Google

Baidu and Yahoo China, two of the most popular search engines in China, facilitate the country’s near 100% rate of downloaded music that is stolen. That’s right, almost all music downloaded in China is stolen (more proof that the Chinese are smarter than us). Other search engines in China, like Google China, don’t have a built-in mp3 download tab, and are pissed that they can’t gain search engine market share.
The International Federation of the Phonographic Industry (and the world of tomorrow), a consortium that includes reps from Sony BMG, Universal and Warner, is on the case, suing nearly everyone in China. The organization reportedly wins 90% of its lawsuits, but loses suits against the big boys like Baidu, which entrenches the current search engine pecking order by crippling the little guy… with slaps on the wrist. Since the averages damages awarded per lawsuit amount to $130 (yes, dollars), getting sued isn’t that big of a deal to a budding search provider. The IFPI spends about $13k per case, which is a bold profit shucking initiative that only the record companies could dream up.
In other search engine news, Google and Yahoo have teamed up with Mercedes to allow each search enginge’s map services to be sent to your car, if your car is a Mercedes. You know the state of auto-navigation is in trouble when car GPS systems are Google mapping a destination. The service will be available on the S-class, CL-class and entire 2008 C-class lineup.
Deaf to Music Piracy [BusinessWeek via Valleywag]
Google, Yahoo to direct your Mercedes [News.com via Valleywag]

  • 17 Aug 2007 at 3:25 PM
  • Google

Great Moments In Financial History: Google’s Disappointing IPO

Sunday is the 3 year anniversary of the Google IPO, which means that it’s been three years since you blurted out “I told you guys, it didn’t open anywhere near $100. Short that shit and you’re printing money.”
A 480% three-year return on GOOG later. Whoops.
It’s not to say that you haven’t been on your game at all in the past 3 years. Kicking around some tech stock ideas you did utter the wisdom, “But hey, iPods are cool. It’s like everyone has one of those things. Clearly that market dominance is already priced into Apple’s stock. Just wait until Microsoft gets into the market. I’m telling you, short Apple and you’re printing money.” A 640% three-year return on AAPL since August 2004 and you blew it again.
Ok, ok, we won’t forget your one triumph, which trumps all your other misses. You noticed that the only banker chicks who haven’t gained the “Seamless 15″ eat only NutriSystem bars and are constantly going to the bathroom to either cry or throw them up. This netted you a ridiculous 3,000% return on NTRI, which you bought in August 2004 after that one hot summer managed to not blow up after 8 weeks. Maintaining eye candy on the floor was something you were more than ready to invest in, not to mention put your mouth where your money was going.
Google’s Historic IPO Run: Beatable [BusinessWeek via DealBook]

  • 25 Jul 2007 at 12:06 PM
  • Google

Is It Finally Time To Short Google?

Yes, says Fortune’s Geoff Colvin. Sure, there have been people claiming Google has hit the ceiling during almost every phase of Google’s unprecedented value creation ascent, but Colvin swears that Google is bound for a tumble. The reason – Google can’t keep investing capital at 13% and getting 53% returns, a spread better than 99% of the Russell 3000. Google has only invested about $9 billion of capital so far but is experiencing diminishing returns, from 111% four years ago, to 82% the year after, to 53% in the last four quarters.
Colvin looks at Google’s implied future economic value added (EVA, or the dollar amount by which return on capital exceeds the cost of capital) in relation to its current share price. His argument:

To live up to the expectations embedded in its current share price, Google would have to increase its EVA, which was $2.4 billion for the past four quarters, by $2 billion annually this year, next year, and every year into the future – forever. So Google’s EVA next year would have to be $4.4 billion; in five years it would have to be $12.4 billion, and so on.
That’s what investors are counting on when they buy Google at today’s price. Are they being realistic? No, they’re not. To hit that EVA target, Google would have to invest $5.1 billion every year at its recent knockout return of 52.5 percent (assuming its capital cost doesn’t vary much). But you can’t invest $5.1 billion every year at 52.5 percent.

Google (Nasdaq: GOOG) is down almost a half a percent in daily trading.
Don’t go gaga over Google [Fortune via CNN Money]

  • 20 Jul 2007 at 11:05 AM
  • Google

GOOGLE FAILS

googleviolatedthiscat.jpgGolden child Google missed analysts unrealistic expectations of what the search engine is capable of in quarterly results yesterday. This is the second time the company has failed since its 2004 IPO. Investors unconsensually punished the stock in after hours trading, with shares falling up to 8.3% ($45.29), to $503.40, to say nothing of the cutting and “You sicken me” chanting by Larry and Serge in front of the bathroom mirror.
Google’s work force ballooned 13% and research costs shot up 88%, in an effort to put unauthorized crotch shots of tabby cats on Street Views. Some ideas for cutting back on soaring costs, which investment strategist Carsten Klude maintains are vital to a company like Google’s growth, include taking away the free lunches and not buying any more of the founders’ wife’s companies in an effort to get out of taking out the trash.
Google Drops on Profit Miss, Auction Spending Plan [Bloomberg]

  • 13 Jul 2007 at 10:02 AM
  • FaceBook

Google Will Wait For FaceBook to Make the First Move

facebook.bmpIf Mark Zuckerberg wants to know what it’s like to be touched by Sergey Brin and Larry Page (A. Weird at first, then really kind of nice), he’s going to put it out there in no uncertain terms, Brin told DealBook Sun Valley correspondent David Carr yesterday in Sun Valley. “We don’t really look at companies for acquisitions unless they are really interested,” Brin said, not saying that he’s run into with “mixed signals” before but seeming to imply it. “If they come to us, we’d certainly be open to talking,” he added, meaning “You come 90, we’ll come 10.”
Facebook, who turned down a $1 billion offer from Yahoo last year is under the impression that Google et al will want it for its new “Platform” (and mind) at least $2 billion. FB’s recent “growth spurt,” open policy, etc, also has people talking about a big buy, although there are some around these part who think Facebook’s crossover from exclusive to inclusive* (plus its insistence on overloading the page with, what’s the word, crap) should be a signal to companies to stay away and let the thing IPO itself in 2009.
Sun Valley: Google and the Facebook Question [DealBook]
Google’s Brin Says Won’t Pursue Facebook [CNBC]
Exploding Bubbles: Facebook Widgets And Your Butt [Wired]
*while lacking the intrinsic trashiness that makes MySpace’s spread legs okay

  • 06 Jul 2007 at 11:30 AM
  • FaceBook

GoogTubeBook?

In the Web 2.0 parlor game of deciding who’s going to buy facebook, guessing “Google” isn’t exactly earth-shattering, but it’s probably the most accurate guess one could make. Saul Hansell of the New York Times Bits Blog does just that, reasoning that Google might buy facebook just to cockblock rivals (a little too late for that, as I’m not sure any of Google’s rivals would pony up the $$ at this point). Our guess at DB is “none of the above” – since we don’t think any company will (would or should) pay what Zuckerberg wants for his “platform,” and the thing will just IPO in early 2009 or even late next year.
Facebook’s growth, and more importantly, it’s marketing, give Zuckerberg most of the negotiating leverage when it comes to a potential deal. From the Bits Blog:

The bottom line is that this gives Mark Zuckerberg, Facebook’s young founder, chief executive and largest stockholder, a lot of options. He can sell the company for a lot of money, take it public or just grow with internally generated cash as was the strategy at Google, a company he idolizes.
By the way, if Zuckerberg does sell, my guess is that it’s Google that buys Facebook. Yahoo needs it much more. But Google has a penchant for using its financial muscle to keep hot companies out of the hands of rivals (wresting YouTube from the News Corporation and DoubleClick from Microsoft, for example).

3.6 Million New Faces [New York Times Bits Blog via DealBook]

Google V. Goldman

goldman-vs-google.JPGSmart people would rather work at Google than Goldman Sachs, Bloomberg reports today. One reason is that “Goldman’s current package is not enough to compete with West Coast IT companies.” But then again, if you work at Goldman, you get to play with Excel all day. It’s so hard to decide, we know. Having difficulty picking one G over the other? We’ve broken it down for you, after the jump.
Goldman Meets Match in Googleplex When Recruiting Graduates [Bloomberg]

Read more »

Google bigger than Berkshire

From the WSJ’s MarketBeat column, Google is bigger than Berkshire Hathaway in terms of market cap. Coming off the second worst week of the year for stocks, and the end of the 14 quarter streak of double-digit earnings growth for S&P companies, Google now has a market cap of $166.3bn and Berkshire Hathaway has a market cap of $165.6bn. Berkshire makes more net income than Google makes in revenue, but has worse margins, growth and is void of that whole ‘impending world domination’ ethos. Berkshire companies pull in $98bn in revenue and $11bn in net income while Google pulls in $11bn of revenue and $3bn in net income. Google has a 29% LTM net profit margin, which is the 8th highest in the NASDAQ-100, and just ahead of Microsoft’s 28%.
Midday Tidbits: Google, Bigger Than Berkshire [Wall Street Journal MarketBeat]