By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) — It's had almost eight years to enjoy the spotlight as one of the great initial public offering investments in Silicon Valley history. Now Google Inc., like everybody else, waits for next month's Facebook IPO to see if history will repeat itself.
But Google
/quotes/zigman/93888/quotes/nls/goog GOOG
+1.45%
didn't get where it is without being hypercompetitive. It has one more chance to steal the spotlight Thursday, when it reports first quarter earnings after the market closes.
Earnings estimates and analyst notes suggest a rather ho-hum report. Revenue is supposed to rise about 25% from last year to $8.1 billion, according to FactSet Research, though that is little changed from its fourth quarter. Profit is supposed to be about $9.64 a share, up from $8.08 a year ago.
See Google earnings outlook.
/quotes/zigman/93888/quotes/nls/goog
GOOG
635.96,
+9.10,
+1.45%
But given the concern on Wall Street about first-quarter earnings in general, and the fact that Google missed some estimates last quarter, the company will have to really light it up to get any sort of stock boost.
There will be interest in any details on the company's pending acquisition of Motorola Mobility. And lots of attention will be paid to its efforts in the mobile market, in terms of mobile advertising revenue and the impact of hand-held usage on its more lucrative cost-per-click search ads. But there is a more of a risk this news will be disappointing than stunningly positive.
Where Google has a real chance to surprise is with any details of what it might do with its cash hoard of more than $44 billion (as of last quarter), one of the largest in Silicon Valley. Could it declare a dividend like Apple Inc.
/quotes/zigman/68270/quotes/nls/aapl AAPL
-0.36%
did recently? Or announce a surprise acquisition, a la Facebook's $1 billion shocker of Instagram this week?
Google is on record as saying it doesn't expect to pay a cash dividend in the foreseeable future, and analysts aren't expecting one. But that's the beauty of a surprise. As for acquisitions, a small deal might serve as a nice reminder to Mark Zuckerberg who the big dog in Silicon Valley buyouts still is. YouTube anyone?
The fun in covering technology news is that the egos are so great that you tend to get more surprises, than say, on Wall Street or in the energy industry. Google CEO Larry Page may not be in the mood for surprises on Thursday but he'd be wise to remember how Google stole the show in the markets in 2004 with its surprise run after its IPO.
After debuting in August of that year at $85 a share, and with Wall Street evenly divided about whether it would rise or fall from that level, Google shares began a historic surge that saw them rise to more than $600 three years later. They've been volatile since, but still look strong at $635.96 as of the close Wednesday.
At the time of its IPO, Yahoo Inc.
/quotes/zigman/59898/quotes/nls/yhoo YHOO
-0.77%
and Microsoft Corp.
/quotes/zigman/20493/quotes/nls/msft MSFT
-0.41%
/quotes/zigman/20493/quotes/nls/msft MSFT
-0.41%
/quotes/zigman/20493/quotes/nls/msft MSFT
-0.41%
/quotes/zigman/20493/quotes/nls/msft MSFT
-0.41%
were major competitors, now largely left in the dust, at least in terms of performance for investors. Does Google share a similar fate in the Facebook era?
Unlikely. As I've said before, Google is a service. We all use it many times a day. Facebook is still an indulgence. But Zuckerberg hopes to change that, as the Instagram photo app deal indicates.
More than 30 quarters of earnings, a recession and a global financial crisis later, my recollection of the Google IPO may be a bit fuzzy. But I remember it as being a bigger event for the markets then the Facebook deal is shaping up to be.
Perhaps that's because a lot less retail investors are in the markets these days. Or because even Google's remarkable record for investors was eclipsed by Apple and the iPad/iPhone revolution. Or because Zuckerberg has done such an excellent job pissing off Wall Street and locking out the little guy who made Facebook a reality that there just isn't the retail interest we saw in Google all those years ago.
We will see soon enough. In the meantime, Google has a last public opportunity to take up the challenge on Thursday. Whether it decides to raise the flag or simply play it cool and ignore the young upstart, may say a lot about how comfortable it remains in its slightly-aged, virtual skin.
/quotes/zigman/93888/quotes/nls/goog 
US
: Nasdaq
Volume: 2.20M
April 11, 2012 4:00p
Market Cap
$203.82 billion
/quotes/zigman/68270/quotes/nls/aapl
US
: Nasdaq
Volume: 24.88M
April 11, 2012 4:00p
Market Cap
$585.94 billion
/quotes/zigman/59898/quotes/nls/yhoo
US
: Nasdaq
Volume: 11.21M
April 11, 2012 4:00p
Rev. per Employee
$353,489
/quotes/zigman/20493/quotes/nls/msft
US
: Nasdaq
Volume: 43.02M
April 11, 2012 4:00p
Market Cap
$255.67 billion
Rev. per Employee
$800,578
/quotes/zigman/20493/quotes/nls/msft
US
: Nasdaq
Volume: 43.02M
April 11, 2012 4:00p
Market Cap
$255.67 billion
Rev. per Employee
$800,578
/quotes/zigman/20493/quotes/nls/msft
US
: Nasdaq
Volume: 43.02M
April 11, 2012 4:00p
Market Cap
$255.67 billion
Rev. per Employee
$800,578
/quotes/zigman/20493/quotes/nls/msft
US
: Nasdaq
Volume: 43.02M
April 11, 2012 4:00p
Market Cap
$255.67 billion
Rev. per Employee
$800,578
David Callaway is editor-in-chief of MarketWatch.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Donate to Wikileaks.
No comments:
Post a Comment