Friday 19 October 2012

Google. Dramatic Share Price Collapse today caused by leaked Q3 numbers. Mayhem.

The early mistaken release of Q3 "draft numbers" (say Google) today before markets closed, has led to a major drop in their share price and a major spotlight on their image.

From the chart above, see if you can spot when the figures were released? Look like a share price tank to you? Does to me.

A drop of 10%..... but there was so much panic, the shares were suspended from trading. In fact it was mayhem and has now made the news internationally causing all investors to consider will the share tank further? Likely now boys.

Total Quarter revenues were 11.3 billion usd giving earnings of 2.18 billion usd.  Most of us would be well pleased. All of us in fact.

The problem was, they were below expectations of 11.9 billion and 2.5 billion and expectations are already "built in" to the share price (the price of shares reflects the future potential of the company, not the current). So when expectations aren't met, shares fall - unless some major explanation is given.

In this case, the unexpected release of numbers meant no explanation was available or ready, hence the mayhem. 

Click rates on search ads were down too, by 15% and this is very much core business with one major investor called "shocking". It's now built up into a story that most searches are taking place on mobile using Apps, not Google, further enhancing the fear that Google is losing steam. The reality is, that it's probably because of competition from the likes of Facebook.

Costs rose dramatically too (up a whopping 71%!) 11.4 billion usd largely due to their May acquisition of Motorola Mobility and the 20,000 employees that went with it (nevermind the 12.5 billion in cash it paid for it). Motorola losses are huge, contributing to a bad Google picture. 

So overall there's probably good explanations for all of it and with earnings of over 2 billion a quarter, that's about as good a company as you can get.

However, the publicity now, which is bringing story after story but bizarre analysis, is going to be costly. A company like Google, so much the poster-boy of this new world, when it gets bad press, it reminds us all of the 2000 bubble. Maybe the Internet isn't all it's cracked up to be? Can't you just hear it.

It's actually a headline in tonight's Irish news.

And the donkeys of Wall Street will look with glee because they get a commission on a sale just as much as a buy. Shakes up the market, brings in money. The shares have recovered slightly after hours.

So hold onto your hat.
This is going to hurt

Thursday 18 October 2012

Obama Romney Town Hall. Social Media results in and they're shocking! Shockingly quiet.


Obama Romney Town Hall debate last night didn't have the same Social Media impact that the first one did. Maybe because Obama seemed like a new man and it was all a bit "back to normal".

I stayed up until 4am watching it and in my book, Obama was well back on form and has put his campaign back on track. And in my view, this was the one he needed. The last debate will be too late to have an impact and traditionally, voters have pretty much decided by then. The only reason it comes into play if there's a screw up - otherwise, it desn't matter really.

Romney's reference to "binders full of women" got a big spike on Twitter and became Google's number 3 trending topic after "who is winning" and "live debate". Search for the words jumped 425%.

7.2m tweets were sent compared to 10.3m in the first debate.

The economy was the big issue with 28% of tweets, taxes 17%, foreign policy 16%, energy 13% and immigration 8%. 109,000 Tweets per minute at the peak which was when Obama had a go at Romney with "you're the last person to get tough on China".

Romney peaked when he said he'd get America back to a balanced budget.

It seems to me that the Social Media reaction was pretty stable, not too exciting and reasonable. Probably just that folks were "interested" rather than excited with a TV audience of circa 60 million.

In my view, that all points to Obama being back with a steady hand on the tiller. He didn't lose and probably just held his ground.

So a good night for him.

Wednesday 17 October 2012

Microsoft launch XBox Music. Too little, too late. Again.

Microsoft, who are famed for doing nothing really, have just unveiled their X Box music service, called.....XBox Music!

It's a competitor to Itunes with music streaming (30 milion tracks), downloading and indeed, Radio. 

It's free if you'll tolerate the Ads or it's a subscription service under 10 usd a month which allows you unlimited steaming which at the moment, is designed for Windows 8 only (so too bad if you're on Android or Mac) but that's all to come shortly. Equally too, a cloud based locker is in the pipeline for storage (and stats during the week on cloud services show it's really being adopted).

The purchase of songs operates exactly like Amazon or Itunes and it's ideally targeted at mobile devices - notably The Surface tablet which has caused such controversy.

Although they did previously have a music service called Zune, it was discontinued as it wasn't competing. 

I'm not a fan at all of Steve Ballmer CEO or of Microsoft.
They seem to do everything poorly and get to everything late without any innovation but rather, a "me too" service.

By putting commercial people in charge (Ballmer was a salesman whereas Gates was a techy) rather than techies, they lost their way. Not a mistake that Apple made with Jobs at the helm.

So here too is another example of a music service that's late and rolled out in a limited way - not fully thought through.

It seems to me that Microsoft needs a shake up if it's ever going to reachieve its glory days as world-dominant. Today, Apples's Iphone business alone, is bigger than Microsoft.

This launch won't make the slightest change in that.

Tuesday 16 October 2012

New York Times launch digital editions for China + Brazil. Newspapers are

Given all the doom and gloom about print publishing in the digital age in times gone past, in fact the Internet has turned into an opportunity for newspapers as I've said many times before (here being one

Now, The New York Times has just launched a new digital edition in Portuguese which is to target Brazil. It includes translated stories as well as contributions from local reporters and images. About 40 articles a day with a focus on news, business and culture. Original photography and local graphics will come later they say.

Earlier this year, they tested a Chinese language version of the paper which is expected to be fully available before year end. Interesting too, that you'll see a screenshot at the top of this blog and who is the advertiser in the top ear spaces? Cartier.

Whilst the US edition has a paywall (subscription) which by all reports has been a great success (I'm hearing the number of subscribers has now exceeded the number of traditional readers - even if that's wrong, it's clearly an upward trend), these editions will remain free for now.

So newspaper publishing online is becoming a fast growing business and these launches, show optimism. In time, newspapers will be 90% focused on their online papers with the printed versions taking a back stage - no harm there at all.

Irish newspapers are also showing signs of getting deeply involved in the digital space too, largely through video, bringing greater strengths to their groups. They have the credible brands to deliver news and if readers want that online, rather than printed, then why not give it to them? It's simply a matter of a different format - nothing to be scared of.

The difficulty with news online is the "trust" factor - you don't know what you're reading nor by whom - whereas traditional brands have got that trust. And so if you read a brand like The New York Times, The Irish Times or The Irish Independent online, you know you can trust it just as much as the printed version. 

You'd expect serious investment to follow in newspapers online as these initiatives grow. They're actually building value with the possibility of capital gain in their online presence. In other words, someone will want to buy them. In Ireland, when we question why well-known investors get involved in investing in newspapers now, don't. Stop and think.

And when you think of what we were saying some years back, about the inevitable decline of publishing, how mad is that now?

Instead it's an example as to how traditional business, once it gets its head around digital, can get into the space in a good way. Imagine the market opportunity in China for The New York Times? Wow. And imagine if they tried to do it the old way with paper producers, printing houses, vans, retailers, etc.

All they have to do now, is to do it online with an emphasis on design and they'll flourish. Content is and always will be, king.

Monday 15 October 2012

Search market share results in from ComScore. Marissa Mayer's Yahoo! continues to fall......

Search Engine market share numbers have just been released by the reliable ComScore and they're not good for Yahoo! Again.

Yahoo! has about 12% of the market but the once world dominant brand, is losing market share month-on-month. I'm personally not surprised because it's a pretty awful search engine giving poor, non-relevant results.

The much heralded Marissa Mayer appointed as multi-million CEO (third in a year!), has yet to announce any strategic plans for Yahoo!. She came over from Google and was their employee number 20 and her appointment caused a drop in share price same day (!). 

But one would think she should start with the product for as long as it remains so poor, it will continue to be used less.

Google is gaining from Yahoo's loses and now has a share of nearly 67% with 'Ask', a little known search player continuing to gain at about 3.5%. Bing (owned by Microsoft) is staying put at around 16%. So even Bing has overtaken Yahho's 12%.

Searches are also decreasing in a small way with over 16 billion in September, down about 4% on August. 

But there's no doubt the focus continues on Marissa Mayer's Yahoo given such a large shout and dance was made on her appointment earlier this year. Their continuing decline in the face of Google growth is enhancing a view that Yahoo is just not rescueable.

Equally too, users constantly find the interface annoying and the product annoyingly bad. If this continues, Yahoo will cease, plain and simple, because they have already lost confidence of the market. 

The hope was that Mayer would restore it. 
Not with numbers like this.