Google's Other Search Engine

I like to try out the following statement on people to gauge their reaction:  "Youtube is the most valuable media property ever created."  Some people laugh, others pause for a moment before starting to argue with me.  I do not think the statement is far wrong.  According to some measures, Youtube captures 20% of all web traffic daily.  And all of those eyeballs get served with a large helping of ads.  What do you think most young people find more exciting, Youtube or network television?

To my point, NPR ran a story today in which a teenage girl was interviewed.  Youtube is her main source for discovering new music.  She did not refer to Youtube as a "video website" but rather as a "search engine" for finding music.  Oh, and she never, ever pays for music.  Youtube is probably more valuable than the entire music industry right now for this reason, among others.  Anecdotal evidence, to be sure, but this isn't the first time I thought this about Youtube.  Why?  Because it is also my number one source for discovering and listening to music.

Compare this with Pandora and Spotify, darlings of internet radio, both of whom are struggling to make a profit because no one wants to pay for their services. 

And Youtube is not just music, of course.  Want to see an interview with Dean Martin from 1969?  A clip from the 1975 World Series?  Footage of an A-10 in combat over Afghanistan?  Where are you going to go?  And each day, the density of videos on Youtube increases.  Microsoft and other companies are trying to nibble into Google's main search product.  But is there any competitor for Youtube?  No, because the barrier to entry is growing with each video posted.  And it will keep growing...

The Other Social Network: Google+

I've made no secret about my like of Google as a company on this site.  Who else is at the cutting edge of search, driverless cars, and server technology?  And Youtube is a rather valuable property, given that 15-20% of daily internet traffic resides there.  And this isn't all the company is doing -- not by a long shot.  As an example, Google+, the company's relatively young effort to get back into social networking is gaining traction rapidly.  An article this morning in Wired notes that Google+'s growth rate mirrors that of Facebook in its early days. 

http://www.wired.com/business/2012/12/google-grows-like-facebook/

Yes, Google has had some missteps and may not have the respect for privacy that we would like (although, they are not alone among internet companies in this).  When all is said and done, a long-term investment in Google seems like a really good idea to me.  I've already put my money where my mouth is on this one.

A Crack in My Love of Google

I regularly tout Google as the long-term winner of our current tech battleground.  There is its search dominance, its ownership of Youtube (one of the most valuable media properties ever created in my opinion), and Android, just to name a few assets.  Not to mention that it's pushing the envelope in server design and snapping up small tech outfits, one of which might turn out to be a goliath.  Yet, there are some cracks in the facade.  Google has shown something of  a disregard for privacy rights and there are comments like these from programmers, which worry me:

"Google does have an office in Manhattan. You should definitely apply there - I don't think it's an interesting company to work for anymore (and their recruiters are second only to Facebook's in how pathetically desperate they seem when they contact me), but the interview process is really fun."

See more of this thread at http://developers.slashdot.org/comments.pl?sid=2357190&cid=36936764

Hmmm... anecdotal but troubling if programmers no longer find Google interesting. 

My Facebook Prediction and the Speed of Change

On May 23, 2011, I predicted that Facebook would lose half of its value within 5 years due to loss of users: http://limbinvest.blogspot.com/2011/05/facebook-5-years-50.html .  Arguably, the 50% loss has already occurred but I don't raise the issue to take credit (I fully expect Facebook to lose more value over time), but rather to consider a point:  the world may be moving much faster than my previous conceptions of it would permit.  Another case in point:  one of my first posts predicted that Google would acquire Motorola Mobility within 5 years.  That prediction proved correct but took 5 months.  These are anecdotes to be sure, but I'm now examining my assumptions about the speed of change and the volatility of the world and its markets. 

Google and Motorola Mobility: Leaks?

After taking a very brief time to celebrate being right on my call that Google would buy Motorola Mobility (http://limbinvest.blogspot.com/2011/05/google-will-acquire-motorola-mobility.html), I began to think about recent events.  Motorola Mobility was inexplicably going up last week in the midst of the market's crash.  I thought nothing of it at the time, other than to tell myself that perhaps others were finally recognizing the value I had seen, even in the midst of chaos.  Now, however, the rise does seem curious.  I am not the only one to wonder if, perhaps, some folks knew about the acquisition in advance and acted on it:

http://blogs.wsj.com/deals/2011/08/15/was-there-advance-word-of-google-motorola-deal/?mod=msn_money_ticker

Google (Goog) and Motorola Mobility (MMI): I Was Right

I'm always wary of the dangers of ego but I told you all about this one back in May:  Google will buy Motorola Mobility.  Only, I predicted a five year time horizon, not five months:

http://limbinvest.blogspot.com/2011/05/google-will-acquire-motorola-mobility.html

It's good to be right about something this big but you're only as good as your last pick, so I'm going back to my studies...  

Google Revisited: I Sold

Like anyone else, I like to point out when I'm right (unlike many, I'll also point out when I'm wrong).  Here's what I said in a recent post about whether I should sell Google when it spiked to over $600/share:

I bought Google at $537 per share (after in an earlier life buying it at $247 and selling at $320 -- there is perhaps another lesson there).  As some of you may have noticed, Google has spiked dramatically to over $600 per share after reporting earnings.  I do believe that it's worth much more than $600 ultimately but it's tough not to sell it after the recent upswing because I think the world generally is in for more negative economic news which will once again depress Google. 

The bolded language has been validated.  I sold while Google was still at $615.  It's now at $547.  One for the win column but I am the last person to beat my chest.  Back to the desk...

Some Strange Things About Search

This is not an investment idea per se but does bear on the topic.  I've gotten curious about how one would check how often a particular search term is used by folks using Google and Yahoo.  It seems that the quick way of finding this out is to use Google Trends and Yahoo Buzz. Both of these services also list the "top" searches for a given day.  There is something puzzling about the results, however:  there is almost no overlap between the most popular searches reported by Google and Yahoo.  Now, I understand that the companies may calculate search numbers differently but no overlap whatsoever seems to me very odd.  I'm going to look into this further and set up a separate blog to track and explain this.

To Sell Google or Not to Sell Google, That is the Question

I bought Google at $537 per share (after in an earlier life buying it at $247 and selling at $320 -- there is perhaps another lesson there).  As some of you may have noticed, Google has spiked dramatically to over $600 per share after reporting earnings.  I do believe that it's worth much more than $600 ultimately but it's tough not to sell it after the recent upswing because I think the world generally is in for more negative economic news which will once again depress Google.  I'll think on this some more but why do I think Google is worth much more?  A host of reasons but compare it to Microsoft, which is arguably a proxy for similar growth.  Google began life trading at less than $100 per share.  It now trades for 6x that.  I dare say that Microsoft is now trading at far more than 6x its initial offering price.  Yes, I know, there are differences but rough measures in these instances are useful, I think.  Also, new computers using Google Chrome are selling quite well.  One more step toward the browser as operating system, the "dumb box" computer accessing a smart cloud, and Google eclipse of Microsoft.

Google Will Acquire Motorola Mobility

Greetings to all. Let's get this blog started with a bold prediction which, frankly, is this blog's business. Google will ultimately buy/acquire Motorola Mobility. Smart phones are going to be too important to the world going forward for Google to feel comfortable allowing third-party manufacturers to handle development. Google already has a close relationship with Motorola Mobility (MMI), having developed the Droid together. Also, Motorola Mobility's spin off from the former Motorola reflects, I believe, its own suspicion that this deal could ultimately happen. I know what you're thinking: if Google buys Motorola Mobility, it will alienate other smart phone makers using the Android platform. True, but that will ultimately not prove to be enough of a barrier to this deal. Time frame: 5 years.