Archive for September, 2007

The wicked-smart tech money manager I spent time with at the investment conference last week nailed just about everything…
… except Google.
He said Google was the biggest train wreck in Silicon Valley.  That they were run by a couple of teenagers and were the most arrogant company in the world.
I asked him if he ever actually worked with Google?
He said no.
His attitude, though, echoes a popular sentiment… which to me means:  Google is just one big misunderstood company.
Now, I’m not ready to pull out the world’s smallest violin for them  quite yet… but being misunderstood has pro & cons for investors.
For example:
(1)  They don’t supply earnings guidance.  I’m not sure misunderstanding can get more dangerous than this for investors… as evidenced by the fact that GOOG’s only two earnings misses in the last few years were actually beats.  (Here and here.  Without these, GOOG would be assaulting $700.)
(2)  Google operates with the long term in mind.  Wall Street runs in the short term.
(3)  And now, everyone — even big time money managers — think Google is chaotic and about to collapse under its own disorganization.
Hardly.  They are a model for the future.
Want more evidence?  Here’s a clip from a Silicon Alley Insider piece on Yahoo:
GOOG has created what Yahoo, Microsoft, AOL, etc., can only dream about:  An environment with smart employees empowered to make important decisions quickly.
Maybe a little less efficient.  But a helluva lot more effective.  And that wins in the end.
Was at an investment conference last week and was speaking to the tech analysts, a wicked-smart guy.
He said two very cool things I’ll share:
(1)  Video is Next Big Thing
(2)  Virtual worlds (like Second Life) are the Next Internet
I can’t agree with him more.
Video may be red hot right now, but it’s only the tip of the iceberg. 
And — while using a virtual world today feels like using the Internet in 1994 on a 1200 baud modem — if you’ve never ventured into a virtual place, the only thing I can say is:  The sci fi writers had it right!
Recently had lunch with a Yahoo! manager. 
I asked her what she thought of former YHOO CEO Terry Semel. 
She said, "oh, you mean the guy that stayed at the Four Seasons in SF and took a limo back & forth to Yahoo headquarters in Sunnyvale each day?"  [About an hour ride each way.]
Of course, this is on top of the private aircraft YHOO shareholders provided Semel to commute from his LA home each week.
If that kind of unmitigated corporate waste wasn’t bad enough, what she said next is what everyone in the industry has suspected all along:
"Yeah, he really was checked out for the last year and a half or so."
Unbelievable that the board let all of that go on for as long as it did.  Shame on them.
Check out Silicon Alley Insider piece today:  Rohan on Google: Strong Q3, Plenty of Dry Powder

Barron’s Bias Continues

Posted: September 24, 2007 in Technology and Business
Not exactly sure why Barron’s gets my goat.  I guess Barron’s bias against online advertising — and in particular Google — just bugs me. 
Barron’s started off a recent piece with:
     "Ever since Google (ticker: GOOG) whiffed on its second-quarter earnings…"
GOOG didn’t whiff.  Journalism like this did.
To add insult, the article is supposed to be about how the melt-down in subprime could affect online advertising.  Certainly a good topic to discuss. 
But, rather than staying on topic, Barron’s introduces a number of petty and unrelated GOOG jabs into the mix, then stretches for a conclusion. 
The kicker:  Barron’s ridicules the notion that online advertisers could benefit from a slump as:
     "…reminiscent of the ruminations heard before the dot-com implosion."
Which, by the way, is exactly what the Financial Times concluded in a recent piece:
     "Online advertising spending is widely predicted to continue its strong growth even if a US economic downturn squeezes the advertising sector as a whole.  Indeed, pressure on companies to cut costs if the economy softens could even hasten the switch in spending from traditional media to more targeted and measurable digital forms."
Here’s the real difference between Barron’s and reporting:
Barron’s superficially uses the woes at Countrywide Financial to support its thesis… while uses actual data from Countrywide Financial:
     "Among US mortgage lenders, Countrywide has, for example, increased its share of online ad spending from 21 per cent to 55 per cent in the last 12 months, according to Sanford Bernstein."
Two very different conclusions, eh?
I’ve chronicled Barron’s blasting Google here a few times… chronicled how inaccurate and shoddy the reporting was… disappointing, actually, for such a supposedly respected news service.
An item showed up yesterday that now adds "hypocrite" to their resume.
James Altucher of did a weekly Barron’s roundup.
Catch this:
     "This week Barron’s highlights some of the best-performing stocks in its 400 index, which is up 54% in the past three years. Some of the stocks mentioned: Google and ViroPharma."
Sports fans have a disrespectful term for someone who couldn’t figure out a winner before the rest of the crowd:  Bandwagon jumper.
If I’ve said this once I’ve said it 100 times:  Love or hate Jim Cramer, he is a force.
Certainly, it’s always great to see stocks in your portfolio on Jim’s (or any analyst’s) bullish list.
However, after years of observing Cramer, here’s something I’ve learned:  Cramer getting fanatically bearish on a stock is usual a signal that it’s bottomed.
Happened with Cisco and Intel.  He didn’t like them for a long time… but it was when he absolutely hated them is when they started their move north.  (Now he loves them to pieces.)
Cramer has disliked YHOO for a long time.  But he’s blasting them more & more:
     Next up? [To move upward]  Google, which, by the way, is going to get still one more leg up from the sinking ship that is Yahoo!.
Weird but there is something comforting in Cramer finally hating YHOO.