Saturday, July 9, 2011

Google Rallies +2.1% for Week! (Chart) *Reports quarterly earnings Thursday, July 14* GOOG


Google will announce quarterly financial results on Thursday, July 14, 1:30 p.m. PT, after market close


Google Inc. GOOG closed at $531.99 on Friday, July 8, 2011. Google was up +2.10% for the week, is up +5.06% for July, was down -4.28% for June, is down a disappointing -10.43% for 2011, and is up +82.88% since the March 9, 2009 market cyclical low. GOOG is down -16.83% from the 2011 and multi-year closing high of $639.63 on January 18, 2011. That was the highest close since $653.82 on January 14, 2008.

S&P 500 By comparison, the overall market, the S&P 500, closed at 1343.80, was up just +0.31% for the week, is up +1.75% for July, was down -1.83% for June, and is up +6.85% for 2011. SPX is up +98.63% since the March 9, 2009 market cyclical low. SPX closed at a multi-year closing high of 1363.61 on Friday, April 29, 2011, the highest close since the June 9, 2008 close of 1404.05, and is now -1.45% below that peak. A review of the S&P 500 is here [S&P 500 Rally Stalls on USA Unemployment Data (Chart) *Small +0.31% for week*]. GOOG is underperforming the overall market long-term since the March 9, 2009 market bottom, underperformed the market in 2010, and continues to significantly underperform the market in 2011.

Google Fundamentals Google will report quarterly financial results on Thursday, July 14, 1:30 p.m. PT, after market close. Google reported disappointing calendar Q1 2011 financial results on April 14. Google financial data, charts, and review is at the Google Financial Performance page, updated for the latest calendar Q1 2011 financial results. A review and analysis of the Q1 2011 earnings call is at the Google Earnings Conference Call page. Jonathan Rosenberg, Senior Vice President of Product Management, announced on April 4 he would be leaving Google "in the coming months". Our updated valuation and target price for GOOG stock is posted at the Google Stock Valuation page. Revenues from outside of the United States were 53% of total revenues in the Q1 2011, up from 52% in Q4 2010.

Google News A summary and review of 2011 major announcements are below in this post.

Economic and Market News Information about the USA and world economies is posted at Boom Doom EconomyFinancial ControlsBaidu Planet, and Neo Solomon. Additional current commentary on both the overall stock market and economy is posted at Matrix Markets.


Google Daily Chart Below is the GOOG daily chart since October 14, 2009 to illustrate price interactions and a long-term perspective.

Noteworthy Closing Prices
Current Close: $531.99
2011 and Multi-Year High: January 18 $639.63
2011 Low: June 24 $474.88
2010 High: November 8 $626.77
2010 Low: July 6 $436.07
YE December 31, 2010: $593.97
YE December 31, 2009: $619.98
Cyclical Low November 24, 2008: $257.44

Google Chart Review
Intermediate Term Trend level 25d avg less than level 50d avg, GOOG above both 25d and 50d avgs, tenuously bullish
Long Term Trend GOOG less than 10 month ema = 543.94, bearish
Key Resistance 543-544, 100d avg 549, 200d avg 571
Key Support near support, 530-531, 528-529, 525, 50d avg 519, 518, 20d avg 504, benchmark 500
Moving Averages above 20d, 50d avgs; below 100d, 200d avgs
Uptrend Line below since 5-13-11; line from 11-24-08 cyclical closing low 257.44 up thru 7-6-10 closing low 436.07
Downtrend Line below since 1-18-11; near test 7-7-11; line from 11-6-07 closing high 741.79 down thru 1-18-11 closing high 639.63
RSI 14 Day = 70.73 is marginal overbought, ascending
RSI 28 Day = 53.12 is reasonable, descending
MACD (12,26,9) = +7.02, descending, 7-7-11 (+7.61) was multi-year high
Volume very high 4.8M latest day, 50 day avg = 2.6M
Price Earnings Ratio (ttm) slightly low 20.66, below historical average of 21-22+


Conclusion Google has rallied with the equity markets and technology sector recently, after reaching an abysmal low and extreme in June. GOOG calendar Q2 earnings are this next week and will determine Google's short-term fate. A third Death Cross, the now descending 100-day average crossing below the leveling off 200-day average, occurred on Monday, June 13, 2011.  A second Death Cross was the now mostly level 50-day average descending below the 200-day average occurred on Wednesday, May 11. The first Death Cross was the 50-day average dropping below the 100-day average on April 5, 2011. GOOG plunged on April 15 after the Q1 financial results disappointed and are reviewed on the Google Financial Performance page. Higher operating expenses offset higher total revenues and there is uncertainty over the management restructure that placed Google Co-Founder Larry Page as CEO again. In addition, there is now concern that Q2 2011 ad revenues may be weaker than projected. The Q1 2011 earnings call is reviewed on the Google Earnings Conference Call page. We still forecast that Google should have better financial performance ahead in 2011. The intermediate-term trend continues tenuously bullish. The long-term trend continues bearishMore about Google the value of GOOG stock on the Google Stock Valuation page. Google is down, but not out.

Disclosure We have no position in GOOG. We continue bullish on GOOG for 2011. All is not lost, but nothing is likely to occur to rally GOOG much further until Q2 2011 financial results are reported in July.

Google I/O Conference was held May 10 and 11, 2011. Among the highlights were the rolling out of Google Music beta, integrating Android with Google TV, Google Movies for Android, unveiling Acer and Samsung Chromebooks, Android 3.1 upgrade (Honeycomb), Android 4.0 (Ice Cream Sandwich) coming soon, and Google @Home announced to connect household devices.

Google News
● Andrew Rubin tweeted on June 28 that 500,000 Android devices are being activated daily at a growth rate of +4.4% weekly.
● Google announced June 24 the Federal Trade Commission had launched a "review of our business". This is believed to be an antitrust investigation into Google search. The European Commission began an investigation of Google for "abusing its dominance" in 2010 that is still in process.
● Google Voice Search was announced June 14.
Google unveiled Chromebook in May and both the Acer and Samsung versions went on sale in June.
● comScore announced May 6 that Google Android was the top USA smartphone platform with a 34.7% market share for the quarter ending March 2011.
● Google announced One Pass on February 16 to counter the Apple announcement the previous day of an App Store subscription service. It does appear that Google is offering more favorable terms to publishers than Apple.
● Google was in the news in December as a result of the Google Chrome Event on December 7. In addition, Google announced the launch of the Samsung Nexus S Android (Gingerbread OS) smartphone and the opening of the eBooks Store. At the Google Chrome Event, the Chrome Web Store was launched, the Chrome Notebook was unveiled, which is planned to be consumer-ready by mid-2011 with Acer and Samsung as the first manufacturers, and Google announced the Chrome browser user base had increased +300% in 2010 with a conservative count of 120+ million active users. More innovation is coming for the Chrome browser, based on speed via Chrome Instant.


Google Data Google's market capitalization is the 13th largest in the USA at $171.43 billion. This is behind #1 Exxon $406.01 billion, #2 Apple $332.64 billion, #3 Microsoft $227.01 billion, and #4 International Business Machines $213.76 billion (IBM initially passed $200B the week ended April 1, 2011), and #12 Oracle $171.92 billion. Google is the 5th largest technology company in the USA by market capitalization behind Apple, Microsoft, IBM, and Oracle. Current Google financial data is at the Google Financial Performance page. A review and analysis of the Q1 2011 earnings call is at the Google Earnings Conference Call page. More about the value of GOOG stock on the Google Stock Valuation page. Headcount: On a worldwide basis, Google employed 26,316 full-time employees as of March 31, 2011, up from 24,400 full-time employees as of December 31, 2010.

GOOG! Google describes itself in press releases as, "Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia."

Google's Mission Statement "Google's mission is to organize the world's information and make it universally accessible and useful. The first step toward fulfilling that mission came when our founders, Larry Page and Sergey Brin, working out of a Stanford University dorm room, developed a new approach to online search that quickly spread to information seekers around the globe. Google is now widely recognized as the world's largest search engine -- a free service whose utility and ease of use have made it one of the world's best-known brands almost entirely through word of mouth from satisfied users."


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