Replies to post #3864 on Alphabet Inc (GOOG)

[SeriousMoney]

Earnings Preview: Google
AP, Tuesday April 18, 2:02 pm ET

Google 1Q Results Seen Meeting or Beating Street Expectations

NEW YORK (AP) -- Google Inc. reports earnings for the first quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Mountain View, Calif.-based Google recently unveiled a calendar service that allows users to store appointments online, receive reminders about them and share those plans with others, bringing the Internet search company a step closer to becoming more of an all-purpose portal to rival Yahoo Inc. Google also during the quarter announced an offering of 5.3 million shares to raise more than $2 billion for expansion plans.

Yahoo, one of the largest online information portals, during the quarter announced a deal with CBS Corp. to bring video from CBS's popular "60 Minutes" program to Yahoo's web sites, beginning this fall. Yahoo is also teaming up with AT&T Corp. to offer cobranded mobile Web services on a new Nokia handset. The service, called AT&T Yahoo! Go Mobile, will allow users to access their AT&T Yahoo! services, such as mail, photos, address book and calendar, on pre-loaded Nokia 6682 handsets from Cingular Wireless.

EXPECTATIONS: Analysts expect Google, which doesn't issue financial guidance, to report first-quarter earnings of $1.98 per share on revenue of $1.44 billion, according to Thomson Financial.

ANALYST TAKE: "We believe Google will meet or exceed investor expectations on both top- and bottom-line numbers," Denise Garcia, an analyst at W.R. Hambrecht & Co. said in a client note Monday. "Google enjoys little competition in search monetization, is increasing its share of search and advertiser base and has managed Street expectations."

Garcia maintained her "Buy" rating and of Google and reitereated her price target of $480.

Merrill Lynch analyst Justin Post, in a client note, said he expects Google to meet or beat the Street's revenue expectations. "Google should continue to gain share until search improvement efforts by Microsoft, Yahoo and others begin to take effect," Post said Monday in a research note.

STOCK PERFORMANCE: Google shares fell 10 percent during the quarter and are off 7 percent for the year so far. The stock recently fell $2.33 to $404.49 on the Nasdaq.

http://biz.yahoo.com/ap/060418/earns_preview_google.html?.v=1

[SeriousMoney]

Google: Right on Schedule
Tuesday April 18, 3:35 pm ET
By Tim Beyers, Motley Fool

I've come to believe that Google (Nasdaq: GOOG - News) is the next Microsoft (Nasdaq: MSFT - News). Here's why: Google is the best copycat in the business -- far better than Microsoft ever was.

Think about it: Almost nothing in Google's arsenal of tools is a new idea. It just takes old ideas and makes them better. Let's run down the list, shall we?

Product       Innovator   
 Blogger         Xanga   
 Gmail           Hotmail   
 Google Groups   Usenet   
 Google Talk     ICQ   
 Google Maps     Mapquest   
 AdWords         Overture

Now, how about Microsoft?

Product           Innovator   
 MS-DOS             CP/M   
 Windows            Mac OS   
 Office             Lotus Notes   
 Internet Explorer  Netscape Navigator

As of late last week, you could add Google Calendar to the list of copycat innovations now being brought to you by Sergey and Larry. Like the rest, this tool is very functional, with a clean design and huge potential upside. How much upside depends on the creativity of Google's engineers.

I'll get into that in a few minutes. First, let's look under the hood. Google Calendar, like Google Finance, offers users a very quick way to manage their schedules. Entering data is easy, too. For example, a function called "Quick Add" allows you to use natural language to enter an appointment. I tried it for booking a beer with a buddy of mine last night. All I entered was my friend's name, the location, and the time "at 7 p.m." Google Calendar then created the entry and placed it in the appropriate slot. Sweet.

Though this is hardly the first online calendaring tool -- it's been possible to publish Outlook calendars over the Web for years now -- this one harbors some interesting possibilities. At the top of the list: integration with other Google services -- Gmail for meeting invites, for example. Even more interesting, however, is the natural-language function tied to meeting location. It's hardly precise, but after I entered the town and state for the eatery we'd be at, Google Maps brought up several choices, including our intended destination. Again, sweet.

Future integrations could include posting live phone links in calendar records, thereby allowing users to dial meeting participants or event locations with one click, a la Skype. (Surely Google Talk could facilitate this, right?) And then there's the possibility of targeted ads. Let's say you travel a fair amount and your calendar includes flight arrangements and hotel bookings. Google could display Expedia pitches every time you enter an out-of-town meeting in your digital date book.

Here's the point: Google Calendar may look like a calendaring tool. The truth is that it's much more. It's another way for Google to tie together services into a portal, which offers more opportunity to collect valuable user data, and which means an even better advertising platform.

That's the white-shoe Madison Avenue crowd looking over your shoulder, Fool. They're wondering whether you're free for lunch.

http://biz.yahoo.com/fool/060418/114538893919.html?.v=2

[SeriousMoney]

Google, Sony And Da Sponsorship Code
Posted by John Battelle at 11:58 PM
April 16, 2006

When news of this broke a week or so ago, I thought "Well, it was about time Google started to play ball with the movie folks, the way Yahoo has for years." Sure, it's interesting that Google is finally jumping into the cross promotion pool - this ain't a big Adwords buy, after all - but we all expected this day to come. Then I got a call from Marissa Mayer at Google, on Friday, with promise of an embargoed story. Usually Marissa is calling folks like me when a major new product is launching, like Fusion, or Finance. But this time, it was not a product, it was a promotional alliance between Sony Pictures and Google.

Now, this doesn't strike me as big news, at least, not initially. Sure, Google and Sony are teaming up in a unique way, combining their brands to promote the Da Vinci Code. And sure, it's being done in a particularly "Googley" way - with puzzles and codes and a contest that will ultimately crown a grand prize winner just as the movie is coming out. But....let's consider this for a minute.

This marks Google's first major step into the world of pure co-branded promotion, at least here in the US (we saw the Nike soccer site just a few weeks ago as well, but that was, well, soccer. For movie obsessed Americans, it didn't have quite the same impact, and it didn't have the same profile that this one has, for more on that, keep reading). And while this seems pretty tame - Sony is paying Google for all that traffic, right? - the deal is in fact more complicated. Because Marissa assured me that no money is changing hands here. In other words, Google feels it is getting as much from this as Sony is. Why?

Well, because this is more than just a movie promotion. It's a Google products promotion as well. The puzzles and codes will drive people through Google's products - not just search, but Calendar, Mail, Talk, and - in particular - the personalized homepage. In fact, to even get started, you have to set up a Google account. Mayer told me, in no uncertain terms, that the strategic goals of this promotion for Google was to familiarize folks with Google's services beyond search.

It ain't a branding campaign, but it sure as hell is close. I have to say, among many other things, it's rather clever. The effect is a big box ad for the Da Vinci code on folks' personalized home page, yet it's been invited in via the context, so it doesn't feel intrusive. As for the pay off for Google, I'll write more about that in another post.

Regardless of how clever, however, this is marketing, plain and simple. And, to restate - this ain't your father's AdWords. The times, they are a changin'.

http://battellemedia.com/

[SeriousMoney]

Google's Corporate Makeover
Forbes.com, Dan Frommer, 04.18.06, 6:50 PM ET

Google, which wants to expand its fledgling enterprise line, is asking some of Silicon Valley's biggest names for their help. The search giant will announce Wednesday that it has struck partnerships with big-name business software vendors to integrate their offerings into Google's "Search Appliance."

The device, aimed at large businesses who want to sort through mounds of their own data using the same interface that Google has popularized for Internet searches, sells for $30,000. Now a new upgrade allows users to search data they've created using other firms' software, which will be displayed in a field called "OneBox." Initial partners include Oracle, Salesforce.com, Cognos and Cisco Systems.

Google's enterprise division is small, but "very profitable," says Dave Girouard, the group's general manager. Girouard says his group accounts for up to 2% of the company's overall revenue, which means it could generate some $28 million this quarter if Google meets analysts' predictions of $1.4 billion in total revenue.

Girouard says his unit has doubled its revenue in the last year. More than 3,000 customers already use Google's enterprise search tools for their corporate information, both on private, internal networks and on public Web sites.

Google's move to open up its enterprise offering to big software developers is parallel to moves the company has made with other products, like giving outsiders the ability to create "mash-ups" with their software and Google Maps. The company said it will also allow smaller players to create add-ons for the enterprise line. They're already showing off some examples, such as the ability to search and display someone's Microsoft Exchange contact information within the Google interface, and even inviting a co-worker to a meeting without leaving your Web browser.

"Search to me is really the next big move to get people access to all the information--not just the documents, but the data--in the enterprise context," says Robert Ashe, chief executive of Cognos, whose business software data will now be accessible through OneBox.

Google hopes its new partnerships, which were first reported Tuesday by Business 2.0, will help boost its share in the enterprise search and information access market which research firm Gartner estimates will hit almost $370 million worldwide this year.

Gartner analyst Whit Andrews estimates that Google accounted for between 10% and 20% of new search licenses sold last year, amid competition from business-software giants Microsoft, IBM and Oracle and smaller companies like Norway-based Fast. "But other vendors either cost a lot more money or don't have the Google brand," Andrews says, adding that Google's share of new license sales could grow to 40% by the end of 2007 if companies latch on to enterprise search.

http://www.forbes.com/intelligentinfrastructure/2006/04/18/google-enterprise-search_cx_df_0418google...

[SeriousMoney]

Google Blows the Doors Off
By Jonathan Berr
TheStreet.com Senior Writer
4/20/2006 5:36 PM EDT

Google (GOOG:Nasdaq) walloped first-quarter earnings estimates Thursday, sending its shares up 6%.

The Mountain View, Calif., search giant made $2.29 a share on a pro forma basis, excluding certain costs. Net revenue, excluding the fees that Google shares with its search ad partners, was $1.53 billion.

Analysts were expecting a profit of $1.98 a share on net revenue of $1.44 billion, according to Thomson Financial.

For the quarter ended March 31, Google made $592 million, or $1.95 a share, up from the year-ago $369 million, or $1.29 a share. Gross revenue rose 79% from a year ago and 17% sequentially, to $2.25 billion.

"We basically have good news across the board,'' CEO Eric Schmidt said on the company's postclose conference call with investors. "Europe is doing extremely well for us.

"It looks like to us that we are continuing to gain market share,'' Schmidt added.

Investors were duly impressed with the blowout performance, which came just a quarter after Google's first-ever earnings-related black eye. A steep shortfall reported Jan. 31 sent the stock into a tailspin from which it has yet to fully recover.

"True to form, they continued to grow and outgrow what the Street had been looking for,'' says Jeff Kampner, sector manager at Solaris Asset Management, which owns Google shares. "It looks like the margins held up nicely. That's the part I am surprised by.''

"Looks good, sequential revenue way better than initial Street estimates,'' says Mike Binger, a fund manager at Thrivent Financial, which owns Google shares. "Both Google and Yahoo! (YHOO:Nasdaq) are confirming search is still strong and growing fast. The big fear on Google was the expenses, and the EPS went a long way to lowering those anxities."

Google's blowout quarter came a day after Yahoo! surged 8% on the heels of its own solid report.

Investors had expected Google to struggle to control capital expenditures to fuel its explosive growth.

"This is just an incredibly powerful business model,'' says Larry Haverty of Gabelli Asset Management, which owns Google shares. "It's just a tremendous quarter.''

The company did offer one cautionary comment on coming quarters. "We expect that the growth rate in capital expenditures in 2006 will be substantially greater than the revenue growth rate for the year," Google said. "We expect the majority of investment to be focused on IT infrastructure including servers, networking equipment and data centers, as well as real estate and campus facilities."

"You should continue to expect compression in net and operating margins as we go forward and invest in the business," finance chief George Reyes said on the call, elaborating on the capital spending comments.

GAAP operating income for the first quarter of 2006 was $743 million, or 33% of revenue. This compares with GAAP operating income of $570 million, or 30% of revenue, in the fourth quarter of 2005. Non-GAAP operating income in the first quarter was $887 million, or 39% of revenue. This compares with non-GAAP operating income of $718 million, or 37% of revenue, in the fourth quarter.

Traffic acquisition costs, the portion of revenue shared with Google's partners, increased to $723 million in the first quarter. This compares with TAC of $629 million in the fourth quarter. TAC as a percentage of advertising revenue decreased to 32% in the first quarter from 33% in the fourth quarter.

Google-owned sites generated revenue of $1.30 billion, or 58% of total revenue. That's up 97% from last year and up 18% sequentially. Google's partner sites generated revenue, through AdSense programs, of $928 million, or 41% of total revenue. That's up 59% year over year and up 16% increase sequentially.

International revenue contributed 42% of total revenue, up from 38% in the fourth quarter of 2005 and 39% a year ago.

The news could snap Wall Street out of its recent funk over Google's stock.

In its first 16 months as a public company, the Mountain View, Calif., Internet search giant could do no wrong. Google shares doubled in 2004 off their initial public offering in August of that year, and then doubled again last year. The stock soared through the first half of January this year, touching $475 at one point.

But since then, Google's many fans have been in for a rougher ride. First, investors were shocked by the company's disappointing fourth-quarter earnings, posted Jan. 31. A series of embarrassing investor-communication gaffes followed. The stock tumbled as low as $331 last month before staging a recovery that has put Google stock flat for the year.

"Q2 and Q3 have slower revenue growth," Schmidt says, reiterating the company's long-standing comments about seasonality.

"We are working on greater transparency in what we do," the CEO says, adding that Google will continue not to give guidance.

In late trading Thursday, Google rose $25.59 to $440.59.

http://www.thestreet.com/markets/activetraderupdate/10280535.html