Research archive for GOOG

Oh! That is interesting, the fact that Google have managed to drag a Wall Street type across the country from New York to the Googleplex, which is in Santa Clara County for any of you that have ever been close to that part of the world. Well, do you know the way to San Jose? Ruth Porat better know the way, she has landed the job of CFO at Google, leaving the same job at Morgan Stanley. Check out the Google release: Ruth Porat to Join Google as Chief Financial Officer. The only thing that sticks out for me is that when Porat joined Morgan Stanley in 1987 (an interesting year for equity markets) Larry Page and Sergey Brin were 14. They were going through their geeky years at high school, we all remember those.

Google. You can use it as a verb. As in the "old" days when I asked my pops what something is or was, he said, go look in the dictionary or the encyclopaedia. Now days you can use the company name as a verb, in other words, go Google it! The company turns 17 this year, in September, the founders Larry Page and Sergey Brin are still at the helm, the ex CEO and now chairman, Eric Schmidt is still large and in charge at the business. Recently Google has had some slippage, some questioning that they only have the one business. Whilst looking at their business revenues, it becomes clear that it is all about internet and search.

When Larry met Sergey in 1995 at Stanford University and by 1996 they had built their first search engine. The name Google is a play on the word googol which is a mathematical term for a 1 followed by 100 zeros (nerd alert). Today Google is a regular in everyones vocabulary. It has an answer for everything and more importantly it has the answer that you were most likely looking for.

Google released their second quarter numbers post the bell yesterday, they were very good, in my opinion. You can download the .pdf: Google Inc. Announces Second Quarter 2014 Results and Management Change. Revenues for the quarter of 16 billion Dollars (an increase of 22 percent), operating income was 4.26 billion Dollars, 27 percent of revenues. Nice. On a non GAAP EPS, excluding stock-based compensation (SBC) expense (what the hell?) that number was 6.08 Dollars.

Google are having a proper go at their competitors, currently there is the Google I/O developers conference on the go at a place called the Moscone Center, a 65 thousand square meter centre in San Francisco. Day 2 of the conference ended yesterday. If you want to watch the Google I/O 2014 - Keynote, of course you can do so on YouTube.

One of our core holdings in the US, Google has announced that they are buy video monitoring and security company Dropcam Inc for $555 million. The actual buyer of the company is Google's subsidiary Nest, the "smart appliance" division. The long term goal is to have all your house appliances controlled by a cell phone running the Android software.

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

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

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

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

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

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

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

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

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