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Google down a boardmember, but up in earnings?

The news that Arthur Levinson, chairman of biotech giant Genentech, has resigned from Google, Inc. (NASDAQ: GOOG)'s board comes just days before search juggernaut is set to report earnings on Thursday, after the close of trading.

With Google shares trading at 12 month highs -- about $523 -- investors may not see much headroom left unless the search giant really blows out the quarter. Nevertheless, many Wall Street analysts are bullish on Google and are raising their price targets accordingly.

Continue reading Google down a boardmember, but up in earnings?

Google's hungry, looking for a new company every month

Some people join wine-of-the-month clubs. There are plenty of other programs out there, too, where your credit card is hit every month, and your purchase is sent to you directly. If only such programs were available for Google (NASDAQ: GOOG). . . .

The company's CEO, Eric Schmidt, said Wednesday that Google plans to pick up a small company a month as a way to get its acquisition head back in the game. With the worst of the recession behind us, Google believes, this is a great way to get moving.

Continue reading Google's hungry, looking for a new company every month

Five years after IPO, Google is still a renegade

Yesterday, Google Inc. (NASDAQ: GOOG) had its fifth birthday as a public company. Google, which has done nothing short of astounding in the last half-decade in terms of turning much of the advertising world upside-down, has defied many of the critics who probably never believed it would become as strong as it has in such a short time. That's because that kind of thinking was linear, and Google operated on an exponential scale using data and formulas to make things works quickly and efficiently, not haphazard management belief and inefficient decision making.

And so here we are. After the IPO that Google made accessible to anyone in a dutch auction back in August of 2004, the company's shares have made it all the way to $700 and above from their initial IPO price of $85, and closed yesterday at just over $443 per share after dipping almost down to $250 last December. Google has risen during the most intense part of a recession that's just now being acknowledged as being close to over.

Continue reading Five years after IPO, Google is still a renegade

Google nears green energy goals; CEO Schmidt slams Bing

Internet search titan Google Inc. (NASDAQ: GOOG) is apparently closing in on its goal to produce renewable energy at a price point cheaper than coal. In an interview with Reuters Tuesday, Google's green energy czar, Bill Weihl, said that the odds of success have improved during the past year, and predicted, "In three years, we could have multiple megawatts of plants out there."

After announcing in late 2007 its quest for "green" energy, the company's Google.org division began investing in solar thermal, geothermal, and wind technologies. The tech firm's keen interest in alternative energy sources was a contributing factor last year when President Obama named Google CEO Eric Schmidt as one of his advisers.

Continue reading Google nears green energy goals; CEO Schmidt slams Bing

Google's top execs keep $1 salaries, forgo bonuses

Google Inc. (NASDAQ: GOOG) CEO Eric Schmidt and its thirty-something founders Larry Page and Sergey Brin will again toss themselves a $1 annual salary this year. Their salary compensation has been a single greenback ever since Google went public in 2004.

The three will also forgo the bonuses and stock awards that are given to many of the search giant's 20,000 employees. But the beggar bags should not go out just yet.

Continue reading Google's top execs keep $1 salaries, forgo bonuses

Google's CEO searches dire economy

Every week, there seems to be a new book that extols the magic of Google (NASDAQ: GOOG). There is even a book called What Would Google Do?, which tries to apply Google principles to a range of businesses.

In fact, even with the plunge in the global economy, it seems that Google is impervious to the real world. Right?

Perhaps not. Interestingly enough, there was some negativity from Google's CEO, Eric Schmidt. This is according to a presentation he gave at the Morgan Stanley (NYSE: MS) tech conference.

Continue reading Google's CEO searches dire economy

Money losers of 2008: Billionaires who lost billions this year

This post is part of our feature on Money Losers of 2008. See all 20.

There's no doubt about it -- times are tough. People are struggling to find work and to pay the bills as the value of their homes and savings dwindle. The poor get poorer, and the rich get richer.

Or do they? It's all relative, of course, but world's billionaires have been taking some big hits too. We take a look at Sheldon Adelson, Kirk Kerkorian, and Lakshmi Mittal in their own separate posts, but here are some other billionaires who have lost billions this year (courtesy of Forbes and Business Sheet).

  • Brothers Anil and Mukesh Ambani of India's private conglomerate Reliance lost $32.5 billion and $28.2 billion, respectively.
  • Warren Buffett, the Sage of Omaha, lost $16.5 billion. Shares of Berkshire Hathaway Inc. (NYSE: BRK.A) are down about 32% since the beginning of the year.
  • Microsoft (NYSE: MSFT) founders Bill Gates and Paul Allen lost $12.3 billion and $2.6 billion, respectively, while CEO Steve Balmer lost $6.5 billion. Shares of Microsoft are down 46% since the beginning of the year.
  • Larry Page and Sergey Brin, cofounders of Google Inc. (NYSE: GOOG), lost $11.9 billion and $11.7 billion, respectively, and CEO Eric Schmidt lost $3.8 billion. The share price of Google has fallen 55% since the beginning of the year.
  • Larry Ellison, CEO of Oracle Corp. (NASDAQ: ORCL), lost $8.2 billion. Shares of Oracle are down 21% since the beginning of the year.
  • Media maven Sumner Redstone lost $7.2 billion. Shares of his private investment firm National Amusements fell 70% this year.

Continue reading Money losers of 2008: Billionaires who lost billions this year

Google hunkers down in tough times, rearranges employee priorities

Say it isn't so: Google, Inc. (NASDAQ: GOOG) may be tightening its always-loose belt and reigning in costs as the economy tries to pick its way out of a recession. The company that prepares free gourmet lunches for employees and gives extraordinary time for employees to develop pet projects is pulling things into reality a bit.

Revenue growth at the search giant has slowed in the last year, as even internet advertising has slowed down in the face of a prolonged economic crunch that we're experiencing. Like many of us here at BloggingStocks have said for years, almost all of Google's revenue comes from online advertising. It was late to the game in trying to develop other revenue sources (yes, even a year makes a difference), and the incremental gains the company has seen in revenue still mostly revolve around some form of advertising. What happens when customers have no budget to advertise?

Google CEO Eric Schmidt told the Wall Street Journal that "We have to behave as though we don't know" (what's going to happen). Google will be cutting efforts to projects that have not caught on, aren't generating revenue and
also cutting back efforts on products that aren't exciting. Google's leader indicated that the company needs to "prioritize our resources and focus more on our core search, ads and apps business." That's great, except the "ads" part..

Google still has the model of envy when it comes to ad-based online revenue, but now it's having to stretch ads into more of its properties, like Google Finance and Google News. Can Google find more revenue engines than those small text ads that appear next to its search results? It has to -- it can't continue the same way of generating its cash flow and expect things to turn out alright in the future. Is Google a one-trick pony? Could be, although it's still too early to tell.

Google (GOOG) admits advertising slowdown, even as market share grows

Even Google Inc. (NASDAQ: GOOG) is feeling the economic pinch. Actually, what started as a pinch has turned into a train wreck, and now even the world's largest web search provider will be slowing hiring and turning down the heat on possible acquisitions. Google CEO Eric Schmidt told Bloomberg Television that advertising budgets are "under stress." I'd say that's an understatement.

In all likelihood, this will be Google's toughest test in its 10-year history. Its entire business revolves around advertising income. Although the company does it better than anyone -- and new media advertising is finally becoming mainstream -- the company's exposure to an ongoing slowdown could be cause for concern. Although the company may "do no evil," it will certainly have some profit evil creeping up on its results in some form soon.

Schmidt added that, "All of us are vulnerable . . . it's a race between a contraction in advertising, which would affect everybody, and a very positive shift from offline to online.'' The question is this: can Google take more of the dollars that are shifting to online advertising faster than the overall contraction in advertising spending over the next year or so (or longer)? Given Google's history, it will almost certainly continue to be successful, but it's hard to see the company taking such huge chunks of market share that the advertising slowdown won't chip away at its results.

Google this: CEO Eric Schmidt wants to join the Obama cabinet

Google Inc. (NASDAQ: GOOG) Chief Executive Eric Schmidt appears interested in joining Barack Obama's cabinet. He's not campaigning for the job, telling the Wall Street Journal that he was "too busy" running the world's largest search engine company.

Of course, anyone who wants a cabinet position never admits it. It's considered a faux pas. Schmidt, though, seems to be interested in making a difference beyond Google. He does not want to sit back on some deserted island counting his billions as he downs exotic frozen drinks.

The Journal, citing unnamed tech and media executives, speculated that Schmidt "might desire a role in an Obama administration, possibly the chief technology officer post Sen. Obama has said he would create." Exactly what that job would entail is not clear. It sounds like the type of job where Schmidt would sit in an office somewhere in the White House thinking grand thoughts and writing grand reports that would gather dust almost as soon as they were published.

Continue reading Google this: CEO Eric Schmidt wants to join the Obama cabinet

Google has a 22-year energy independence plan for the U.S.

Google, Inc. (NASDAQ: GOOG) CEO Eric Schmidt has sung the praises of many things in the past: consumer experience, mobile product offerings and even Google's philanthropic efforts. At the same time, Schmidt has made sure Google has evolved into a ruthless competitor that has really blindsided the internet marketplace in so many ways so fast that it caught most of us off-guard.

But can Google seriously save the world? Although tech pundits sometimes state that in tongue-in-cheek fashion, Schmidt is dead serious about it. Google's massive global infrastructure requires a ton of energy to operate. As we all know, energy costs are not exactly low. Although newer Google data center sites are chosen partly for cheap energy proximity, that's not enough. The company wants to fix the energy problem in the U.S., and they have a plan.

Continue reading Google has a 22-year energy independence plan for the U.S.

Warren Buffett to advise Barack Obama on the economy

The Oracle of Omaha is shining a light on the presidential campaign of Barack Obama.

According to media reports, Warren Buffett is participating with Obama in a meeting about the economy along with Google Inc. (NASDAQ: GOOG) Chairman Eric Schmidt, former Treasury Secretaries Robert Rubin and Larry Summers and former Labor Secretary Bob Reich, according to CNBC. New Jersey Gov. Jon Corzine, a former Goldman Sachs Group Inc. (NYSE: GS) co-chairman, and former Federal Reserve Chairman Paul Volcker also will be at the meeting of the wisemen tomorrow. Buffett will be participating via telephone hook-up.

There is plenty to talk about given the current state of the economy and the housing market which the International Monetary Fund says shows no signs of recovery. Obama, the junior senator from Illinois, is clearly signaling not to expect much from the meeting.

``I expect some further fine-tuning of short-term policies based on what's happened over the last several months,'' Obama said in an interview with Bloomberg News.

What that means is not clear. It should surprise no one that Buffett is backing Obama. The investor has been critical of President Bush's economic policies including the repeal of the estate tax which he said would be a "terrible mistake." But that doesn't mean he agrees with all of Obama's policies either.

As CNBC notes, Buffett supported Hillary Clinton while she was running for president and disagrees with Obama's call to tax the windfall profits of oil companies and his decision to forgo public financing of his campaign. I guess the Omaha investor considers Obama to be a significant improvement over Republican John McCain.

Interesting how the greatest investor in history who Republicans tout as a champion of capitalism is as big of a Democrat as Barbra Streisand.


Newspaper wrap-up: U.S. considering government takeover of Fannie Mae, Freddie Mac

MAJOR PAPERS:
  • Rick Wagoner, the CEO of General Motors Corporation (NYSE: GM), hit out against allegations that the auto maker may soon file for bankruptcy and said he believes the company's financial position will "remain robust" for the rest of the year. Wagoner also said, the Wall Street Journal reported, that the company has no plans to sell or reduce more of its brands.
  • An independent Yahoo! Inc (NASDAQ: YHOO) would be better for the world, Google Inc (NASDAQ: GOOG) CEO Eric Schmidt said and the Financial Times reported. Yahoo! will be able to create more competition in the search market and other advertising markets if it stays independent, Schmidt contended.
OTHER PAPERS:
  • According to people briefed on the plan, the New York Times reported that senior Bush administration officials are weighing a plan to have the government take over either Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, or Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac -- or both -- and place them in a conservatorship if their problems continue or worsen.
  • The New York Times also reported that people briefed on the matter said Anheuser-Busch Companies Inc (NYSE: BUD) is in active talks to sell itself to InBev in a friendly deal, despite previous hostility to the idea. One person said InBev indicated it may be willing to pay more than the $65 per share originally offered.

Google steps up hiring in 2008, but not in an organized way

Google, Inc. (NASDAQ: GOOG) has been growing its employee count by leaps and bounds over the last few years, but has recently slowed that growth which, of course, sounded an investor alert. But, the world's largest internet search engine just can't keep track of the activities of all its new employees, according to CEO Eric Schmidt.

Google does not want new employees to get lost in the cracks, according to Schmidt. If this is true, then Google is growing too fast for its britches. "We have slowed our head count growth for a couple of reasons, but the biggest reason is it began to feel like we really didn't have a good sense of what people were doing ... the systems in the company, literally who's doing what, what are they doing, seemed to lag our ability to hire these great people," Schmidt told CNBC.

In the first quarter of 2008, Google upped its head count from 16,805 to 19,156. That's quite a bit in a single quarter. Even with all those new people, Google affords more luxuries on its employees than most other public companies in the world. Even with a recession in progress (if you agree with that), Google's business, so far, has been stellar. Schmidt indicated that "we have gross margins to afford it," in talking about the lavish treatment of Google employees and the benefits they receive. Will shareholders continue to like the way that money is being spent? So far, there have not been any complaints.

Quattrone jumps into the Yahoo-Microsoft fracas

Frank Quattrone is a legend in tech dealmaking. He got his start in 1981 and has since worked for firms like Morgan Stanley (NYSE: MS), Deutsche Bank and Credit Suisse. Some of his deals include the public offerings of Netscape, Cisco Sytems, Inc. (NASDAQ: CSCO) and Amazon.com, Inc. (NASDAQ: AMZN).

Well, in March, he announced that he has put together a boutique investment bank, Qatalyst Group. His team has advised on more than 400 M&A deals and 350 financings.

Despite being out of the game for some time, Quattrone still has lots of brand power. Interestingly enough, he has already snagged a plum assignment. That is, he will represent Google's (NASDAQ: GOOG) CEO, Eric Schmidt, in the intricate battle between Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corporation (NASDAQ: MSFT). This is a according to a piece in the NYTimes.com.

OK, what will this mean for the fight? It's tough to tell. However, I'm sure Quattrone will devise something interesting. For example, there is already the beginnings of an advertising alliance between Google and Yahoo!

But whatever comes of things, I'm sure Quattrone will get a juicy fee -- and turbocharge his new firm.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Last updated: November 08, 2009: 09:21 PM

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