Google shares sink after Q4 earnings miss Wall Street expectations - Page 2

Don't start gloating yet, folks. Apple will drop 20% if it is one unit short of 42 million iPhones, 18 million iPads and 7 million Macs. I know this because Huberty, Munster and Wu have told me so...

Google really does have an incredible commitment to the open-source community, and I'd wager that very few here have any idea what it entails. If you're curious, Google has a blogspot where much of it is discussed.
http://google-opensource.blogspot.com/

One of the newest contributions is posted over at ArsTechnica, where they built an HTML5 "photo-booth" with Google open-source code.

Now if I owned Google stock, I might question the number of open-source projects they have in the pipe. I realize Google is a non-traditional business, but I really don't understand how they hope to benefit by giving away so much IP. Surely their must be a more direct way to monetize their developments, assuming that's what they're doing. I'm certain open-source proponents love all this free-to-use IP. Stockholders maybe not so much.

Ugh, good morning world. Now I see what cameronj was talking about. Never mind that Google actually did plummet three months ago alongside Apple, he was talking about their quarterly earnings. Makes sense now, though my confusion was understandable.

By the way, if this happens again? Ugh.

If only this were the pep talk you give yourself in the mirror every morning, we'd all be in a better place.


Again- are you sure you're not looking in a mirror? 11 year olds always have to have the last word. You'll prove this point.

Hey now. You can make fun of me all you want, just don't make fun of each other. That's not kosher with me or the rules.

Had I known...

The unit that makes phones is separate from the unit that makes stuff for Apple. With Google, however, it's all the same. Apple is lining a competitor's pockets with cash. Apple should get away from Google's services altogether.

GOOG is way overpriced. Here is why:

AAPL net income in the latest quarter was $6.6B and it represented a 42.6% growth year-over-year.

GOOG posted about $2.7B net income and according to this latest quarter, it is growing now at 6.7% year-over-year.

The share price of a company is mainly determined by two factors: income and growth outlook. People usually think that a company that is not growing (or slowly growing) should have a market capitalization of about 10 times its income. It means that investors expect it to be able to earn its own price back in about 10 years of operation. This is again only the case of a NON-growth stock. The ratio of market capitalization and earnings is called P/E and so it should be around 10 in a poor economical climate (like today) for a company with no (or little) growth.
(The fair P/E depends on other factors as well, like dividend, etc., but I have simplified it for now since neither company pays dividend.)

Of course if the company is growing, investors will calculate that trend into the fair share price, which will result in higher P/E. That means that investors are willing to price the stock higher than a non-growing stock because the expect the earnings to increase soon. Thus companies with greater than 10 P/E tend to be growing and P/E lower than 10 tend to be shrinking.

Now GOOG has a very high 19.8 P/E even after todays drop, which means that the market expects it to grow very rapidly. However it's 6.7% growth rate would hardly justify a P/E of 11.

In the same time AAPL has a P/E of 15.3, which might be justified because of its high growth rate.

In the end the situation is like this. We have a company (GOOG) that is growing much slower than AAPL, still the investors are pricing it at a high premium over AAPL.
If actually GOOG was treated by the same standards by investors as AAPL, its P/E should be around 11. And that would mean that its fair market capitalization is around $120B, which would require a drop of almost 40% in its share price immediately (on top of today's drop).

Edit: Just realized that GOOG's P/E is actually around 30 at the moment. I must have been using some old numbers before. AAPL's P/E was correct. Anyway, my argument is even more valid this way. GOOG is even more overvalued than I thought.

You conveniently left out the profitability piece Slappy. What good is market share or activations if it doesn't result in profits? Answer: Nothing. By 2016, paid download revenue for apps is projected at $2.86 billion for the iPhone, with only $1.5 Billion for Android, despite its wider base and activations. Reason for that is Android whores out the lower price point and most of those activations are dummy phones. As the Android platform becomes more fragmented, updates unavailable, and profitability at half that of iOS, you will continue to see the developers vie for iOS as the platform of choice.

In addition, due to the stability, Apple iOS is also taking a hard lead in enterprise activation. This will determine who survives long term, and Android has not gotten off to a good start due to the perception among the corporate world of being a risky and unsecured platform. Android even scored below that of RIM, which is saying quite a bit.

http://www.appleinsider.com/articles...st_risky_.html

1. They benefit by harming their competitors. Give away a half-assed version of something for which a competitor charges money. Unleash a horde of lilliputian open-source developers to further dilute the value of the product.

2. They benefit by creating a fig leaf of open-source benevolence to cover their filthy data-mining genitalia.

Thats a narrow minded Apple fan point of view. In time Android will have 99% market share. Google will profit. Hardware makers will profit. Those that do not will drop off. The company that produces Android hardware that are successful will continue to grow as they grab customers from failed hardware makers. It's Windows all over again. Apple will gouge their current base with over the top prices to survive. In the meantime cheaper and superior models from competitors will benefit the buyers smart enough to avoid the Apple Tax.

Oh, we understand Google alright but what part of "when it benefit them" you don't understand?

lmao at Wall Street.

10 BLN in revenue in the 4th qtr and the street still compains.
I feel this disrespect from the markets is still from the hurt they all took in the .com bust.

google is no pets.com

The part where releasing all this open-source code benefits them in a business sense.

You seem to miss post 50.

No I didn't miss his opinion. Apparently you consider it facts tho?

My fact about Google is much worse.

Opinions mistaken as fact happens a lot here.

It's already beyond being opinion.

Yes, some people here have disturbingly incorporated it into their belief systems. Doesn't mean there's any more truth to it than a 5-year-old's belief in Santa Claus.

Said the guy who has something about Apple disturbingly incorporated into his mind. How about enlighten us how Google is any different than Apple when promoting standard? Is WebM for a greater good? Is Flash open?

Numbers are numbers based on current data. You've given nothing but conjecture and ill informed opinion.

Have to say I'm disappointed in your response Slappy. Thought you could do better.

You want to talk about Windows, then let me give you some info. Windows may have the top market share but the hardware manufacturers aren't making a dime off of PCs. IBM saw the writing on the wall and sold their PC business to Lenovo because they saw PCs turning into a commodity. Microsoft is the only company in the Windows PC business making money. Everyone else isn't making anything. Dell, HP and the other bellwethers in the Windows PC space don't see PCs as a profit engine. The server businesses and other enterprise product lines are what they see as profit engines.

But with Windows, at least Microsoft is making money. Nowhere in your pie-in-the-sky projections is there an explanation of: (a) How Android will have 99% market share; (b) How you expect Google to profit from an OS that they give away for free; and (c) How hardware makers will profit.

And as for the "Apple Tax" and price-gouging, why is it that Motorola set the entry level Xoom price at $800? And also, the typical price that customers pay for a smartphone with a 2-year deal is $200. Android phones do come with BOGO offers but I'd wager that the top Android devices, e.g. SGII sell for around $200 apiece with a 2-year contract.

You seem to be so confident in your projections that Apple will fail. Why don't you short Apple stock and make some money? You can be known as the person who saw through all the hype surrounding Apple.

Well, WebM is actually open. The issue being is whether it was patent encumbered as I recall. So, yes, it would be for the greater good. As opposed to say iBooks which from I've read wraps the open ePub3 format in a proprietary Apple layer.

No, Flash isn't open. But since it's not Google, I don't know how it's relevant to the conversation. Is it because Google openly allows its use in Android and Chrome. Darned Google, letting users have a choice whether they want to have Flash on their device. Goodness that's evil!

But I actually didn't state that Google (or Adobe for that matter) was some saint when it came to pushing open standards. Just disputing the BS notion that Apple is some sort of saint in that area. They pushed web apps in the early release of the iPhone because the App Store and SDK weren't ready for prime time. Notice how since the App Store went live there isn't much crowing about web apps? Apple pushes HTML5 as a Flash alternative because it hurts Adobe.

Slappy has upped his Android prediction from 98% to 99%. That's an expert analysis.

If Google is not making huge strides in profitability given the rise Android has had in the past year, why would it suddenly start making profit if it's market share increases further? If you can't make profit at 40% of the market, you can't make it at 99%. Giving the OS away makes Google NOTHING, and based on their quarterly reports, their earnings per click are down. That directly impacts their bottom line, not their share of the mobile market.

And let's face it, the iPhone isn't going to dwindle down to some fraction of 1 or 2% of the smartphone market. Apple still isn't sold on all the carriers that Android phones are, and Android can't force the iPhone below 30% of market share now. If more and more carriers begin to offer the iPhone, it's only going to have a higher and higher share worldwide. With Apple making the lion's share of mobile profits with their smaller market share, increased share will only result in even higher profits.

Again...why do you all respond to Slapppy?

He is either an Android fanatic Poe...or an idiot.

Guessing Poe. Can't be as ignorant as demonstrated. All the quotes and replies are killing the point of my ignore filter.

You have to love how Gatorguy pretends not to know why Google gives stuff away for free, then insists that it isn't to cut the legs out from under competitors. Well, yes, that's exactly why they do it, it's a key part of the business model: make a market unprofitable to sell anything in, then move in and take it over to sell ads. Does anyone really think this isn't why they do it? This is pretty obvious stuff. Googles success is based on destruction.

This logic reminds me of the SNL First Change Bank commercial. "you give us $10, and we'll give you two fives, or a five and five ones. We're here to meet your personal change needs. How do we make money? Volume!"

Just to expand on the Google as a destructive force theme, when I think back to a time that Microsoft actually mattered, as much as I disliked them for their underhanded (sometimes even illegal) business tactics, for the crappy operating systems they turned out, and for their, we're going to take over the world attitude, I never thought of them as a destructive force in the industry. Sure, I felt that they often held things back, that they weren't terribly creative, that they showed a little too much zeal in their drive to crush the competition, at least until the whole IE is integrated into Windows thing, I never saw them as a company that tried to succeed primarily by destroying the playing field.

With Google, it's hard to see little else in them. It's what they do. It's what they know how to do. Not that there aren't some creative people working at Google (and the guys who built the Death Star were doing some creative stuff too), there are (although, you have to wonder how much dissimulation they have to engage in to feel comfortable there). It's just that all their creative energies are being focused on how to destroy industries so Google can move in and pick up the ad dollars from the waste land.

After camping the Yahoo AAPL finance forums for a week its a breath of fresh air to see Slappy. :-) I just bought 1 JULY option call for google today. Paid 3500$ for 100 shares exposure. Hope it gets back up. Go google (Slappy would be proud)

You guys would be amaze to see the amount of threads that attempts to manipulated the stock price by bringing up idiotic arguments. I got my position on Apple for the earnings with MAR and APR calls and I just bough one FEB call just before the market close. I have 10 lots "in the money" which means the equivalent of 1000 shares of Apple. I will buy cheap "out of the money" weekly puts on tuesday in case AAPL tanks after earning. Those will be lost if the stock rally but its always good to get insurance.

Booyah!

It's a 'breath of fresh air' to see blatant lies based on complete nonsense that can't possibly ever be true?

Trust me, the yahoo forums is much worst. Its camp by an army of evil Slappy's that tries to manipulated the stock or spam the same arguments every day and post links to sites on "how to make money" if you pay for our advice. There is also a "guild' of traders who are more gamblers than investors.

You have to sort out the good post in that mess. The forum badly needs a moderator.