Google Joins the $1,000 Per Share Club

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Oct. 18 (Bloomberg) -- Telsey Advisory Group's Tom Forte, Mashable's Seth Fiegerman and Bloomberg's Cory Johnson discuss the outlook for Google with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)



The story for google's results for the third quarter was, they made up in volume what they lost in price.

There are two challenges over the next 12 months.

One is this continued transition to the mobile internet and the pressure that is putting on pricing.

Motorola is generating a billion dollars in losses each year.

Are they making the right decision by trying to go into the hardware devices?

The question is, how much advertising will they invest in motorola and what kind of pressure will that put on our bottom line?

They will make up in volume what they are losing in price.

What do you think, seth?

If anyone is well in mobile right now, it is google.

The most popular apps, some of them are google.

What they have yet to show is that we can make ad revenue on mobile comparable to what it is on desktops.

Can ever really do that -- it ever really do that?

Will it ever approach -- it might not.

The ad campaign might help it get there.

Two applications like youtube and google apps, they can wrap up.

He has been critical because of the cost and marketing expenses.

Is it critical for this company that they have their own device?

It is good for them to have a flagship device.

We are a bit too early there.

They are really just kicking into the marketing now.

Is it crazy that google could look at blackberry and find some value in those patents and integrate that into the motorola business they bought a couple years ago?

That's not crazy.

Anyone interested in blackberry would be interested in intellectual property.

Motorola has a bit of a structural challenge.

Let's say they come out with something really cool.

Their android partners will one the same technology.

There is no doubt they're doing very well in mobile.

There are certain instances where if you're in midtown, looking for an italian restaurant, the mobile value on that ad is more valuable than a desktop laptop.

This stock is flying here.

What do you think about valuation?

Can it keep up this momentum?

The valuation of google is low compared to its peers in the technology world.

There are issues when you are talking about click growth.

The revenue per click volume is a negative trend.

That is falling -- that falling has been exhilarating.

The number is starting to get worse the last two quarters.

That is something people will keep an eye on.

There was a belief going into this quarter that as google moved to a new thing they are collated their enhanced program of advertising -- calling their enhanced program of advertising, including mobile data, as they shift into that program there could be a hiccup.

That hiccup did not happen.

People were pleasantly surprised with the number that came out last night, but there are long- term issues to watch.

While google has positioned itself to mobile, or is falling revenue per ad.

I like to call adam crazy.

Go right ahead.

You have got to look at what a crummy deal this motorola thing has turned out to be.

While this moto-x phone, some people like it, it is not hitting samsung or apple-like numbers.

They paid big dollars for this business.

It amounted to $1 billion in losses over this past year.

When asked about what would fix the motorola business, they did not give quantitative answers.

Tom, maybe you can speak to the earnings.

For the past year and this year, earnings growth is 10%, 11%. it is double that.

It assumes in the future they will figure out how to make the hardware more profitable?

There is an expectation.

Investors talk about losses being contained in motorola.

My concern is that the losses accelerate.

Improvement would be to this notion that the enhanced ad campaign would improve that cost per click overtime, and the pricing they're getting on that.

There's going to be multi-year pressure on the pricing.

You look at the tech space, and you have major players.

If you are going to have to give us a crystal ball, who is going to make it in this space over the course of the next five years?

Who will be a big driver of revenue growth?

Google is well-positioned.

They have the perception that they are the innovator in this space.

Even apart from mobile, when we see what they are looking to do -- for now, it is sort of in

This text has been automatically generated. It may not be 100% accurate.


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