google earnings

[Comptalk]

I guess we will see my friend, I guess we will see...

 

[scriabinop23]

Quote from Comptalk:

I think they screw it up and tank. They spend money like it is going out of style. To pay 1/3 more than the company is worth.. Crazy... The Youtube thing is boiling over. If they loose in court against Viacom. They are dead. They have no control on their evaluations on companies. In terms of Yahoo.. They need Microsoft more than Microsoft needs them. I think they will be acquired by Microsoft within the next year. They either have to align themselves with Google or Microsoft. I doubt the first is an option. The second is if Semel comes down on what he think the company is really worth. I think he wants close to a 100 billion or something. Another nut.

youtube isn't even monetized yet and has no impact on the core business.

google makes money from clicks, ads, and a lot of it. Billions per year at high margin. furthermore, almost 50% of revenues are from outside the US. Last time I checked, the world economy was growing.

google will fail if earnings fail. Youtube and even double click (at the moment) have very little to do with earnings and earnings growth.

Last time I checked, it cost a few years of research work by two guys to create the core concept of google. That concept turned into a multi billion $ business. There's no way yet to know if Double click is a failure or success from the start, since more hinges on integration and net revenue result by a change in purchasing habits from the end customers. If it results in a better product, a customer may be willing to pour even more money into it. And with that, double click may turn into a steal - more worthwhile for google than Microsoft.

So in $$$, google cost very little to create. And early on, you might have laughed at the venture capital funds for putting money into something that wasn't profitable. And you would have been dearly wrong. Growth through exploration and risk taking is what this is about. The payoffs are uncertain, but there certainly exists potential. Thats what seperates google. They aren't buying office buildings and oil fields - quantifiable assets with very definable prospects; they are at the core purchasing intellectual property that can be turned worthless with poor execution, or into a king's ransom with brilliant follow through.

google is 1% youtube and other services, 99% core business. google is 10% off highs. much more up room to go, especially considering their earnings growth is not a direct function of solely local US customers' spending (ie real estate slowdown in US can be made up for growth in other areas anywhere else in the world).

 

[xxxskier]

regardiing goog buying DoubleClick ...No mention of DoubleClick publishers huh? Everyone talks about “value to the advertiser!” - but if NYTimes, AOL, Fox Interactive pull out of their Dart (doubleclick)`deals, guess what? DoubleClick just became worth much less. Why would they pull out? Why wouldn’t they is the question - Google is shaping up to be probably the most serious threat to the online advertising ecosystem that exists, from agencies to clients, and I wouldn’t want Google having a soup to nuts window into my advertising revenue stream, from performance based key word stuff to display? Google as the ulitmate gatekeeper for ad dollars? Nope, no thanks.

I think this one has blowback written on it. they have strong earnings and the stock may lift mext week, but goog's glory days are behind it.

To me the most telling part of the deal is that Doubleclick’s investors refused google stock and demanded cash!

This suggests that those “in the know” at Doubleclick believe either that the deal will not reflect favorably on google’s share price, or more likely that google’s share price does not reflect reality. the supply/demand for goog shares is shifting.

(glad yhoo didn't buy, they must know something......the chief sales officer at yhoo, wenda millard, is a former co-founder doubleclick)

Consider how easily Google could have, say, offered $4B for the company and payed only a fraction in cash. Odds are this deal was offered and refused by Doubleclick.

$3B in cash and $0 in stock is the COMPROMISE that the two sides came to on the matter.

Publishers using doubleclick's DFP are key to Doubleclick’s value. Right now, there’s a decent amount of chat about this on a listserv with the 100 or so top ad ops managers in the country. Many online publishers see Google as a competitor. Now, that competitor owns their ad server. There’s enough good competition in the ad server market to make switching a relatively easy option.

Perhaps Microsoft and Yahoo! tag teamed to make Google burn its war chest knowing that Google is desperate to diversify its revenue as Microsoft and Yahoo!’s Search technology is quickly coming up to parity and will drastically cut down on Google’s margins going forward.

So i think Yahoo bid up YouTube knowing Google is desperate for the money losing sinkhole and Microsoft bid up DCLK.



disclosure: long yhoo. see my previous posts regarding yhoo in other threads.

 

[xxxskier]

forgot to mention that if goog issues more shares to pay for the doubleclick acquisition, it would spell the beginning of the end for goog's lofty pps.

 

[ak15]

Quote from stock_trad3r:

So much negativity which means it will go up another 8% on earnings and an additional 20% the month following

I've been long since 411 and bought more at 540

You bought more at 540? You've bought at a price that google has never reached yet?

 

[scriabinop23]

Quote from ak15:

You bought more at 540? You've bought at a price that google has never reached yet?

It reached somewhere around 520-525 last earnings in before hours trading after last earnings. Opened much lower.

 

[ak15]

Quote from scriabinop23:

It reached somewhere around 520-525 last earnings in before hours trading after last earnings. Opened much lower.

I remember that day very well. Feb 1 2007. In afterhours trading on Jan31, 2007 the stock was down 1.4%. In pre-market on Feb 1, it was trading up 1% around 506.52. It kept gradually going up and reached 525 about a minute before the regular open and then started heading south at a frenzied pace not dissimilar to a dog inflicted with rabies. It was brought about by this release from Amtech:

They note that a favorable tax benefit drove upside to pro-forma EPS, which was $3.18 vs. consensus of $2.92. They say the opposite occurred in Q4 of last year when an unfavorable tax rate caused a $0.22 miss and the stock was down 15% in the next 7-days of trading. If the tax rate this quarter was 29% as expected, pro-forma EPS would have been $2.99. Firm thinks investors accustomed to beat-and-raise quarters will be disappointed that results were only inline and street numbers are unlikely to move materially upward. They believe business at GOOG remains very strong, but it seems that expectations have finally caught up at least until new growth initiatives kick in. While the upside surprise factor may be gone in the near-term, the firm believes the multiple also reflects this reality.

Prior to this release the clowns aka Goldman, Stifel Nicolaus, Prudential, Needham and RBC Capital were extolling the virtues of this internet giant and raising targets feverishly each trying to outdo the other.

 

[stock_trad3r]

Quote from ak15:

You bought more at 540? You've bought at a price that google has never reached yet?

That would have really sucked had I somehow bought at 540.

What I meant to say is that I bought at 450.

 

[scriabinop23]

Quote from stock_trad3r:

That would have really sucked had I somehow bought at 540.

What I meant to say is that I bought at 450.

Hey. Don't worry.
I bought at 518. It was the worst trade of my life.

 

[stock_trad3r]

ouch..I remember that morning . It peaked at 522 just 5 minutes before the open and then WHAM..dropped like a ******* rock...