Microsoft's Bing Draws Pre-Launch Kudos

Microsoft's Bing Draws Pre-Launch Kudos
6/2/2009

Can Bing boost Microsoft's market share against Google and Yahoo? After seeing the updated search engine in action, Barron's thinks it very well may.

06/03 Pre Market: Eurozone GDP

06/03 Pre Market: Eurozone GDP
New York Financial Press
Jun. 02, 2009. 10:00 PM EST

Google profit beats expectations

Google profit beats expectations

SAN FRANCISCO/NEW YORK (Reuters) - Google's quarterly profit topped expectations, helped by cost controls, but Chief Executive Eric Schmidt said the economic environment remains tough with Internet users still searching but buying less.
Shares of the No. 1 U.S. Internet search company initially rose 5 percent on the stronger-than-expected results, but then erased gains to trade flat after hours.
"We're still basically in uncharted territory," Schmidt said on a conference call. "Google is absolutely feeling the impact. Users are still searching but they're buying less. Ultimately, what that really means is the ads are converting less."
Compared to other Internet and media companies that depend on advertising revenue, Google has been extremely resilient to the economic downturn, though its revenue growth has slowed sharply from the heady 50 percent rates it used to enjoy.
Google reported first-quarter revenue of $5.51 billion, up 6 percent from the year-ago quarter but down 3 percent from the 2008 fourth quarter -- its first ever sequential decline. The figure was in line with average Wall Street expectations.

YouTube Is Doomed (GOOG)

YouTube Is Doomed (GOOG)
(Source Sillicon Alley and Business Insider)

YouTube, that incandescent tower of video Babel; monument to the sloughed-off detritus of our exponentially-exploding digital culture; a Technicolor cataract of skateboarding dogs, lip-synching college students, political punditry, and porn; has reached the zenith of its meteoric rise; and Icarus-like, wings melting; is spiraling back to earth. Despite massive growth, ubiquitous global brand awareness, presidential endorsement, and the world’s greatest repository of illegally-pirated video content, Google’s massive video folly is on life-support, and the prognosis is grave.
Believers would have us think that Google (GOOG) will sustain YouTube, indefinitely if necessary. Proponents of online advertising argue that increased understanding of the medium will lead to more advertising dollars at better CPMs, lifting all boats in a sea of monetization. In the short term, however, neither celebrity presidents, a rabidly growing customer base, nor a brand which has in three short years injected itself into the global cultural lexicon can forestall the inevitable: YouTube is soaring towards the future like a pigeon towards a plate glass window.

The problem lies with the bean-counters. According to a report by Credit Suisse, YouTube is on track to lose roughly $470 million in 2009. No matter Google’s $116 billion market cap: a half-billion dollar loss on a single property, even one as large as YouTube, is a bitter pill to swallow. Even Eric Schmidt, talking to the New York Times about the YouTube acquisition, was quick to say that, going forward, Google would “be more careful with potential large expense streams, which are of uncertain return.”

Credit Suisse estimates YouTube will manage to rake in about $240 million in ad revenue in 2009, against operating costs of roughly $711 million, leading to a shortfall of just over $470 million. This half-billion dollar loss comes after more than a year of feverish experimentation in various forms of advertising, cross-product embedding, licensing and partnership deals. YouTube is adamant that ultimately they’ll find an advertising solution that will enable the ungainly behemoth to reach profitability. Looking at the math, it doesn’t seem likely.
The economics are hard to overcome. Assuming YouTube delivers the 75 billion streams that Credit Suisse projects for 2009, and assuming YouTube manages to slot an ad for every stream (which is practically speaking, impossible, given the nature of much of their content), YouTube would have to achieve a $9.48 CPM for every video impression shown. Presumably, the videos YouTube is already monetizing represent the best content available, with diminishing returns as they reach deeper and deeper into a repository rife with copyright violation, the indecent, the uninteresting, and the unwatchable. Hulu claims to be charging a $30 CPM, of which roughly 70% goes to the copyright holder. Averages for other proprietary content hover around the $10 CPM mark. CPMs for user-generated content, assuming you can attract the advertisers, tend to be measured in fractions of a dollar. Read Article...
http://www.businessinsider.com/is-youtube-doomed-2009-4

Google delivers good-looking 4Q in ugly recession

Google delivers good-looking 4Q in ugly recession

Google 4Q results emerge as bright spot amid gloom, but investors still worried

SAN FRANCISCO (AP) -- Google Inc.'s fourth quarter wasn't picture perfect, but the results looked good in an ugly recession.
Although Google suffered its first-ever decline in quarterly profit because of a $1.1 billion accounting charge, the Internet search leader fared far better than its peers and proved it has the discipline to curb its free-spending ways in tough times.
Even as the Google tightened its belt, its fourth-quarter revenue climbed 18 percent to $5.7 billion. It's the first time since Google went public in 2004 that its quarterly revenue growth has been less than 30 percent, but it was still a double-digit increase in a backpedaling economy.
"It was a pretty impressive performance in this kind of downturn," said Stanford Group analyst Clayton Moran.
Google's showing contrasted sharply against the performance of its biggest rival, Microsoft Corp., during the same period. Microsoft not only missed analyst forecasts, but telegraphed its diminishing expectations by disclosing plans to lay off about 5,000 workers during the next 18 months.

Google CEO Eric Schmidt To Step Down?

Google CEO Eric Schmidt To Step Down?

While Google's market capitalization tanks and the company launches its first wave of cost-cutting, CEO Eric Schmidt is devoting much of his public-speaking time to pressing for green-energy stimulus plans and discussing the auto industry bailout. Technology, Media & Telecom Analyst speculates that this is because he is getting ready to take a position in the Obama Administration. We have no inside knowledge here. We would, however, note that, having grown Google to $20 billion in revenue over seven years, Eric has certainly earned the right to take a break. We would also note that there are many other reasons why this might be a good time to exit stage left (although a year ago, when the stock was at $700, would have been a much better time)

The text above is from Sillicom Alley Insider's Newsletter.
The link is to Henry Blodget's page on the Sillicon Alley Insiders website | November 25, 2008 5:17 AM. It still seems to be a rumor, but on the Internrt it's already appearing on rather important sites.