
Post by: Palantir on January 24, 2013, 09:16:22 AM
I find it funny that when you read the Google, Apple, and Microsoft threads, all of them essentially predict that each of these companies, who are all competing against each other, is going to go into decline. (Google - "mobile ads less profitable" , MSFT - "no traction in phone", AAPL - "not cool anymore"). Truly fascinating.
Title: Re: GOOGL - Google
Post by: LC on January 24, 2013, 09:30:01 AM
I find it funny that when you read the Google, Apple, and Microsoft threads, all of them essentially predict that each of these companies, who are all competing against each other, is going to go into decline. (Google - "mobile ads less profitable" , MSFT - "no traction in phone", AAPL - "not cool anymore"). Truly fascinating.
Very good observation! It's also interesting that, when predicting the "decline" of each of these companies, no new competitors names are given. MSFT is going to decline but Win8 is going to successfully compete with Apple's ecosystem. Apple is going to decline but SIRI and iphone apps are going to cut into Google's share of the pie. GOOG is going to decline but replace MSFT as in the future as we all move to the cloud.

It's like rock-paper-scissors, but everyone loses in the end!
Title: Re: GOOGL - Google
Post by: VAL9000 on January 24, 2013, 09:43:43 AM
What do you guys think about ad retargeting?  I think that it is a huge, huge change for the display advertising business.  Forget about smartphones, ad retargeting is an important innovation that is going to make display advertising a lot more profitable.

What's hilarious about this is now I have a uFile display banner showing up when I visit this forum.  Thanks for that!

And yes, it's a great innovation and will help AdSense become more profitable and competitive.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 24, 2013, 09:55:31 AM
I find it funny that when you read the Google, Apple, and Microsoft threads, all of them essentially predict that each of these companies, who are all competing against each other, is going to go into decline. (Google - "mobile ads less profitable" , MSFT - "no traction in phone", AAPL - "not cool anymore"). Truly fascinating.
Very good observation! It's also interesting that, when predicting the "decline" of each of these companies, no new competitors names are given. MSFT is going to decline but Win8 is going to successfully compete with Apple's ecosystem. Apple is going to decline but SIRI and iphone apps are going to cut into Google's share of the pie. GOOG is going to decline but replace MSFT as in the future as we all move to the cloud.

It's like rock-paper-scissors, but everyone loses in the end!

If there are three competitors and one winner, then on average everyone loses.  :)
Title: Re: GOOGL - Google
Post by: constructive on January 24, 2013, 10:49:54 AM
In my opinion, the market consensus is that Samsung will beat Apple and Intel, with Microsoft and Google's  competitive positions basically continuing as is.
Title: Re: GOOGL - Google
Post by: txlaw on January 24, 2013, 11:44:07 AM
http://www.theverge.com/2013/1/24/3904134/google-redesign-how-larry-page-engineered-beautiful-revolution
Title: Re: GOOGL - Google
Post by: bargainman on January 24, 2013, 08:30:59 PM
I find it funny that when you read the Google, Apple, and Microsoft threads, all of them essentially predict that each of these companies, who are all competing against each other, is going to go into decline. (Google - "mobile ads less profitable" , MSFT - "no traction in phone", AAPL - "not cool anymore"). Truly fascinating.
Very good observation! It's also interesting that, when predicting the "decline" of each of these companies, no new competitors names are given. MSFT is going to decline but Win8 is going to successfully compete with Apple's ecosystem. Apple is going to decline but SIRI and iphone apps are going to cut into Google's share of the pie. GOOG is going to decline but replace MSFT as in the future as we all move to the cloud.

It's like rock-paper-scissors, but everyone loses in the end!

nope, you're leaving out Amazon, and maybe samsung.  Amazon is gunning for everyone, and their margins are zero...  Basically they are a non-profit going up against 3 companies with some of the highest margins in history.
Title: Re: GOOGL - Google
Post by: Palantir on January 24, 2013, 08:40:21 PM
Amazon has neither a desktop, nor a laptop, nor search, nor a TV or anything except Kindle.....I'd say it has a long way to go.
Title: Re: GOOGL - Google
Post by: Palantir on January 24, 2013, 08:48:11 PM

Very good observation! It's also interesting that, when predicting the "decline" of each of these companies, no new competitors names are given. MSFT is going to decline but Win8 is going to successfully compete with Apple's ecosystem. Apple is going to decline but SIRI and iphone apps are going to cut into Google's share of the pie. GOOG is going to decline but replace MSFT as in the future as we all move to the cloud.

It's like rock-paper-scissors, but everyone loses in the end!

Indeed. Google is going to eat Apple, it is the world's largest mobile OS. Google is going to rule the world! Except that mobile ads mean it will permanently impair its profits, and Siri could cut into Google's market share. Apple is the winner! But wait....it can't innovate anymore, it's going to be under threat by emerging rivals. Like Microsoft. That Windows 8 thing....mmmmmMetro. Microsoft has nothing in phone and tablet and search, but enterprise is very strong. Wait, Google is launching Google Apps, and enterprises are buying Apple. Sell Microsoft!

All of these stocks have some kind of "overhang" about them.
Title: Re: GOOGL - Google
Post by: bargainman on January 25, 2013, 08:16:38 PM
Amazon has neither a desktop, nor a laptop, nor search, nor a TV or anything except Kindle.....I'd say it has a long way to go.

That they don't produce hardware doesn't really matter.  Amazon has kindle which they sell for nothing or even a loss.  That means they can produce hardware that competes with Apple's high margin products.  Their products are available on any hardware product.  I have kindle books and the entire video library on any computer I want, plus on my Roku box.  Bezos recently says he likes this model because it aligns with customers better. He's not trying to sell them on a device, he wants them to use any device, and then keep buying content.  He's happy that people have first version Kindles out there since they keep using it to buy content.

Amazon does have search for buying products! that's probably the most valuable search around.  Any store can list their products on Amazon's site, and even get fulfillment by Amazon.  Often it's better to search amazon for products than Google that's why Google recently started putting search results that are sponsored in their main page for deals iirc.

They have a growing content library of video, they have the massive fulfillment infrastructure.  Have you researched AWS and all the other services they offer?  They are charging into the server in the cloud market and getting a massive scale advantage as companies all over realize they can't compete.  That only increases their scale advantage.

They are basically applying the scale and low margin they learned in the retail space to the tech space, and it makes them a very dangerous company.
Title: Re: GOOGL - Google
Post by: valueInv on January 26, 2013, 07:41:40 AM
Amazon has neither a desktop, nor a laptop, nor search, nor a TV or anything except Kindle.....I'd say it has a long way to go.

That they don't produce hardware doesn't really matter.  Amazon has kindle which they sell for nothing or even a loss.  That means they can produce hardware that competes with Apple's high margin products.  Their products are available on any hardware product.  I have kindle books and the entire video library on any computer I want, plus on my Roku box.  Bezos recently says he likes this model because it aligns with customers better. He's not trying to sell them on a device, he wants them to use any device, and then keep buying content.  He's happy that people have first version Kindles out there since they keep using it to buy content.

Amazon does have search for buying products! that's probably the most valuable search around.  Any store can list their products on Amazon's site, and even get fulfillment by Amazon.  Often it's better to search amazon for products than Google that's why Google recently started putting search results that are sponsored in their main page for deals iirc.

They have a growing content library of video, they have the massive fulfillment infrastructure.  Have you researched AWS and all the other services they offer?  They are charging into the server in the cloud market and getting a massive scale advantage as companies all over realize they can't compete.  That only increases their scale advantage.

They are basically applying the scale and low margin they learned in the retail space to the tech space, and it makes them a very dangerous company.
Amazon and FB are Google's biggest threats. Google has made a strategic blunder by focusing its efforts on fight Apple instead of its actual threats.
Title: Re: GOOGL - Google
Post by: valueInv on January 26, 2013, 07:42:24 AM
Some analysis on Nexus 7 numbers:

http://iterativepath.wordpress.com/2013/01/26/nexus-7-sales-almost-doubled-but-from-what-levels/
Title: Re: GOOGL - Google
Post by: bargainman on January 26, 2013, 03:19:18 PM
Amazon and FB are Google's biggest threats. Google has made a strategic blunder by focusing its efforts on fight Apple instead of its actual threats.

Well that I'm not sure of..  I don't know that Google was fighting Apple with Android per se.  they were, but taht's cause Apple was there first.  I think they were probably fighting the inevitable rise of the post Pc world and mobile etc, and it was in their best interest to control or go after that market.  They were fighting to be there in scale before MSFT, RIMM, NOK and Samsung got their act together.  Now they basically own a large part of mobile search just by being there second and being the most ubiquitous OS.  i would say that was a very important strategic move.  Chrome browser too.  They are extending their moat by being the default search in all these devices and browsers.  Kind of how MSFT was trying to fortify their moat by shipping IE by default with Windows.  They are definitely still fighting FB with google+ (which is more than just the social network), and Amazon on the web services and search front.  It's definitely a multi front war..  But Amazon has the advantage that they like small margins, huge scale and no profits for years to come...
Title: Re: GOOGL - Google
Post by: no_free_lunch on January 26, 2013, 06:33:18 PM
Bargainman,

Well said, I was going to post but you covered everything I had to say but more elegantly. I would just add that while google has failed with google+ they absolutely gave it their all.  I disagree with valueinv in that regard.  I recall reading announcements from sergey/brin (can never keep track of which one is which) that google+ and related more social google was the future of the company.  Employees were to fall in line in that regard or get out.  The problem is they are engineers and don't really have an advantage in attracting people to a social site.  They can build a great social site no doubt but it seems it is all about attracting and building that critical mass, I don't know if they will succeed in this.  The fact of the matter is though that there is just not much you can do to crack facebook.
Title: Re: GOOGL - Google
Post by: valueInv on January 26, 2013, 08:40:00 PM
Amazon and FB are Google's biggest threats. Google has made a strategic blunder by focusing its efforts on fight Apple instead of its actual threats.

Well that I'm not sure of..  I don't know that Google was fighting Apple with Android per se.  they were, but taht's cause Apple was there first.  I think they were probably fighting the inevitable rise of the post Pc world and mobile etc, and it was in their best interest to control or go after that market.  They were fighting to be there in scale before MSFT, RIMM, NOK and Samsung got their act together.  Now they basically own a large part of mobile search just by being there second and being the most ubiquitous OS.  i would say that was a very important strategic move.  Chrome browser too.  They are extending their moat by being the default search in all these devices and browsers.  Kind of how MSFT was trying to fortify their moat by shipping IE by default with Windows.  They are definitely still fighting FB with google+ (which is more than just the social network), and Amazon on the web services and search front.  It's definitely a multi front war..  But Amazon has the advantage that they like small margins, huge scale and no profits for years to come...

FBs core business is advertising. Apple's isn't. FB has announced a search engine. Apple hasn't. Nuf said.
Title: Re: GOOGL - Google
Post by: bargainman on January 26, 2013, 09:47:55 PM
FBs core business is advertising. Apple's isn't. FB has announced a search engine. Apple hasn't. Nuf said.

I hope you spend more time on your analysis of the companies you invest in than you do posting retorts like 'Nuf said'. 

You can't just look at two companies and say 'they're both in the same core business' therefore they should or should not be worried about one another, or have each other as highest priority competitors.  By extension, MSFT shouldn't have been worried about Apple since MSFT's core is software and Apple's is hardware.  it shouldn't have been worried about Google since Google's core business is Advertising and MSFT's is software.  IBM shouldn't have worried about MSFT since they were into desktop computers and IBM was into mainframes.  The entire point of disruption is that it usually hits incumbent companies from a completely unexpected angle.  Google's great strength is that they are a software and cloud based company but they don't have to charge for the software since they make money on advertising, hence they can beat MSFT in that sense, since MSFT needs to sell its software directly.  Amazon's great strength is that they are immensely happy with huge scale and tight margins and are happy entering into the software space where incumbents want to have really high margins.  There were several reasons Google was interested in competing with Apple.  First they didn't want Apple, or someone else, controlling the distribution network.  They already knew Apple would control the high end, but they wanted to be the MSFT to Apple's Mac in the 90s. They wanted to control the conduit to possible customers.  Android is arguably one of the most successful platforms in history when you consider the uptake and penetration of sheer numbers.  That will pay off immensely in the future.

I highly recommend that everyone read Joel Spolsky's piece on strategy and the way that "Smart companies try to commoditize their products' complements."

http://www.joelonsoftware.com/articles/StrategyLetterV.html

FB's core business may be advertising, but 2 things.  First, their revenue was last 5 billion vs google's 50 income 0.5billion vs 11B.  Second, FB is already a massive incumbent.  Apple was not, in a sense that they were focused on the high end.  One of the most important lessons is innovative disruptive businesses, especially tech, is 'market gap analysis'.  Go to where there is a hole in the market, don't try to compete head on.  Going head on with the gorilla is a sure way to lose.  Google knows this, which is why they keep saying that Google plus is not about the social network!
 
http://mashable.com/2012/06/29/google-plus-problem/

As such, strategically it made more sense to go after the massive market that was developing under Apple's high end iOS than to go after the low end market that FB still hasn't figured out how to really monetize!

That said in the world of tech there is not one threat!  All companies these days are basically frenemies all fighting battles on multiple fronts, trying to use different business models to take each other on.  There is an intense and highly complex interplay at work.  No company can focus all its energies fighting only one competitor.  There is plenty more to be said!

Title: Re: GOOGL - Google
Post by: no_free_lunch on January 27, 2013, 06:50:48 AM
Quote
FBs core business is advertising. Apple's isn't. FB has announced a search engine. Apple hasn't. Nuf said.

Just another example of stories investors like to tell.   :P
Title: Re: GOOGL - Google
Post by: Palantir on January 27, 2013, 08:30:10 AM

I highly recommend that everyone read Joel Spolsky's piece on strategy and the way that "Smart companies try to commoditize their products' complements."

http://www.joelonsoftware.com/articles/StrategyLetterV.html

This is a good article. So what is next, Facebook, Bing, and Amazon join together to make search a commodity?

On the other hand it seems Apple is doing the exact opposite of what he says. They're commoditizing nothing, and trying to make everything proprietary.
Title: Re: GOOGL - Google
Post by: valueInv on January 27, 2013, 09:01:37 AM
Quote
FBs core business is advertising. Apple's isn't. FB has announced a search engine. Apple hasn't. Nuf said.

Just another example of stories investors like to tell.   :P

1,What % of FB's revenues are from advertising?
2, Have you been following the news?
Title: Re: GOOGL - Google
Post by: valueInv on January 27, 2013, 09:13:41 AM
FBs core business is advertising. Apple's isn't. FB has announced a search engine. Apple hasn't. Nuf said.

I hope you spend more time on your analysis of the companies you invest in than you do posting retorts like 'Nuf said'. 

You can't just look at two companies and say 'they're both in the same core business' therefore they should or should not be worried about one another, or have each other as highest priority competitors.  By extension, MSFT shouldn't have been worried about Apple since MSFT's core is software and Apple's is hardware.  it shouldn't have been worried about Google since Google's core business is Advertising and MSFT's is software.  IBM shouldn't have worried about MSFT since they were into desktop computers and IBM was into mainframes.  The entire point of disruption is that it usually hits incumbent companies from a completely unexpected angle.  Google's great strength is that they are a software and cloud based company but they don't have to charge for the software since they make money on advertising, hence they can beat MSFT in that sense, since MSFT needs to sell its software directly.  Amazon's great strength is that they are immensely happy with huge scale and tight margins and are happy entering into the software space where incumbents want to have really high margins.  There were several reasons Google was interested in competing with Apple.  First they didn't want Apple, or someone else, controlling the distribution network.  They already knew Apple would control the high end, but they wanted to be the MSFT to Apple's Mac in the 90s. They wanted to control the conduit to possible customers.  Android is arguably one of the most successful platforms in history when you consider the uptake and penetration of sheer numbers.  That will pay off immensely in the future.

I highly recommend that everyone read Joel Spolsky's piece on strategy and the way that "Smart companies try to commoditize their products' complements."

http://www.joelonsoftware.com/articles/StrategyLetterV.html

FB's core business may be advertising, but 2 things.  First, their revenue was last 5 billion vs google's 50 income 0.5billion vs 11B.  Second, FB is already a massive incumbent.  Apple was not, in a sense that they were focused on the high end.  One of the most important lessons is innovative disruptive businesses, especially tech, is 'market gap analysis'.  Go to where there is a hole in the market, don't try to compete head on.  Going head on with the gorilla is a sure way to lose.  Google knows this, which is why they keep saying that Google plus is not about the social network!
 
http://mashable.com/2012/06/29/google-plus-problem/

As such, strategically it made more sense to go after the massive market that was developing under Apple's high end iOS than to go after the low end market that FB still hasn't figured out how to really monetize!

That said in the world of tech there is not one threat!  All companies these days are basically frenemies all fighting battles on multiple fronts, trying to use different business models to take each other on.  There is an intense and highly complex interplay at work.  No company can focus all its energies fighting only one competitor.  There is plenty more to be said!

1, That is really bad logic. First, the point is no that a company shouldn't worry about other companies who are is adjacent businesses, its that they should worry more about companies in their own business. Do you see the difference?
2, So you're saying that since FB is already an incumbent, Google should give up the add business and build things like driverless cars?
3, FB is small because most of their ad products are still in beta or havne't been released yet or have been released for just a quarter or two.
4, Commoditizing a complement is a great idea until you become a complement yourself. Take a look at Motorola losses. An how about subsidizing the Nexus 7 and the Chromebooks? Who is bearing the costs of commoditization? And how about Nexus Q and Google Glasses? Doesn't sound like they are interested in commoditization.
5, Google does not control Android in the real world. The apps are controlled by the operators, the UI by the device vendors, the marketshare by Samsung.
6, G+ is not a social network? It looks a lot like FB - features,etc. Coincidence? If it quacks like a duck.....
7, If you commoditize a massive market, there is no money to be made by everyone - including you. So what are they doing? Going after a massive market or commoditizing one? You can't have your cake....
Title: Re: GOOGL - Google
Post by: no_free_lunch on January 27, 2013, 09:34:21 AM
Quote
1,What % of FB's revenues are from advertising?
2, Have you been following the news?

Yep, yep I do follow the news and yes Facebook makes their money from advertising.  Never disagreed with that point, not even sure why you'd bring it up as it's common sense.

Explain to me how google has been ignoring/not focusing on facebook?  What is google+?

Quote
Google (GOOG, Fortune 500) once gave its engineers the time and resources to be creative. That experimental approach yielded several home-run hits like Chrome and Gmail. But Google fell behind in one key area: competing with Facebook.

That turned into corporate priority No. 1 when Larry Page took over as the company's CEO. "Social" became Google's battle cry, and anything that didn't support Google+ was viewed as a distraction.

Google has been focusing on facebook, they were late but it has been a priority.  They are failing, but it has been a priority.  What would you have done differently?  Right now, the next threat is out there and it's not facebook, who knows what it is, do they chase that down too?  Why don't you make a prediction on what all the competitors are over the next 5 years so in retrospect we will know how brilliant you are.  The fact is you just can't know these things, you do have to respond somewhat as these threats emerge.
Title: Re: GOOGL - Google
Post by: valueInv on January 27, 2013, 09:46:21 AM
Quote
1,What % of FB's revenues are from advertising?
2, Have you been following the news?

Yep, yep I do follow the news and yes Facebook makes their money from advertising.  Never disagreed with that point, not even sure why you'd bring it up as it's common sense.

Explain to me how google has been ignoring/not focusing on facebook?  What is google+?

Quote
Google (GOOG, Fortune 500) once gave its engineers the time and resources to be creative. That experimental approach yielded several home-run hits like Chrome and Gmail. But Google fell behind in one key area: competing with Facebook.

That turned into corporate priority No. 1 when Larry Page took over as the company's CEO. "Social" became Google's battle cry, and anything that didn't support Google+ was viewed as a distraction.

Google has been focusing on facebook, they were late but it has been a priority.  They are failing, but it has been a priority.  What would you have done differently?  Right now, the next threat is out there and it's not facebook, who knows what it is, do they chase that down too?  Why don't you make a prediction on what all the competitors are over the next 5 years so in retrospect we will know how brilliant you are.  The fact is you just can't know these things, you do have to respond somewhat as these threats emerge.
Pinterest - they are the only other company able to capture intent.

Google does try to respond to every little threat out there - Propeller, Currents, Offers. Any new startup gains traction, google has a copycat product out there in a year.
Title: Re: GOOGL - Google
Post by: no_free_lunch on January 27, 2013, 11:46:03 AM
Pinterest is not what is going to be big in 5 years, it's big now.  It is already valued at well over $1B. 

As far as capturing intent, how does facebook do that?  I don't see it.   They have location info and personal details but really not intent.  Obviously the competitive space is broader than websites with intent.  Really any website once it gets to a massive scale is a potential competitor.  That is why google bought youtube for instance.  They simply can't buy them all.

One technology which does capture intent are services like Apple's Siri.  In fact you couldn't have clearer intent or a more comparable technology to search.  It is search.  It is this type of technology that google is guarding against.  If they had just let Apple own the market then they could potentially lose control of the future of search.  You have just too narrow a definition of search, you are thinking exclusively of the way it is implemented now with a website/browser widget.

You still haven't responded to how google is ignoring facebook.
Title: Re: GOOGL - Google
Post by: Palantir on January 27, 2013, 02:08:38 PM
I agree with ValueInv. Apple has Siri, but it is not a "core" technology to Apple's business model. Apple is essentially a hardware company that treats software as a freebie that works with its hardware. I mean sure, people like to fantasize about how Siri could become the trump card against Google's search, but it doesn't align with Apple's business model of integrating hardware and software.

How is Google + not a social network? FB seems to be THE threat to Google. It is the main portal through which people interact with others, it has huge user data, and can help you find things. Google would love nothing more than that.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 27, 2013, 07:13:18 PM
4, Commoditizing a complement is a great idea until you become a complement yourself. Take a look at Motorola losses. An how about subsidizing the Nexus 7 and the Chromebooks? Who is bearing the costs of commoditization? And how about Nexus Q and Google Glasses? Doesn't sound like they are interested in commoditization.
Using the Spolsky framework, they are commoditizing the device.  A device has two components: hardware and software.  They already drove the cost of the software down, but two new issues arose from this approach which were not anticipated when Android was conceived.  The first was patent litigation.  The second was the cost of hardware.

Motorola's purchase is an attempt at solving both of these issues.  Android is now backed by a significant chunk of valuable patents.  I have noticed that over the past few months the board posted "stories" around patent litigation have steadily declined to a trickle.  I can't say why this is, but it certainly doesn't make news the way it did a few months ago.

The other benefit that buying Motorola provides is that Google can further drive down the cost of hardware.  This is done in two ways:  First, Motorola can provide handset cost leadership to the market by building lower-cost hardware than other handset makers.  The theory here is that if Motorola and Samsung release the exact same device, but Motorola can do it $20 cheaper, then Samsung will have to also sell their device for $20 cheaper.  GOOG will keep its Android partners honest with pricing.  Second, Motorola can innovate on hardware and grant a free license to its Android partners.  Both of these strategies will further push down the cost of the overall device.  You could also say that Motorola is a preventative measure from keeping Samsung from becoming the only remaining Android handset manufacturer, which would give Samsung considerable negotiation leverage with Google.

Google's core businesses are complemented by these devices.  Lower device cost means more devices.  More devices means more search/AdWords, more AdSense, more YouTube (more FB and more Amazon, too).  It also happens to mean less AAPL.

How far does it go?

Well only about 2.5 billion people on Earth have internet access today.  I'm assuming that Google wants that number to be closer to 7 billion.  Get the device down to $40-50 with LTE and a 5-inch screen, and you'll get to 95% penetration relatively quickly.

7, If you commoditize a massive market, there is no money to be made by everyone - including you. So what are they doing? Going after a massive market or commoditizing one? You can't have your cake....

See above and tell me if this strategy seems long-term beneficial or detrimental to GOOG.  Also feel free to comment on AAPL/AMZN/MSFT as well.
Title: Re: GOOGL - Google
Post by: valueInv on January 27, 2013, 07:55:25 PM
4, Commoditizing a complement is a great idea until you become a complement yourself. Take a look at Motorola losses. An how about subsidizing the Nexus 7 and the Chromebooks? Who is bearing the costs of commoditization? And how about Nexus Q and Google Glasses? Doesn't sound like they are interested in commoditization.
Using the Spolsky framework, they are commoditizing the device.  A device has two components: hardware and software.  They already drove the cost of the software down, but two new issues arose from this approach which were not anticipated when Android was conceived.  The first was patent litigation.  The second was the cost of hardware.

Motorola's purchase is an attempt at solving both of these issues.  Android is now backed by a significant chunk of valuable patents.  I have noticed that over the past few months the board posted "stories" around patent litigation have steadily declined to a trickle.  I can't say why this is, but it certainly doesn't make news the way it did a few months ago.

The other benefit that buying Motorola provides is that Google can further drive down the cost of hardware.  This is done in two ways:  First, Motorola can provide handset cost leadership to the market by building lower-cost hardware than other handset makers.  The theory here is that if Motorola and Samsung release the exact same device, but Motorola can do it $20 cheaper, then Samsung will have to also sell their device for $20 cheaper.  GOOG will keep its Android partners honest with pricing.  Second, Motorola can innovate on hardware and grant a free license to its Android partners.  Both of these strategies will further push down the cost of the overall device.  You could also say that Motorola is a preventative measure from keeping Samsung from becoming the only remaining Android handset manufacturer, which would give Samsung considerable negotiation leverage with Google.

Google's core businesses are complemented by these devices.  Lower device cost means more devices.  More devices means more search/AdWords, more AdSense, more YouTube (more FB and more Amazon, too).  It also happens to mean less AAPL.

How far does it go?

Well only about 2.5 billion people on Earth have internet access today.  I'm assuming that Google wants that number to be closer to 7 billion.  Get the device down to $40-50 with LTE and a 5-inch screen, and you'll get to 95% penetration relatively quickly.

7, If you commoditize a massive market, there is no money to be made by everyone - including you. So what are they doing? Going after a massive market or commoditizing one? You can't have your cake....

See above and tell me if this strategy seems long-term beneficial or detrimental to GOOG.  Also feel free to comment on AAPL/AMZN/MSFT as well.
1, The patent "story" has come to an end. First, Google settled their antitrust suit and agreed not to sue anyone using their FRAND patents. Second, Google has withdrawn most of its lawsuits against Apple and other as part of this agreement. Check the news. Further, many of Motorola's handsets remain banned both in the US and in Germany because of patent lawsuits it lost.
2, Motorla continues to lose money. Take a look at Google's quarterly numbers. They could reduce prices but that will only increase Google's own losses. Smasung has massive economies of scale (it is the worlds top chip buyer) and manufactures its own chips. Further, Samsung continues to make massive strides against other Android vendors and sends an order of magnitude more on marketing. In other words, they have far more pricing power than Motorola.

Finally, Androids problem is not high prices. There are many Chinese vendors pushing prices down very quickly. Take a look at Huawei, Lenovo and Xaomi. These guys are driving Motorola out of the market.
Title: Re: GOOGL - Google
Post by: valueInv on January 27, 2013, 08:06:54 PM
Pinterest is not what is going to be big in 5 years, it's big now.  It is already valued at well over $1B. 

As far as capturing intent, how does facebook do that?  I don't see it.   They have location info and personal details but really not intent.  Obviously the competitive space is broader than websites with intent.  Really any website once it gets to a massive scale is a potential competitor.  That is why google bought youtube for instance.  They simply can't buy them all.

One technology which does capture intent are services like Apple's Siri.  In fact you couldn't have clearer intent or a more comparable technology to search.  It is search.  It is this type of technology that google is guarding against.  If they had just let Apple own the market then they could potentially lose control of the future of search.  You have just too narrow a definition of search, you are thinking exclusively of the way it is implemented now with a website/browser widget.

You still haven't responded to how google is ignoring facebook.

Pintrest is not big now, they're just hyped. They haven't even started monetization. FB can capture implicit intent using their current product. For example, FB knows I like Pink Floyd. They showed me an ad when the Roger Waters tour came to town. I clicked, FB got paid.
I never search for Pink Floyd on Google. I have no reason to.

Also, FB will start capturing explicit intent when their search engine starts monetizing.

BTW, Google has made offers to pretty much every social startup that gains traction including Pintrest. Most are not willing to sell to Google.

Google is not ignoring FB. Instead of focusing on their biggest, direct threats, they spend their money and best talent on science projects like driverless cars and mapping coral reefs. They lack a coherent strategy. They're trying to be all things to all people and enter every market they can. And people on investor boards bend over backwards into trying to rationalize their various efforts into something coherent.

As you pointed, G+ is a failure. But guess which is their biggest acquisition? A social company?  It is obvious that the "build it and they will come" strategy is not working for social. But all you see is more features being announced and redesigned UIs. Where do you see most of the new product announcements from Google coming? Social? 
Title: Re: GOOGL - Google
Post by: rmitz on January 28, 2013, 05:56:53 AM
As you pointed, G+ is a failure. But guess which is their biggest acquisition? A social company?  It is obvious that the "build it and they will come" strategy is not working for social. But all you see is more features being announced and redesigned UIs. Where do you see most of the new product announcements from Google coming? Social?

http://www.zdnet.com/google-moves-up-to-second-place-in-social-networks-7000010372/

Obviously not all of these may be active users, but I think to call it a failure may be premature.  IE didn't start out with 100% marketshare.  Also, you reference the various research projects google does--basic research keeps many brilliant people engaged and happy, and not working for their competitors.  In addition to just being a very good thing for society.  I wish more companies were managed with an eye to long term sustainability and as participating members of society, not little piggy banks only for investors, where every dime must be squeezed.

I have many problems with google's size and privacy implications, but you're attacking some of their best attributes.
Title: Re: GOOGL - Google
Post by: VAL9000 on January 28, 2013, 07:24:56 AM
1, The patent "story" has come to an end. First, Google settled their antitrust suit and agreed not to sue anyone using their FRAND patents. Second, Google has withdrawn most of its lawsuits against Apple and other as part of this agreement. Check the news. Further, many of Motorola's handsets remain banned both in the US and in Germany because of patent lawsuits it lost.
2, Motorla continues to lose money. Take a look at Google's quarterly numbers. They could reduce prices but that will only increase Google's own losses. Smasung has massive economies of scale (it is the worlds top chip buyer) and manufactures its own chips. Further, Samsung continues to make massive strides against other Android vendors and sends an order of magnitude more on marketing. In other words, they have far more pricing power than Motorola.

Finally, Androids problem is not high prices. There are many Chinese vendors pushing prices down very quickly. Take a look at Huawei, Lenovo and Xaomi. These guys are driving Motorola out of the market.

I'm simply explaining, within the framework, why Google did what they did.  If you think they're not trying to drive down the cost of these devices, then please offer an alternate theory that you believe is more plausible.  I think they bought Motorola for the patent protection primarily, and I think that it is generally working.  The judge bounced Apple's lawsuit against Motorola, which Google was pleased with.  Motorola gives Google significant leverage in protecting Android from Apple, Microsoft, and others - is this something that you disagree with?

The hardware piece is going to be a turnaround project and will take time to execute.  They bought a poor business with an 18 month product pipeline and it's going to take some time to work through it.  The real test of Google as a hardware company will start at the end of '13, or early '14.  Based on the Nexus-class devices we've seen, I think that Google will produce some impressive hardware through that unit.

Of course Samsung is a better business than Motorola.  The point that I made above was that Samsung is good enough that they could conceivably become the only Android handset manufacturer, which would give them significant leverage over Google in future negotiations.  Does it not make sense that owning a hardware company would give you a better position in negotiating with a hardware company?  This is like the argument that Bing is good for Microsoft because it's bad for Google.

Android's problem is high prices if you take the view that Google wants everyone in the world using their core products.  Really poor people can't benefit from Google today, because of both the cost of the device and the cost of the service.  Google can more easily impact the cost of the device, and this is what they are doing.  Plus it puts significant competitive pressure on the likes of AAPL and MSFT, which is good.
Title: Re: GOOGL - Google
Post by: valueInv on January 28, 2013, 08:29:39 AM
1, The patent "story" has come to an end. First, Google settled their antitrust suit and agreed not to sue anyone using their FRAND patents. Second, Google has withdrawn most of its lawsuits against Apple and other as part of this agreement. Check the news. Further, many of Motorola's handsets remain banned both in the US and in Germany because of patent lawsuits it lost.
2, Motorla continues to lose money. Take a look at Google's quarterly numbers. They could reduce prices but that will only increase Google's own losses. Smasung has massive economies of scale (it is the worlds top chip buyer) and manufactures its own chips. Further, Samsung continues to make massive strides against other Android vendors and sends an order of magnitude more on marketing. In other words, they have far more pricing power than Motorola.

Finally, Androids problem is not high prices. There are many Chinese vendors pushing prices down very quickly. Take a look at Huawei, Lenovo and Xaomi. These guys are driving Motorola out of the market.

I'm simply explaining, within the framework, why Google did what they did.  If you think they're not trying to drive down the cost of these devices, then please offer an alternate theory that you believe is more plausible.  I think they bought Motorola for the patent protection primarily, and I think that it is generally working.  The judge bounced Apple's lawsuit against Motorola, which Google was pleased with.  Motorola gives Google significant leverage in protecting Android from Apple, Microsoft, and others - is this something that you disagree with?

The hardware piece is going to be a turnaround project and will take time to execute.  They bought a poor business with an 18 month product pipeline and it's going to take some time to work through it.  The real test of Google as a hardware company will start at the end of '13, or early '14.  Based on the Nexus-class devices we've seen, I think that Google will produce some impressive hardware through that unit.

Of course Samsung is a better business than Motorola.  The point that I made above was that Samsung is good enough that they could conceivably become the only Android handset manufacturer, which would give them significant leverage over Google in future negotiations.  Does it not make sense that owning a hardware company would give you a better position in negotiating with a hardware company?  This is like the argument that Bing is good for Microsoft because it's bad for Google.

Android's problem is high prices if you take the view that Google wants everyone in the world using their core products.  Really poor people can't benefit from Google today, because of both the cost of the device and the cost of the service.  Google can more easily impact the cost of the device, and this is what they are doing.  Plus it puts significant competitive pressure on the likes of AAPL and MSFT, which is good.

I have posted in detail about all the lawsuits Motorla lost, all the devices banned and the antitrust issue already. All the information you need is already there in this thread.
Title: Re: GOOGL - Google
Post by: Parsad on January 28, 2013, 12:54:57 PM
One of Google's advertising competitors, AdBrite, is going out of business February 1st.  Small fry, but still shows how difficult it is to make a dent in AdSense.  Facebook may have a shot.  Cheers!

http://allthingsd.com/20130128/sales-talks-fell-through-so-ad-exchange-adbrite-shuts-down/
Title: Re: GOOGL - Google
Post by: PlanMaestro on January 29, 2013, 10:27:31 AM
Amazon opens new advertising front.
http://www.ft.com/intl/cms/s/0/8e0b46ac-6642-11e2-919b-00144feab49a.html#axzz2J8s0hfT4

Marketers note that Amazon is now charging prices that rival its competitors and that its ad business stands out from the pack because of its massive reach, rich data-set based on actual customer data and personalisation techniques. The more that consumers and advertisers go directly to Amazon to search for products, the bigger the threat the company poses to others – especially Google – experts and analysts said.

Colin Gillis, technology analyst at BGC Partners, said: “What’s the difference between a user and a customer? The difference is a customer has given you their credit card data. Google has millions of users, but far fewer customers.”

Title: Re: GOOGL - Google
Post by: valueInv on January 29, 2013, 10:50:04 AM
Amazon opens new advertising front.
http://www.ft.com/intl/cms/s/0/8e0b46ac-6642-11e2-919b-00144feab49a.html#axzz2J8s0hfT4

Marketers note that Amazon is now charging prices that rival its competitors and that its ad business stands out from the pack because of its massive reach, rich data-set based on actual customer data and personalisation techniques. The more that consumers and advertisers go directly to Amazon to search for products, the bigger the threat the company poses to others – especially Google – experts and analysts said.

Colin Gillis, technology analyst at BGC Partners, said: “What’s the difference between a user and a customer? The difference is a customer has given you their credit card data. Google has millions of users, but far fewer customers.”


There'll be more and more in the future. If you have a better search experience for products on Amazon, you won't use Google to search for products. But you'll search for everything else on Google -news, history, Justin Beiber, etc. But when you want to buy, you'll use Amazon because they can actually fulfill the transaction. Guess what happens to Google's economics when Amazon skims the cream off the top?

So yeah, Amazon is the number 2 threat after Facebook. Apple is a distant number 3. 
Title: Re: GOOGL - Google
Post by: DCG on January 29, 2013, 12:30:32 PM
As you pointed, G+ is a failure. But guess which is their biggest acquisition? A social company?  It is obvious that the "build it and they will come" strategy is not working for social. But all you see is more features being announced and redesigned UIs. Where do you see most of the new product announcements from Google coming? Social?

http://www.zdnet.com/google-moves-up-to-second-place-in-social-networks-7000010372/

Obviously not all of these may be active users, but I think to call it a failure may be premature.  IE didn't start out with 100% marketshare.  Also, you reference the various research projects google does--basic research keeps many brilliant people engaged and happy, and not working for their competitors.  In addition to just being a very good thing for society.  I wish more companies were managed with an eye to long term sustainability and as participating members of society, not little piggy banks only for investors, where every dime must be squeezed.

I have many problems with google's size and privacy implications, but you're attacking some of their best attributes.

The amount of 'Users' of Google + means very little. Google automatically gives everyone who has any type of Google account a Google + account.

Google + is basically a social network for Google employees at this point.
Title: Re: GOOGL - Google
Post by: valueInv on February 01, 2013, 01:14:29 PM
http://www.bbc.co.uk/news/technology-21302168

I'm guessing more like this on the way.
Title: Re: GOOGL - Google
Post by: VAL9000 on February 01, 2013, 02:33:01 PM
http://www.bbc.co.uk/news/technology-21302168

I'm guessing more like this on the way.

I'm guessing more like this:
Title: Re: GOOGL - Google
Post by: valueInv on February 01, 2013, 02:42:17 PM
http://www.bbc.co.uk/news/technology-21302168

I'm guessing more like this on the way.

I'm guessing more like this:

We were having the same conversation about RIMM a few weeks ago.
Title: Re: GOOGL - Google
Post by: siddharth18 on February 01, 2013, 03:58:27 PM
One of Google's advertising competitors, AdBrite, is going out of business February 1st.  Small fry, but still shows how difficult it is to make a dent in AdSense.  Facebook may have a shot.  Cheers!

http://allthingsd.com/20130128/sales-talks-fell-through-so-ad-exchange-adbrite-shuts-down/

This comes as no surprise. I have done business with AdBrite before and I'm intimately aware of their operations and their position in the display ad business. AdBrite was and always has been the broker of crappy, 3rd tier ad display inventory (think torrent sites, warez forums and porn sites). Due to the nature of their inventory, no big box/big brand advertisers are interested in advertising with them and the best they can hope for is low paying (and sometimes shady) direct response advertising. Substandard companies like AdBrite, RightMedia, etc were allowed to exist because Google has always shunned crappy inventory.  It doens't help that AdBrite's ad platform and technology is light years behind Google's - there's just no comparison.

And yes, Google has an incredibly deep and wide moat in the display ad business. Note: I'm not talking about their search ad business. Even if no one searched on Google.com tomorrow, there will be millions of long tail (meaning niche specific) sites that will be relying on Google to monetize their inventory. Google has the largest advertiser base and can monetize its inventory at a higher rate. Due to this fact, site owners will always go to Google to get the highest monetization rates (CPM).  And advertisers have no where else to go because no other online ad network has reach of millions of sites in its network - think network effects at an astronomical scale. Anyone who has used AdWords or AdSense knows this - especially their draconian terms of service and their arrogant way of doing business. They have no tolerance for any violations of ToS and police their network very vigilantly, which should tell you that they are at the top of their game.

I would even go as far as to say that they have monopolized the online ad business due to the sheer percentage of online ad inventory they control. All e-commerce businesses know that they cannot exist without staying in the good graces of Google, Inc.
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on February 02, 2013, 03:33:29 AM
Siddharth, thanks for the comments.

The thing is... I am always a little paranoid about Google (even though I think that it has a great business and am long it).  The problem with Google is that it is prone to disruptive changes and inflection points.  If somebody else comes up with an alternative approach to advertising, it can do damage to Google's Adsense business.

If I have a website, Adsense seems to be one of the worst ways of monetizing it.  A lot of affiliate marketing blogs out there list how much they make from each source.
-Affiliate links typically make the most
-In general, I would expect that selling something or asking for donations would make a lot.
-Then comes paid links / links sold for SEO purposes
-At the bottom comes Google Adsense

One of the principles behind affiliate marketing is the power of "independent" reviews.  By giving "useful" information and vouching for an "unrelated" third party, advertising is much more effective.  Affiliate links will likely always monetize far better than Google Adsense.  On the value scale, Google Adsense is typically only good for large volumes of webpages with a low number of views (innovations like retargeting might change the landscape a little).  So I think that there is a small chance that Adsense can be replaced by something else very quickly.

I do agree with you that Adsense has a big advantage over other ad networks... being #1 is a huge 'unfair' advantage.
Title: Re: GOOGL - Google
Post by: Palantir on February 02, 2013, 10:44:52 AM
Anybody have an intrinsic value estimate for Google? I think any price below 800 will give you a 10+% return...
Title: Re: GOOGL - Google
Post by: valueInv on February 02, 2013, 04:49:33 PM
Looks like they've written the Chinese market off:

http://www.bbc.co.uk/news/technology-21307212
Title: Re: GOOGL - Google
Post by: no_free_lunch on February 02, 2013, 06:05:28 PM
I would just second the concept that AdBrite is a poor alternative to Google.  There rates are much cheaper but the quality of the traffic is very bad.  For instance, one metric I used was the frequency that the advertisers incoming traffic would click somewhere else on my site.  With google it was around 7-10%.   With ad-brite less than 1%.  Adbrite IS cheaper but not enough to justify what I was getting out of it.
Title: Re: GOOGL - Google
Post by: DCG on February 04, 2013, 08:08:15 AM
This is probably due to Android's 'open' environment being so awesome...

Android Malware Hacks Your PC and then Eavesdrops On You With Its Microphone

http://gizmodo.com/5981248/terrifying-android-malware-hacks-your-pc-and-then-eavesdrops-on-you-with-its-microphone (http://gizmodo.com/5981248/terrifying-android-malware-hacks-your-pc-and-then-eavesdrops-on-you-with-its-microphone)
Title: Re: GOOGL - Google
Post by: valueInv on February 08, 2013, 07:27:12 AM
More on that pound of flesh:

http://techcrunch.com/2013/02/08/after-googles-80m-french-publishers-fund-press-lobby-group-calls-for-search-giant-to-pay-media-in-every-european-country/
Title: Re: GOOGL - Google
Post by: wellmont on February 08, 2013, 08:03:29 AM
This is probably due to Android's 'open' environment being so awesome...

Android Malware Hacks Your PC and then Eavesdrops On You With Its Microphone

http://gizmodo.com/5981248/terrifying-android-malware-hacks-your-pc-and-then-eavesdrops-on-you-with-its-microphone (http://gizmodo.com/5981248/terrifying-android-malware-hacks-your-pc-and-then-eavesdrops-on-you-with-its-microphone)



A most relevant question:

http://dashes.com/anil/2012/09/who-benefits-from-ios6s-crappy-maps.html
Title: Re: GOOGL - Google
Post by: wellmont on February 08, 2013, 08:05:45 AM
Looks like they've written the Chinese market off:

http://www.bbc.co.uk/news/technology-21307212

at #6 and falliing Apple perhaps should think about it? :)
Title: Re: GOOGL - Google
Post by: valueInv on February 08, 2013, 09:09:51 AM
Looks like they've written the Chinese market off:

http://www.bbc.co.uk/news/technology-21307212

at #6 and falliing Apple perhaps should think about it? :)

Stay tuned.
Title: Re: GOOGL - Google
Post by: Palantir on February 08, 2013, 09:14:54 AM
I always felt Schmidt would have a future in politics. I hope he pursues that, we need more talented and successful people like him to enter the arena.
Title: Re: GOOGL - Google
Post by: valueInv on February 08, 2013, 09:28:00 AM
I always felt Schmidt would have a future in politics. I hope he pursues that, we need more talented and successful people like him to enter the arena.

He certainly fits right in:

http://www.huffingtonpost.com/2010/10/04/eric-schmidt-google-creepy_n_748915.html
Title: Re: GOOGL - Google
Post by: Palantir on February 08, 2013, 01:03:47 PM
GOOG's at an all time high.
Sadly that means Mr Market is probably going to bring this down.
O well. This thing is definitely headed to 800 and hopefully 900.
At 900, I'd like to sell.
At low 600s this becomes a buy again.


Sorry for the stream of consciousness.


Title: Re: GOOGL - Google
Post by: valueInv on February 08, 2013, 03:30:22 PM
Hmmmmm...........:

http://techcrunch.com/2013/02/08/google-chairman-eric-schmidt-plans-to-sell-3-2m-google-shares-42-of-his-stake-in-the-company/
Title: Re: GOOGL - Google
Post by: VAL9000 on February 12, 2013, 09:25:59 AM

This is fascinating:
http://techcrunch.com/2013/02/12/google-to-pay-apple-1-billion-next-year-to-be-default-search-engine-on-ios/

A few things come out of this:
 - Being the default search provider on iOS is worth $1bn per year to Google.
 - The returns on Google's investment in Android exceed $1bn per year, using this metric as a proxy.
 - $1bn per year in pure profit is all it takes to move Apple from a non-Google phone to a Google phone.  I am somewhat surprised by this.  I would expect that Apple would prefer to hurt Google's mobile business by offering the deal to Bing on substantially better terms.

As valueInv's posts have pointed out, Google is doing an awful lot of deals that amount to paying for traffic.  Is this a flaw in their business model, or are they discouraging competition by buying a moat?  Who else has billions to spend on deals like this?
Title: Re: GOOGL - Google
Post by: Liberty on February 12, 2013, 09:29:48 AM
Apple probably will be very careful in the future about changing defaults to things that its customers will find inferior (ie. Apple Maps backlash), and the same search traffic is probably worth more to Google than Bing because of their better ad inventory, economies of scale on infrastructure, etc, so Bing's probably not quite as ready to spend a billion on this. Just my guess.
Title: Re: GOOGL - Google
Post by: Palantir on February 12, 2013, 09:59:04 AM
No, that traffic is worth more to Bing.

That extra traffic would suddenly make Bing profitable with no additional investment. Furthermore, the more people use your search, the better it gets, there is no question Bing would benefit more given where it's starting.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 10:05:46 AM

This is fascinating:
http://techcrunch.com/2013/02/12/google-to-pay-apple-1-billion-next-year-to-be-default-search-engine-on-ios/

A few things come out of this:
 - Being the default search provider on iOS is worth $1bn per year to Google.
 - The returns on Google's investment in Android exceed $1bn per year, using this metric as a proxy.
 - $1bn per year in pure profit is all it takes to move Apple from a non-Google phone to a Google phone.  I am somewhat surprised by this.  I would expect that Apple would prefer to hurt Google's mobile business by offering the deal to Bing on substantially better terms.

As valueInv's posts have pointed out, Google is doing an awful lot of deals that amount to paying for traffic.  Is this a flaw in their business model, or are they discouraging competition by buying a moat?  Who else has billions to spend on deals like this?

Google not only pays Apple, it pays operators a cut of the revenue, it subsidizes devices, it is starting to subsidize newspapers, subsidize networks, subsidize patent protection and much more. On top if this, it puts a lot of money in science projects.

The margin conversation we should be having is Google's.

Title: Re: GOOGL - Google
Post by: Liberty on February 12, 2013, 10:22:58 AM
No, that traffic is worth more to Bing.

That extra traffic would suddenly make Bing profitable with no additional investment. Furthermore, the more people use your search, the better it gets, there is no question Bing would benefit more given where it's starting.

The way I see it, it's worth more as a relative share of total revenue/traffic to Bing than Google, but it's worth more to Google in absolute dollar terms.
Title: Re: GOOGL - Google
Post by: wellmont on February 12, 2013, 10:46:18 AM
No, that traffic is worth more to Bing.

That extra traffic would suddenly make Bing profitable with no additional investment. Furthermore, the more people use your search, the better it gets, there is no question Bing would benefit more given where it's starting.

yeah it's too bad apple doesn't want bing on it's  phone. it's users would revolt.
Title: Re: GOOGL - Google
Post by: blainehodder on February 12, 2013, 10:46:38 AM
As valueInv's posts have pointed out, Google is doing an awful lot of deals that amount to paying for traffic.  Is this a flaw in their business model, or are they discouraging competition by buying a moat?  Who else has billions to spend on deals like this?

...Or, rather than a flaw, the billion dollar equity outlay could result in 1.2 or more billion in net income, no?  Wouldnt that just be smart capital allocation?  Is cementing the moat and cutting out the competition just a cherry on top?

Is it unreasonable to assume 250 million + and growing iphones constantly performing google searches would generate $8-10 revenue/user?  1 billion starts to look pretty cheap in that case, and they should be buying traffic with high returns like that all they want.   Would this hurt margins?
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 11:01:00 AM
As valueInv's posts have pointed out, Google is doing an awful lot of deals that amount to paying for traffic.  Is this a flaw in their business model, or are they discouraging competition by buying a moat?  Who else has billions to spend on deals like this?

...Or, rather than a flaw, the billion dollar equity outlay could result in 1.2 or more billion in net income, no?  Wouldnt that just be smart capital allocation?  Is cementing the moat and cutting out the competition just a cherry on top?

Is it unreasonable to assume 250 million + and growing iphones constantly performing google searches would generate $6-10 revenue/user?  1 billion starts to look pretty cheap in that case, and they should be buying traffic with high returns like that all they want.   Would this hurt margins?

As users move from desktop to mobile, mobile revenues replace desktop. If the cost of mobile revenues is much higher , it will result in declining margins.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 11:05:02 AM
No, that traffic is worth more to Bing.

That extra traffic would suddenly make Bing profitable with no additional investment. Furthermore, the more people use your search, the better it gets, there is no question Bing would benefit more given where it's starting.

yeah it's too bad apple doesn't want bing on it's  phone. it's users would revolt.

I would guess that their search strategy revolves around Siri. If I was Apple, I would work with MSFT to plug Bing into Siri and bring advanced search.
Title: Re: GOOGL - Google
Post by: VAL9000 on February 12, 2013, 11:05:28 AM
...Or, rather than a flaw, the billion dollar equity outlay could result in 1.2 or more billion in net income, no?  Wouldnt that just be smart capital allocation?  Is cementing the moat and cutting out the competition just a cherry on top?

Is it unreasonable to assume 250 million + and growing iphones constantly performing google searches would generate $6-10 revenue/user?  1 billion starts to look pretty cheap in that case, and they should be buying traffic with high returns like that all they want.   Would this hurt margins?

As users move from desktop to mobile, mobile revenues replace desktop. If the cost of mobile revenues is much higher , it will result in declining margins.

This is true, but cementing the lead in mobile advertising is clearly worth $1bn today.  Besides, when everyone ditches their Apple devices for Android devices, this cost will go away ;)

I bet 75% of Apple users wouldn't even notice if Google were swapped for Bing.
Title: Re: GOOGL - Google
Post by: Liberty on February 12, 2013, 11:19:36 AM
As users move from desktop to mobile, mobile revenues replace desktop. If the cost of mobile revenues is much higher , it will result in declining margins.

It's not as simple as moving from one to the other, though. People do more total searches  when they have Google in their pocket at all times rather than just when they are in front of their computer. A lot of those search are additional searches, not just the same searches done on a different device.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 11:22:13 AM
As users move from desktop to mobile, mobile revenues replace desktop. If the cost of mobile revenues is much higher , it will result in declining margins.

It's not as simple as moving from one to the other, though. People do more total searches  when they have Google in their pocket at all times rather than just when they are in front of their computer. A lot of those search are additional searches, not just the same searches done on a different device.
How do you know?
Title: Re: GOOGL - Google
Post by: blainehodder on February 12, 2013, 11:30:16 AM
How do you know?
[/quote]

While a couple data points hardly proves anything, I certainly perform far more searches on a daily basis than I did before I had a smartphone.  Same thing for my family and friends.  A quick glance around a train, or public sidewalk seems to confirm that more and more searches, potentially of a more local nature are being performed.
Title: Re: GOOGL - Google
Post by: Liberty on February 12, 2013, 11:31:40 AM
How do you know?

I've seen it. I bet even you do it that way. All the searches that you do when not in front of your computer, would you do all of those if you didn't have a smartphone?
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 11:40:32 AM
...Or, rather than a flaw, the billion dollar equity outlay could result in 1.2 or more billion in net income, no?  Wouldnt that just be smart capital allocation?  Is cementing the moat and cutting out the competition just a cherry on top?

Is it unreasonable to assume 250 million + and growing iphones constantly performing google searches would generate $6-10 revenue/user?  1 billion starts to look pretty cheap in that case, and they should be buying traffic with high returns like that all they want.   Would this hurt margins?

As users move from desktop to mobile, mobile revenues replace desktop. If the cost of mobile revenues is much higher , it will result in declining margins.

This is true, but cementing the lead in mobile advertising is clearly worth $1bn today.  Besides, when everyone ditches their Apple devices for Android devices, this cost will go away ;)

I bet 75% of Apple users wouldn't even notice if Google were swapped for Bing.

The 1 billion is only Googles payment to Apple. They're paying operators a lot more. Lets say their deal with operators and Apple is the same: 30% of search revenues. If Androids market share is 3x Apples, they're paying an additional $3B to operators all over the world. Guess why Android is gaining market share quickly.

Google's revenues grew about 22% yoy. How much did net income grow?
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 11:41:47 AM
How do you know?

I've seen it. I bet even you do it that way. All the searches that you do when not in front of your computer, would you do all of those if you didn't have a smartphone?

I'd wait till I get back to my desk.
Title: Re: GOOGL - Google
Post by: wellmont on February 12, 2013, 11:43:01 AM
No, that traffic is worth more to Bing.

That extra traffic would suddenly make Bing profitable with no additional investment. Furthermore, the more people use your search, the better it gets, there is no question Bing would benefit more given where it's starting.

yeah it's too bad apple doesn't want bing on it's  phone. it's users would revolt.

I would guess that their search strategy revolves around Siri. If I was Apple, I would work with MSFT to plug Bing into Siri and bring advanced search.

maybe down the road. and you're right siri does need to get better. but google is a verb. and people want their google. even IOS users. I think a longer term issue for apple is what happens if google now starts to extend it's lead over siri just as google maps has done?
Title: Re: GOOGL - Google
Post by: Liberty on February 12, 2013, 11:48:30 AM
I'd wait till I get back to my desk.

Good for you, having a superhuman memory to remember all the things you'd like to look up throughout the day and then doing a big batch of searches later, but if that's how you do it, you are an exception.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 12:00:00 PM
I'd wait till I get back to my desk.

Good for you, having a superhuman memory to remember all the things you'd like to look up throughout the day and then doing a big batch of searches later, but if that's how you do it, you are an exception.
I spend most of my waking hours in front of a computer screen. I don't need to remember much.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 12:01:09 PM
No, that traffic is worth more to Bing.

That extra traffic would suddenly make Bing profitable with no additional investment. Furthermore, the more people use your search, the better it gets, there is no question Bing would benefit more given where it's starting.

yeah it's too bad apple doesn't want bing on it's  phone. it's users would revolt.

I would guess that their search strategy revolves around Siri. If I was Apple, I would work with MSFT to plug Bing into Siri and bring advanced search.

maybe down the road. and you're right siri does need to get better. but google is a verb. and people want their google. even IOS users. I think a longer term issue for apple is what happens if google now starts to extend it's lead over siri just as google maps has done?
How come Apple's maps usage is higher now than before IOS 6 launch then?
Title: Re: GOOGL - Google
Post by: Liberty on February 12, 2013, 12:18:39 PM
I spend most of my waking hours in front of a computer screen. I don't need to remember much.

Me too, but I know I'm an extreme case.

The reason people do more searches on average in a day when they have a search engine in their pocket is the same reason why people will check facebook more often on average in a day if they have a facebook app in their pocket, or email, or whatever. I don't think it's too controversial to say that ceteris paribus, people check email/facebook/the web more often if they have a smartphone than if they don't (they don't just transfer the same quantity from desktop to mobile, they add on top of it because of the extra convenience and availability), and the same applies for search in my experience.

Even if I saw data that showed a decline in the average number of searches from mobile users, to be truly convinced I'd have to look closely at the sample used because I wouldn't be surprised if it included a lot of people that didn't use to go online much before smartphones and tablets, and so of course they'll be less active than more technologically-inclined people from the desktop-laptop era (it would be comparing apples and oranges). But bringing these people on board is still a win in the absolute because it's extra searches that wouldn't have been made before, even if they dilute the average.

This happens when you make something more accessible. As a relative number, more computer users knew how to program in the 1980s than now, but the absolute number of people who know how to program is much higher now because the whole pie is much larger.
Title: Re: GOOGL - Google
Post by: hyten1 on February 12, 2013, 12:21:41 PM
just a casual comment

more search on mobile might actually be bad, mobile ads are not as profitable as desktop ads, then again more search with mobile but less profit per search compare to desktop

Title: Re: GOOGL - Google
Post by: Palantir on February 12, 2013, 12:52:11 PM
A shift to mobile is not a "permanent" impairment in profitability. It's merely a new paradigm and challenge that the company has to figure out and the result is uncertain. I think it is a mistake to automatically discount cash flows based on such a faulty assumption.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 12:53:00 PM
just a casual comment

more search on mobile might actually be bad, mobile ads are not as profitable as desktop ads, then again more search with mobile but less profit per search compare to desktop

This is not even counting the money they need to pay out to Apple and others.
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 12:53:40 PM
A shift to mobile is not a "permanent" impairment in profitability. It's merely a new paradigm and challenge that the company has to figure out and the result is uncertain. I think it is a mistake to automatically discount cash flows based on such a faulty assumption.
What assumption?
Title: Re: GOOGL - Google
Post by: hyten1 on February 12, 2013, 01:02:27 PM
palantir

i hear ya, i don;t know if its permanent impairment, than again neither do you.

but for now mobile ads are less profitable (its a small ad on a small screen, usually you are on the go, people can come up with tons of reason). not saying this can't be overcome (who knows)

until the promise land/holy grail of targeting ads are achieve (people have been saying this since the internet started, you can target specifically base on what the user wants etc etc)

i honestly don't know, but it is something to be concern about if the rate of of ad moving to mobile is faster than the rate they can overcome this problem (mobile ad are less profitable) then we have a problem. I think FB is facing this issue right now.

FB is another example we all know what the holy grail/promise land is with FB (you got tons of personal data, ads should be very targeted which translates to more money for FB). however this still has not happen yet, not saying it won't. I do have my doubts.

hy
Title: Re: GOOGL - Google
Post by: rkbabang on February 12, 2013, 01:08:41 PM
I'd wait till I get back to my desk.

Good for you, having a superhuman memory to remember all the things you'd like to look up throughout the day and then doing a big batch of searches later, but if that's how you do it, you are an exception.
I spend most of my waking hours in front of a computer screen. I don't need to remember much.

This is the reason I don't even have a smartphone.  I have $0.10/min and $0.10/text pre-paid dumb phone from Boost Mobile.  I very seldom need to look something up and can't, I'm almost always in front of a computer (or iPad) or near one.   I think you and I are the exceptions though.  Most people do not stare at a computer screen for 8-10 hours per day.   If they didn't have a smartphone they would do far fewer searches. 
Title: Re: GOOGL - Google
Post by: valueInv on February 12, 2013, 01:23:21 PM
I'd wait till I get back to my desk.

Good for you, having a superhuman memory to remember all the things you'd like to look up throughout the day and then doing a big batch of searches later, but if that's how you do it, you are an exception.
I spend most of my waking hours in front of a computer screen. I don't need to remember much.

This is the reason I don't even have a smartphone.  I have $0.10/min and $0.10/text pre-paid dumb phone from Boost Mobile.  I very seldom need to look something up and can't, I'm almost always in front of a computer (or iPad) or near one.   I think you and I are the exceptions though.  Most people do not stare at a computer screen for 8-10 hours per day.   If they didn't have a smartphone they would do far fewer searches.
Yup. This demonstrates the problems with using anecdotal or segmented information.
Title: Re: GOOGL - Google
Post by: Palantir on February 19, 2013, 08:43:57 AM
I called GOOG going to 800.

FYI.
Title: Re: GOOGL - Google
Post by: Palantir on February 19, 2013, 08:45:49 AM
i hear ya, i don;t know if its permanent impairment, than again neither do you.

but for now mobile ads are less profitable (its a small ad on a small screen, usually you are on the go, people can come up with tons of reason). not saying this can't be overcome (who knows)

Presciently enough, Steve Jobs noted this a few years ago - how search advertising was not the way to do mobile as people spent most of their time inside apps.
Title: Re: GOOGL - Google
Post by: txlaw on February 21, 2013, 01:00:31 PM
Google introduces Chromebook Pixel:

http://news.cnet.com/8301-1023_3-57570520-93/googles-chromebook-pixel-elevates-chrome-os-ambitions/

http://chrome.blogspot.com/2013/02/the-chromebook-pixel-for-whats-next.html
Title: Re: GOOGL - Google
Post by: hellsten on February 21, 2013, 01:46:36 PM
Google introduces Chromebook Pixel:

http://news.cnet.com/8301-1023_3-57570520-93/googles-chromebook-pixel-elevates-chrome-os-ambitions/

http://chrome.blogspot.com/2013/02/the-chromebook-pixel-for-whats-next.html

This is probably one of the last computers on earth that I would buy. No apps… For the same price you could get an iPad and a Surface Pro, with apps…
Title: Re: GOOGL - Google
Post by: txlaw on February 21, 2013, 01:53:33 PM
Google introduces Chromebook Pixel:

http://news.cnet.com/8301-1023_3-57570520-93/googles-chromebook-pixel-elevates-chrome-os-ambitions/

http://chrome.blogspot.com/2013/02/the-chromebook-pixel-for-whats-next.html

This is probably one of the last computers on earth that I would buy. No apps… For the same price you could get an iPad and a Surface Pro, with apps…

I agree.  It appears to be more of a proof of concept -- another Google Glass type foray showing everyone how they're innovating like crazy at Mountain View.

There are apps, but they're web apps.   
Title: Re: GOOGL - Google
Post by: tradevestor on February 21, 2013, 02:13:27 PM
There are thousands of apps.
https://chrome.google.com/webstore/category/home (https://chrome.google.com/webstore/category/home)
including several offline apps https://chrome.google.com/webstore/category/collection/offline_enabled (https://chrome.google.com/webstore/category/collection/offline_enabled)
Title: Re: GOOGL - Google
Post by: hellsten on February 21, 2013, 02:15:22 PM
Google introduces Chromebook Pixel:

http://news.cnet.com/8301-1023_3-57570520-93/googles-chromebook-pixel-elevates-chrome-os-ambitions/

http://chrome.blogspot.com/2013/02/the-chromebook-pixel-for-whats-next.html

This is probably one of the last computers on earth that I would buy. No apps… For the same price you could get an iPad and a Surface Pro, with apps…

I agree.  It appears to be more of a proof of concept -- another Google Glass type foray showing everyone how they're innovating like crazy at Mountain View.

There are apps, but they're web apps.

I wonder how much of what Google does, outside of search and advertising, really makes sense. All these different projects must steal a lot of time from management and engineers. I wouldn't be surprised if a smaller and more focused company takes one of Google's ideas and outperforms Google (e.g. Microsoft and http://en.wikipedia.org/wiki/Microsoft_Tablet_PC). It has already happened in Russia (Yandex) and China (Baidu). My guess, which I admit is most likely wrong, is that it will happen to Android too at some point, because the platform is so fragmented and the quality of the apps and user experience is so bad.
Title: Re: GOOGL - Google
Post by: txlaw on February 21, 2013, 02:27:44 PM
There are thousands of apps.
https://chrome.google.com/webstore/category/home (https://chrome.google.com/webstore/category/home)
including several offline apps https://chrome.google.com/webstore/category/collection/offline_enabled (https://chrome.google.com/webstore/category/collection/offline_enabled)

Correct. 

hellsten, the idea is that the apps for ChromeOS are web technology-based.  And there is functionality offline as well for some apps.  It's GOOG trying to make the web the platform.  ChromeOS is the long game.  Android, which has native apps, is the short game.

Ultimately, it makes sense for GOOG to push this, as they really care about their service and software offerings.  More evidence for you guys that the licensing model for the OS could possibly be decimated over the next decade. 

Personally, I prefer iOS at the moment to Android.  But the innovation gap continues to close, and I think it's odd that so many of you guys (particularly, the AAPL investors) say that the Android UX is terrible.  It only seems to be getting better and better from my experience with Android devices.
Title: Re: GOOGL - Google
Post by: hellsten on February 21, 2013, 03:10:32 PM
There are thousands of apps.
https://chrome.google.com/webstore/category/home (https://chrome.google.com/webstore/category/home)
including several offline apps https://chrome.google.com/webstore/category/collection/offline_enabled (https://chrome.google.com/webstore/category/collection/offline_enabled)

All the apps I've downloaded from the Chrome Webstore have been, in one way or the other, crippled versions of apps or games I use on OSX, iOS and Windows. I've tried several Chrome apps and games, but the user experience is so bad I have stopped visiting the Chrome Webstore. I'm not using a single Chrome application at the moment.

Google has basically lost me as a future Android and Chrome Webstore customer because of their bad (cheap) user experience (hardware and software). txlaw, I agree that user experience has been improving, and for the majority of users the user experience no longer seems to be an issue. Anyway, for me most of Google's products are crippled versions of competitors' products (Office, Dropbox, iOS, etc). Their search engine and ad platform are still the best products in their respective categories.

I couldn't find any revenue figures for the Chrome Webstore, but I found these statistics:
Quote
15,911 packaged apps
  4,773 hosted apps

5 apps have 10+ million active users.

Quote
0-100: 20330
100-1K: 15772
1K-10K: 9263
10K-100K: 2856
100K-1M: 569
1M-10M: 41
10M+: 5

Source: http://browserfame.com/933/chrome-web-store-stats-presentation

It's clear Google is trying to build a cloud operating system:
http://www.businessinsider.com/2008/9/google-chrome-browser-takes-page-out-of-microsoft-book-link-and-lever

Note that I still think Google is a great company, I just wonder if they should focus more on search and advertising.
Title: Re: GOOGL - Google
Post by: txlaw on February 21, 2013, 03:45:07 PM
Note that I still think Google is a great company, I just wonder if they should focus more on search and advertising.

Here's my take.  GOOG's core business is to provide search, AI, and augmented reality, and to monetize those services through the data it gathers (whether by advertising or otherwise). 

One major point of attack against GOOG is to control the OS layer between the end user and Google services.  Therefore, GOOG provides Android and ChromeOS.  Also, the more people are using the Web, the better GOOG does because they get a greater share of a person's time. 

And we haven't even gone into their other services (e.g., YouTube, Docs, IaaS, and PaaS) that benefit from having these GOOG-produced platforms.  So to me, it makes a lot of sense what GOOG is doing.  It's all about growing the business, expanding the moat, and at the same time pushing the boundaries of technology and advancing the civilization.
Title: Re: GOOGL - Google
Post by: valueInv on February 21, 2013, 05:40:46 PM
Google introduces Chromebook Pixel:

http://news.cnet.com/8301-1023_3-57570520-93/googles-chromebook-pixel-elevates-chrome-os-ambitions/

http://chrome.blogspot.com/2013/02/the-chromebook-pixel-for-whats-next.html

This is probably one of the last computers on earth that I would buy. No apps… For the same price you could get an iPad and a Surface Pro, with apps…

I agree.  It appears to be more of a proof of concept -- another Google Glass type foray showing everyone how they're innovating like crazy at Mountain View.

There are apps, but they're web apps.

I wonder how much of what Google does, outside of search and advertising, really makes sense. All these different projects must steal a lot of time from management and engineers. I wouldn't be surprised if a smaller and more focused company takes one of Google's ideas and outperforms Google (e.g. Microsoft and http://en.wikipedia.org/wiki/Microsoft_Tablet_PC). It has already happened in Russia (Yandex) and China (Baidu). My guess, which I admit is most likely wrong, is that it will happen to Android too at some point, because the platform is so fragmented and the quality of the apps and user experience is so bad.

They've announced a crippled laptop for $1299 the year in which tablet sales will overtake laptop sales. They surely know how to skate where the puck is going  ;D ;D ;D

They're driven by a serious case of Apple envy. They're talking about retail stores when they're already making little to no margins on their physical products. Gradually, the low cost competitor keeps adding to its cost structure and hopes to compete on price. :o
Title: Re: GOOGL - Google
Post by: txlaw on February 22, 2013, 08:06:40 AM
Apparently, there is a chance that a Nexus 5 will be coming in a couple of months.

http://www.telegraph.co.uk/technology/news/9802194/Google-Nexus-5-launching-next-month.html
Title: Re: GOOGL - Google
Post by: wellmont on February 22, 2013, 08:08:33 AM
things are starting to get interesting...new gs4, new nexus 5, and new moto X phone coming soon...oh and the z10 is coming to the usa.
Title: Re: GOOGL - Google
Post by: valueInv on February 25, 2013, 06:49:38 PM
Update on Google TV:

http://gigaom.com/2013/02/25/lg-webos-smart-tv/
Title: Re: GOOGL - Google
Post by: valueInv on February 25, 2013, 09:56:02 PM
I've heard people on this thread make the point that Android is good for Google because it gives Google better control over the devices and how its services are delivered. I've argued to the contrary. Here's another proof point:

http://online.wsj.com/article/SB10001424127887323699704578324220017879796.html

http://www.computerworld.com/s/article/9237109/Samsung_s_next_gen_NFC_smartphones_and_tablets_to_get_Visa_s_mobile_payment_applet

Where's Google wallet?
Title: Re: GOOGL - Google
Post by: no_free_lunch on March 01, 2013, 07:45:38 PM
Interesting forum discussion where the participants are discussing the rapidly escalating costs of googles system.  Just another example of how awesome google is:

Quote
I remember back in 2005, Google Adwords charged my business 5 - 15 cents per click. My website didn't have much or any natural search ranking at the time.
..
Now the Google Adwords Cost Per Click has gone up to at the very least 60 cents. Some combinations of keywords are above one dollar.

The price was risen from 5 to 60 cents (and above) in the space of 7 years. This is massive inflation. And that doesn't count the keywords that have all moved to 1 dollar and above, which I no longer pay any attention to.

..

We're all in the same boat (I have keywords that are $5 I'd like to bid on), but we keep coming back to Google because it works.  If it doesn't work, you have to adapt and do something different.

http://discuss.joelonsoftware.com/default.asp?biz.5.851538.34
Title: Re: GOOGL - Google
Post by: Liberty on March 01, 2013, 07:58:06 PM
They're complaining about market-set prices. If people are bidding keywords up, it's because they're still making a profit at those prices.
Title: Re: GOOGL - Google
Post by: hellsten on March 02, 2013, 02:43:44 PM
Google and the world brain:
Quote
Documentary which tells the story of the most ambitious project ever conceived on the internet and the people who tried to stop it. In 1937 HG Wells predicted the creation of the 'world brain', a giant global library that contained all human knowledge which would lead to a new form of higher intelligence. 70 years later the realisation of that dream was under way, as Google scanned millions of books for its Google Books website. However, over half those books were still in copyright and authors across the world launched a campaign to stop them, climaxing in a New York courtroom in 2011.

This is a film about the dreams, dilemmas and dangers of the internet, set in spectacular locations in China, USA, Europe and Latin America.

http://www.bbc.co.uk/programmes/b01qxmqc

Trailer:
http://www.youtube.com/watch?v=RZkdkobK99A
Title: Re: GOOGL - Google
Post by: ItsAValueTrap on March 03, 2013, 05:21:28 PM
Quote
They're complaining about market-set prices. If people are bidding keywords up, it's because they're still making a profit at those prices.
That's why Google is awesome.  :)

Competition among its customers will drive up its pricing.  As more people discover Internet advertising (and more people buy things online and online retailers offer more variety and lower prices), there will be more competition.
Title: Re: GOOGL - Google
Post by: valueInv on March 03, 2013, 07:09:50 PM
Interesting forum discussion where the participants are discussing the rapidly escalating costs of googles system.  Just another example of how awesome google is:

Quote
I remember back in 2005, Google Adwords charged my business 5 - 15 cents per click. My website didn't have much or any natural search ranking at the time.
..
Now the Google Adwords Cost Per Click has gone up to at the very least 60 cents. Some combinations of keywords are above one dollar.

The price was risen from 5 to 60 cents (and above) in the space of 7 years. This is massive inflation. And that doesn't count the keywords that have all moved to 1 dollar and above, which I no longer pay any attention to.

..

We're all in the same boat (I have keywords that are $5 I'd like to bid on), but we keep coming back to Google because it works.  If it doesn't work, you have to adapt and do something different.

http://discuss.joelonsoftware.com/default.asp?biz.5.851538.34

A quick look through Google's finances will show that CPCs have been declining. It was only in the last one quarter that CPCs show a halt (lull?) in the decline.
Even then, CPCs were lower on a YoY basis.
Title: Re: GOOGL - Google
Post by: Palantir on March 03, 2013, 08:07:30 PM
^ Isn't that sort of like Apple's declining margins on the iPad because of the introduction of the Mini? :)

Introduction of a new, lower margin set of revenue is going to bring down margins overall. How have desktop/traditional searches done? That's the relevant question.
Title: Re: GOOGL - Google
Post by: valueInv on March 03, 2013, 08:52:44 PM
^ Isn't that sort of like Apple's declining margins on the iPad because of the introduction of the Mini? :)

Introduction of a new, lower margin set of revenue is going to bring down margins overall. How have desktop/traditional searches done? That's the relevant question.
I'm not sure how that even compare but a few things that are quite different:

1, iPad mini cannibalizes the iPad, not the iPhone which is Apple's biggest product. Mobile cannibalizes desktop search which is still Google's biest product by far. Take a look at PC sales numbers. Over time, there will be no dekstop searches.
2, iPad has growing software revenue which is on top of the hardware revenue. There is no such equivalent for Google.
Title: Re: GOOGL - Google
Post by: VAL9000 on March 04, 2013, 06:39:50 AM
1, iPad mini cannibalizes the iPad, not the iPhone which is Apple's biggest product. Mobile cannibalizes desktop search which is still Google's biest product by far. Take a look at PC sales numbers. Over time, there will be no dekstop searches.
That's going to be tough for you given that you claim you only ever search on your desktop...  I guess you will be the last hold-out.

Actually, cannibalization doesn't even matter.  Google's recent changes to their search advertising system have grouped tablets and desktops together.  Even as desktops are replaced by tablets, the economics for this segment will continue to default to today's desktop CPCs.

If you're saying that mobile is cannibalizing desktop + tablet, then I say show me the data.

2, iPad has growing software revenue which is on top of the hardware revenue. There is no such equivalent for Google.
Is Google Play not an equivalent?  It's nascent, but it's the same thing as the App Store, no?  What about Google Apps for Business?  Kind of like iCloud.
Title: Re: GOOGL - Google
Post by: Palantir on March 04, 2013, 07:23:31 AM
How much are y