Golden child Google missed analysts unrealistic expectations of what the search engine is capable of in quarterly results yesterday. This is the second time the company has failed since its 2004 IPO. Investors unconsensually punished the stock in after hours trading, with shares falling up to 8.3% ($45.29), to $503.40, to say nothing of the cutting and “You sicken me” chanting by Larry and Serge in front of the bathroom mirror.
Google’s work force ballooned 13% and research costs shot up 88%, in an effort to put unauthorized crotch shots of tabby cats on Street Views. Some ideas for cutting back on soaring costs, which investment strategist Carsten Klude maintains are vital to a company like Google’s growth, include taking away the free lunches and not buying any more of the founders’ wife’s companies in an effort to get out of taking out the trash.
If Mark Zuckerberg wants to know what it’s like to be touched by Sergey Brin and Larry Page (A. Weird at first, then really kind of nice), he’s going to put it out there in no uncertain terms, Brin told DealBook Sun Valley correspondent David Carr yesterday in Sun Valley. “We don’t really look at companies for acquisitions unless they are really interested,” Brin said, not saying that he’s run into with “mixed signals” before but seeming to imply it. “If they come to us, we’d certainly be open to talking,” he added, meaning “You come 90, we’ll come 10.”
Facebook, who turned down a $1 billion offer from Yahoo last year is under the impression that Google et al will want it for its new “Platform” (and mind) at least $2 billion. FB’s recent “growth spurt,” open policy, etc, also has people talking about a big buy, although there are some around these part who think Facebook’s crossover from exclusive to inclusive* (plus its insistence on overloading the page with, what’s the word, crap) should be a signal to companies to stay away and let the thing IPO itself in 2009.
Smart people would rather work at Google than Goldman Sachs, Bloomberg reports today. One reason is that “Goldman's current package is not enough to compete with West Coast IT companies.” But then again, if you work at Goldman, you get to play with Excel all day. It's so hard to decide, we know. Having difficulty picking one G over the other? We’ve broken it down for you, after the jump.
Are you completely incapable of making the most basic decisions on your own, including “What should I have for dinner” and “How should I touch myself?” Don’t sweat it—while it’s true, yes, you are not in tune with your own body, some day, in the very near future, none of that will matter, thanks to a little thing called Google, another little thing called invasion of privacy and another little thing called monetizing this racket.
Eric Schmidt, Google’s chief executive, said gathering more personal data was a key way for Google to expand and the company believes that is the logical extension of its stated mission to organise the world’s information.
Asked how Google might look in five years’ time, Mr Schmidt said: “We are very early in the total information we have within Google. The algorithms will get better and we will get better at personalization.
“The goal is to enable Google users to be able to ask the question such as ‘What shall I do tomorrow?’ and ‘What job shall I take?’ ”
Yes, in just a short time, Carney will be able to sit comatose, while a computer tells him that he should indeed bite the bullet and buy 1,000 shares of Vonage (sidebar: is that thing bankrupt yet?), take that last hit of meth and RSVP to his twentieth high school reunion, even though he hasn’t yet secured a date. And Google will make another few billion off of what sounds like it’s shaping up to be quite an evening.
In other news, Yahoo sat around and twiddled its thumbs.
Okay. Here's a little story. Around a year ago we were doing a lot of freelance writing, growing unpersuasive facial hair and trying to figure out what to do with ourselves now that we had bailed out of the world of high yield finance. One of the things that kept us entertained during this period was a quirky little online video sharing community called YouTube.
We liked it so much we even pitched a story about it to the New York Times. To our surprise, the Times loved the idea and told us to bring them a story in two weeks. This turned out to be harder than we thought, in part because the users of the still young YouTube community were very wary of outsiders emailing them and asking questions.
One then-prominent YouTuber answered our inquiries with this:
But how can i REALLY know you're from the new york times? you know, strangers on-line tend to lie...
Example: sometimes when they say that they are female when they are chatting ... they are really male... ;)
I hope you understand where i'm coming from...
But by far our favorite response was this one:
lol NY Times, ok dude. Sure I'll call you, then next thing I know we're in the back seat of your car behind a McDonald's and you claim that you 'forgot' the rubbers but it's okay because you've 'had a vasectomy' and your case of scabies has 'cleared up'.
The Wall Street Journal would've been a better line.
We did finally get the story, and it ran in the Times under the headline "People Who Watch People: Lost in an Online Hall of Mirrors." It was a bright and shining moment in our fledgling freelance writing career. Not only had we landed a byline in the Times, we had written one of the first articles in a mainstream media outlet about a cutting edge technology we were sure was going to be huge. We were journalists, cutting-edge, trend-defining journalists. And we were very happy about it.
Then Google bought YouTube. And even the receptionist got rich. Suddenly writing about cutting edge technologies didn't seem like such a bright idea.
The next time we discover the Next Big Thing we're not pitching anyone any damn stories about it. We're going to work for them. Even if it means we're sorting the mail or ordering post-it notes. Because it is just too expensive not to be Shannon Hermes.
YouTube's making millionaires in the lower ranks [MarketWatch via CrossingWallStreet]
The rise of YouTube from nowhere to being one of the most popular sites on the web is the biggest start-up story of the year. But is the rise of YouTube over? Over on the Alexa Web Discovery Machine blog, Geoffrey Mack has posted the graph above. It clearly shows that YouTube’s traffic growth flatlined—at least according to the mysterious and not necessarily accurate Alexa metrics—in October.
An agreement would allow Verizon's customers to view some of the most avidly watched entertainment on the Internet. That could advance the long-expected convergence of video and cellphones. It could also, at least temporarily, give Verizon a marketing edge over its rivals in the wireless and cable industries, furthering the company's efforts to expand into Internet and entertainment services.
Under the terms being discussed, customers of Verizon Wireless -- Verizon's joint venture with Vodafone Group PLC -- would be able to view some YouTube videos on their cellphones through the carrier's premium V Cast service, people familiar with the matter said. Verizon Wireless, like other cellular providers, has been adding video and data services to offset declining revenue from its calling plans.
LG15 fans are likely to be conflicted about this news. On the one hand, Verizon is using their girl for its own selfish gains. On the other hand, now we they can watch her from anywhere.
The three-month test version of Google Print Ads starts this week and participating papers include the New York Times, Washington Post, and The Boston Globe. Around 100 advertisers, including the Netflix movie rental concern, luggage vendor eBags, and insurance broker eHealth, have already started buying ads through the new system.
It will almost certainly be in the best interests of newspapers for the trial to prove successful, as Google wants to eventually extend the marketplace to all of its online advertising customers. As of next year, newspapers could tap into a whole new arena of hundreds of thousands advertisers as the system is also made available outside the United States.
Google will add a "newspaper advertising" tab on its AdWords online portal, where businesses already bid on certain search terms to direct users to their websites.
One of the first great viral video sensations to hit the video sharing services were the various experiments mixing Diet Coke and Mentos to explosive effect. At one point the videos became so ubiquitous it seemed that everyone with a digital camera and a YouTube or Revver account had made one. The Wall Street Journal even ran a feature on the different corporate reactions to the videos (Mentos loved them; Coke didn't get it.) The pinnacle of this line of videos came from Fritz Grobe and Stephen Voltz, two men from Maine who created the stunning display shown in the video above.
Now comes word that Google has penned an agreement with Grobe and Voltz to share ad-revenue with them in exchange for hosting their video on Google video. The bet seems to be that viewers will follow the most popular content to whichever site hosts the videos. Thus the era of proprietary video sharing and possible profitability for the creators of online video content seems to have been born.
And, of course, the deep-pocketed Google probably doesn't mind creating any industry standards that will make video sharing more expensive for the host website, a move which will probably help stifle competition.
The news that Google owned YouTube took down the ubiquitous Daily Show clips and other material from Comedy Central got a lot of play over the weekend. But, as TechTraderDaily noticed, it’s not at all clear that the purge is actually working. There are hundreds of Daily Show, Colbert Report and South Park clips still available on the site. So what’s going on?
One possibility, raised in this video, is that Googtube is only deleting videos that last longer than five minutes. Is there some maximum time for stolen videos? Comedy Central owner Viacom did not return our request for comment.
Okay. It’s not exactly an original point—but our president sure speaks strangley. Remember his line about “the internets?” It wasn’t just the odd sounding pluralization that made it so weird. It was the misplaced article—the “the” where none is usually used. Well, he’s at it again.
CNBC last night aired an interview with the president, and when asked about whether he uses Google the president replied: “One of the things I’ve used on the Google is to pull up maps.”
It’s not a big deal but it sure is weird. Where does this misplaced article come from? Is this some regional tick that we aren’t aware of or is it something else?
You can watch the video here (but only if you are running WIndows, of course, because they are hosted in some space that is partnered up with Microsoft).
The New York Times has never crossed a wound she didn't want to rub salt in and Friendster, the poor man's MySpace, YouTube, etc, etc, etc is no exception. (To all the fourteen year olds out there who read our site-- there was a time before FaceBook, you snot-nosed punks, and we know that because we're old!). She writes,
Roughly once a week, David L. Sze, a venture capitalist at Greylock Partners, hears from entrepreneurs who say they have the next MySpace, the copycat social networking site that has trounced Friendster. “The counter to that is, ‘Tell me why you aren’t going to be the next Friendster,’ ” Mr. Sze said. “It’s become the iconic case of failure.”
There's also an adorable cartoon depicting "Friendster-Man" at a party drinking his own keg and gorging himself on a bowl of what appear to be pigs-in-a-blanket, while everyone else-- "MySpace-Chick," "YouTube-Dudes," you know, the usual Friday night crew-- couples up and ignores Mr. Friendster: The Wallflower at the Web Party. The whole thing is actually pretty awesome, so much so that we wish we'd come up with it ourselves, as you know we never miss a chance to kick someone when they're down. Perhaps this silver lining in this whole thing is that the Gray Lady's finally revealed herself as the Brenda Walsh we always knew she was. Which, we've got to say, is a pretty great consolation prize.
A few weeks ago bloggging tech mogul Mark Cuban wrote that anyone who bought YouTube would be immediately sued by the media companies whose copyrighted materials make-up so much of the most popular material on the video sharing website. Now he’s admitting that not only hasn’t this happened following the acquisition by Google, but it wasn’t ever likely to happen.
But not because the media companies don’t care about their copyright. And not because they just love YouTube so much they’ve decided to let the kids play with their content. It’s because they are suing smaller video sharing websites, building legal precedent favoring strong copyright enforcement and gaining leverage for negotiations with GoogTube.
If they can win some judgements saying these little sites are not protected by Safe Harbor rules, then they have all the leverage in the world to dictate licensing terms to sites that until now have not proactively enforced copyright but have instead chosen to rely on rightsholders takedown notices. If one of those sites has deep pockets, then it could turn into a payday for rightsholders, whether via lawsuit or licensing terms.
For Jawed Karim, the $100,000 or so he would have to spend on a master’s degree at Stanford was never daunting. He hit an Internet jackpot in 2002 when PayPal, which he had joined early on, was bought by eBay.
On Monday, still early in his studies for the fall term, he got lucky again. This time he may have hit the Internet equivalent of the multistate PowerBall.
Mr. Karim is the third of the three founders of the video site YouTube, which Google has agreed to buy for $1.65 billion. He was present at YouTube’s creation, contributing some crucial ideas about a Web site where users could share video. But academia had more allure than the details of turning that idea into a business.
Mr. Karim, who is 27, became visibly uncomfortable when the subject turned to money, and he would not say what he stands to make when Google’s purchase of YouTube is completed. He said only that he is one of the company’s largest individual shareholders, though he owns less of the company than his two partners, whose stakes in the company are likely to be worth hundreds of millions of dollars, according to some estimates. The deal was so enormous, he says, that his share was still plenty big.
Big enough for choice grade hookers AND mint condition Star Wars dolls, we'd imagine. Not that we've crunched numbers on this kind of thing. But it's big enough, we hear.
We pointed out the other day that Google had bought YouTube for about 1% of its equity. The Big Picture takes the analysis one step further, noting that after the rise in Google’s share price following the acquisition, Google essentially picked up YouTube for free.
And if the stock keeps climbing, well, then Google picked YouTube up for less than nothing. The market is paying Google to buy YouTube.
YouTubers have begun posting videos reacting to the Google acquisition. Despite fears that getting scooped up by a big company might tarnish the YouTube’s image in the minds of its most loyal users, the overwhelming majority of these videos seem very positive. Far from crying “sell out,” most users seem happy with the Google buy—perhaps hoping that their little corner of fame on the internet will become a little bit bigger.
The video we've embedded above is actually quite imaginative in its vision of what GoogTube might look like.
We have to admit that sometime in 2001 we became convinced that the era where you could start an internet company and two years later sell it for hundreds of millions was over. After the first internet bubble burst we assumed that companies located on WWW street would forever be discounted by big money burned in the bubble.
But we were wrong. A smarty pants website can still make you rich, especially if it’s user driven and counts as two-point-oh. Does this make sense? Mark Cuban, at least, think Google is kind of dumb for buying YouTube.
It will be interesting to see just how google reconciles selling videos like Crazy in Love from Sony, when the same video is available as a user upload for free from youtube.
it will be interesting to see how Fox reacts to this deal Fox owns content. Neither google or YT does. Could Fox, the owner of Myspace put GooTube in a huge hole by being legally aggressive and going after every video of Stewy from Family Guy , American Idol, any of their TV shows ? The same with their movies. Beyond just Gootube, (and I mash them together with nothing but love :), Fox could make them look real bad by using supoaenas to go after individual Gootube users. Fox is also a stickler for DRM, they aint gonna like having their content floating DRM free around the net. Sure, myspace would have to clean up some of their own videos, but it would be a far easier chore than Gootube has. Now that would be a celebrity lawyer match worth watching.
Okay. The conference call just ended. There will no doubt be lots of commentary on the deal over the next few days and weeks. Here’s our quick take on the call.
Search: Sergey Brin twice emphasized the “search” potential of including video. It’s clear that Google’s founder is still very focused on Google’s core competence. That should be reassuring to Google shareholders who might be worried the company is going astray with recent product developments and acquisitions.
Social Networking: Google has been only moderately successful in social networking. Orkut never really took off. Dodgeball (which was founded by a friend of DealBreaker) is amazingly useful to its users and is popular among certain cutting-edgeurbanusers but hasn’t yet deeply penetrated our broader cultural fabric. YouTube took off in part because of its social networking potential. Google seems interested in further penetrating this internet space.
Independence: YouTube is keeping its name and will continue to be run as a separate business unit. GoogleVideo is not going away either, and plans to further integrate it with Google’s main search will continue. So YouTube users probably don’t have to worry that they are going to have to open Google user accounts anytime soon.
Advertising: The potential for integrating Google’s advertising capabilities with YouTube were downplayed on the call, treated as definitely secondary to integrating the power of Google’s search capabilities with YouTube.
Copyright: This was one of the big things that led some, like Mark Cuban, to say that only a moron would buy YouTube—so much of the most popular content on YouTube is owned by others and posted on the site in violation of the owner’s copyright. Of course, today’s deal comes only hours after YouTube announced content sharing deals with Sony BMG, Universal, and CBS (and Warner a couple of weeks ago). With Google’s muscle behind it, YouTube should now be even more attractive to producers of video content who are looking for new ways to bring their content to users over the internet, according to the GoogTubers.
Google Inc. (NASDAQ: GOOG) announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community.
It's a bit unusual for Google to do this as an all-stock deal. But it makes sense here, where any cash component would probably create huge tax liabilities for YouTube's owners. It also means that Google just picked up YouTube for about 1 % of its equity. That’s the power of a $125 billion market cap.
DealBook reports this morning that Google is in talks to acquire video sharing site YouTube for around $1.6 billion. Soon Sergey may have LonelyGirl15 all to himself.
For a few moments last week Google's stock dropped $350. Don't get too excited. It was a mistake. Those guys are still making a fortune selling "tiny classified ads."
On Thursday, trading in Google wrapped up the day at $387.12 a share at the usual closing time of 4 p.m. A minute after the close, Google announced its second-quarter results: better than expected earnings, but decelerating revenue growth from the prior quarter.
At 4:02 p.m., in after-hours trading, Google's shares got creamed, initially tumbling to as low as $364, down more than $23 a share from its close, but then rallying back to $391, for a gain of nearly $14.
At about the $391 price point, an order originated on Instinet-ATS (a Nasdaq company) that triggered trades between 4:10 p.m. and 4:12 p.m. at a price as low as $38 (representing a drop of almost $350 a share from the close). In brief, someone from a Nasdaq member firm punched in an erroneous figure to commence a trade.
That led to a host of subsequent trading at $38, as well as at $37.81, $37.82, $37.99, $38.02, $38.03, and $38.05.
Steve Sailer discovers the secret of Google's money machine--its highly intelligent Adsense algorithm for assigning ads to websites. For instance, right now isteve.com is running the following ad:
Beirut Hotels Last minute, discounted hotels in Beirut. Rates up to 70% off! www.hotelbrowser.biz
The Washington Post has the lowdown on Google founder Sergey Brin's trip to Washington. It doesn't seem to have gone that well.
While Brin aides said he met with at least four senators, he did not see Senate Commerce Committee Chairman Ted Stevens (R-Alaska), whose committee has the greatest sway over the telecom legislation that Brin is trying to influence. The offices of four other senators said they could not arrange meetings, noting that they were approached late last week.
Surely someone should have told Sergey Brin that almost no Senators will actually know who he is. Senators don't recognize names unless they've seen them a six or seven times on campaign donation checks.
Google introduced a spreadsheet application today. It's available on a limited, first-come, first-serve basis by signing up here. Early reports tout its collaborative and portability features. Multiple users can revise the spreadsheet using a chat function and since the spreadsheets are stored on Google servers, they can be accessed from anywhere by any authorized users.
We suppose you can read the reporting on today's Google conference call from Reuters or CNNMoney. They are good enough as far as they go. But the most complete treatment comes from John C. Ogg on the 24/7 Wall Street blog. It's little more than a hastily written transcript but its got the goods on who asked what, which is always one of the best parts of these calls.
In the continuing Yahoo! Finance vs. Google Finance vein, a reader offers the following screenshot from Yahoo! analyst day presentations:
(Click for large version.) Our conclusion: There seems to be more blue. Recommendation: Neutral. Also: Yahoo! will have "widgets" as well.**
** Obvious pandering to bloggers. Not that we mind being pandered to...
So maybe the outlook for free cash flow growth isn't as bad as it seemed. Unless Google plans to become a REIT, approximately $750 million of the $1.5 billion in CAPEX estimated for this year should disappear. When/if it does, this will provide a nice lever for cash flow acceleration.
$$$ What's the first result when you type "finance" into Google? Uh... Yahoo! Someone's getting fiiiiiired. [via Going Private]
$$$ The 80,000 volt electric briefcase. Where the hell was this when we were dropping off piles of cash on behalf of Equatoguinean dictators in Dupont Circle for Riggs Bank in '04? Now they tell us! [via BoingBoing]
$$$ The first rule of Hedge Fund Polo Club is that no one talks about Hedge Fund Polo Club.
The launch of Google Finance this morning is undoubtably painful for Yahoo!, which has been experiencing pageview declines on Yahoo! Finance as of late. (We might as well blame Lloyd Braun. Everyone else does.)
An Open Letter to Everyone Who Sold Massive Quantities of Google (NASD: GOOG) Today, Driving the Stock Down 27 Points:
You probably should not have owned the stock in the first place if it took an overt statement from the CFO to get it through your heads that search is no longer the primary area of growth for Google. If that's news to you, it means that you've somehow missed the 1,827,384 articles, white papers, blog posts, about Google advertising, projects in Google R&D, Google's competitive position vis-a-vis non-search properties, etc. And we're not sure how you could have possibly done that, but we're guessing you've missed out on a few other things in the meantime:
· Philip Morris: No longer just cigarettes! (No longer called Philip Morris, even!) · IBM: Revenue for mainframes down! · Enron: No longer exists!
Golden child Google missed analysts unrealistic expectations of what the search engine is capable of in quarterly results yesterday. This is the second time the company has failed since its 2004 IPO. Investors unconsensually punished the stock in after hours trading, with shares falling up to 8.3% ($45.29), to $503.40, to say nothing of the cutting and “You sicken me” chanting by Larry and Serge in front of the bathroom mirror. 
If Mark Zuckerberg wants to know what it’s like to be touched by Sergey Brin and Larry Page (A. Weird at first, then really kind of nice), he’s going to put it out there in no uncertain terms, Brin told DealBook Sun Valley correspondent David Carr yesterday in Sun Valley. “We don’t really look at companies for acquisitions unless they are really interested,” Brin said, not saying that he’s run into with “mixed signals” before but seeming to imply it. “If they come to us, we’d certainly be open to talking,” he added, meaning “You come 90, we’ll come 10.” 
Smart people would rather work at Google than Goldman Sachs, Bloomberg reports today. One reason is that “Goldman's current package is not enough to compete with West Coast IT companies.” But then again, if you work at Goldman, you get to play with Excel all day. It's so hard to decide, we know. Having difficulty picking one G over the other? We’ve broken it down for you, after the jump.
Okay. Here's a little story. Around a year ago we were doing a lot of freelance writing, growing unpersuasive facial hair and trying to figure out what to do with ourselves now that we had bailed out of the world of high yield finance. One of the things that kept us entertained during this period was a quirky little online video sharing community called YouTube. 
The Washington Post has the lowdown on Google founder Sergey Brin's trip to Washington. It doesn't seem to have gone that well. 
The launch of Google Finance this morning is undoubtably painful for Yahoo!, which has been experiencing pageview declines on Yahoo! Finance as of late. (We might as well blame Lloyd Braun. Everyone else does.)