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Face-Off: Microsoft vs. Google

By Taryn Cooper, at 1:12 pm on March 1st, 2010

In the spirit of yesterday’s closing ceremonies at the Olympics, I would say that — much like Team Canada vs. Team USA — a turf-war has erupted between two American-as-Apple-Pie tech companies.  Perhaps you’ve  heard of them.  We have “Microsoft” on one side, and another named “Google” in the defensive zone.

Microsoft has been incredibly vocal with its accusatory stance against Google, suggesting their business is anti-competitive.  Microsoft is no stranger with being accused of monopolistic practices, back in the late-90s going through that themselves.

The thing that stands out to me is whether Microsoft should care or not.  Let’s be fair, these two companies are like Goliath vs. Goliath.  While there is healthy competition in the technology space, each is successful and has their niche in their own right.   While they have similar products, typically Microsoft and Google target different populations but are potentially each other’s biggest competition.

I can’t say whether Microsoft is simply picking on Google because they can, but it seems interesting to me that several outlets today have picked up the idea that Microsoft is encouraging victims of Google to file complaints with regulators on their anti-competitive practices (an idea, that by the way, Microsoft is denying).

It appears as though Google is getting their licks in the media — you know, the whole saying of building something up just to tear it down, etc etc.   And with it’s trouble in China, along with its Google Books drama in the U.S., Microsoft’s deputy general counsel Dave Heiner also wrote in a blog post today that “Google’s way of working with advertisers and publishers makes it hard for Microsoft’s competing Bing search engine to win search volume.”

I wonder how long it will be before Google starts taking its public licks, much like Microsoft did in the late-1990s, for being the monolith it was but it’s still standing and of course, won’t be going away anytime soon.  The same could be said for Google, as it’s going through it’s growing pains of falling out of favor.  We’ve seen evidence of this recently with public fall-out from it’s Buzz launch, which had many more “ifs” involved in its release than answers.  To me though, I think that Google will walk away from this unscathed, as they have a team of lawyers working for them to ensure that whatever may happen quickly goes away.

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Tracked.com Topics

The NEW Tech Boom

By Taryn Cooper, at 5:48 pm on December 21st, 2009

Inevitably with the end of the decade near we’re going to hear about Top Ten lists ranging from television shows to albums and now with technology events, according to this post from Tech Republic.  No doubt, technology drove much of the economy over the past ten years, and it is far from bottoming out at this point.

At the end of the year 2000, we saw the tech bubble about to burst, and it’s almost literally come full-circle in this year.  Possibly the biggest the-more-things-change-the-more-they-stay-the-same story of 2009 was that AOL went public,  spinning-off from Time Warner officially earlier this month.

One of the most intriguing stories in tech-media is the advent of social networking sites.  I would love to see the statistics on it, but I am sure there is a high percentage of folks using MySpace, Facebook and Twitter on a daily basis, showing just  how much technology has evolved in the past 10 years.  In fact, an article came out today on Twitter, and how they are in-the-black since it’s 2006 inaugural year.  Remember how long it took tech-retail stalwart Amazon.com to return a profit in the early part of the decade?

Google has also done its part to change the face of technology as well, after going public in 2004.  They’ve been incredibly acquisitive, buying such “hot” technology properties as YouTube and AdMob.  Except for today, when Google almost announced a deal where they would acquire customer-ratings service Yelp.com, however the deal reportedly fell through at the last minute.

Ten years ago, no one had ever heard of “smart phones,” let alone owned one.  Mostly anyone who uses a cellular phone has some kind of  “smart phone” ability, mostly made by Research in Motion or Apple.  Motorola emerged as the Phoenix out of the ashes with its new Droid product this year, making the smart phone choices numerous.

At the end of 2000, websites were shutting down and the “old economy” was thumbing their collective noses at the idea of the “new economy.”  What we’ve seen however in the last ten years is that it’s not only resistant, it has evolved and looks like it is here to stay.  Most of us should be interested to see what is going to happen in the next ten years.

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News

Market Wrap – SnP 500 at 1,000 and Clunkers breathe life into Ford and GM

By Robert Perrego, at 4:37 pm on August 3rd, 2009

The Big Round Number Theory came true with 1,000 on the S&P 500 drawing the market like a magnet the last few trading days.  Today the S&P 500 not only traded 1,000 but traded through to a high of 1003.61 before backing off and closing at 1002.62.  Talking heads on CNBC are mentioning 1,120 as the next level to be reached as that would be a 50% Fibonacci Retracement from the 1,576 highs of October 2007 to the 666 lows of March 2009.  For more on Fibonacci see the Market Wrap from July 24th.  The S&P 500 has rallied 50% from that 666 low adding 336 (ok, real close) and once again the Fibonacci 50% raises its head.

There were three other big pieces of news today concerning Clunkers, Taxes and Apple’s Board.  The U.S. Governments Cash-for-Clunkers program has been a runaway hit generating sales for car dealers and manufacturers.  This program is a hit with the current car-buying public as they are getting a fat government funded rebate check and a cheaper car.  The environmentalists love it as, supposedly, gas chugging cars are being taken off the road and being replaced by gas sipping more environmentally friendly autos.  This is a great program if you are buying a car, selling a car or hugging a tree.  If you think about it though these groups of people are in the minority and what everyone else has to realize is that money has to come from somewhere – as in your tax dollars.  So, if you think this is a great program and you are not buying or selling, you are getting sold out!

Over the weekend Larry Summers and Treasury Secretary Geithner were asked if they would rule out a middle-class tax increase and they did not exactly say ‘NO’.  This caused a wave of news stories about Obama breaking yet another campaign promise.  President Obama should be careful in here – it is not like he has made good on the long list (or any) of promises Candidate Obama made just last year.

In the last piece of big news on the day, Eric Schmidt CEO of the tech gargantuan Google (NSDQ: GOOG) resigned from the Board of Directors of the consumer tech goods giant Apple Inc. (NSDQ: AAPL).  After three years on Apple’s board Eric may have finally noticed that the two companies are now producing a lot of similar products including browsers (Chrome vs. Safari), cell phones (Android vs. iPhone) and the recent dust up after Apple would not let a Google app be sold through its iTunes hub.

On the economic news front the ISM Manufacturing Index almost, ALMOST, showed expansion in that beat down sector.  The way this index reads is above 50 means expansion and below contraction.  This morning the number reported in at 48.9 above the expected 46.5 with the prior number being 44.8.  Definitely headed in the right direction.

The dollar got hit again as after closing on Friday at its lowest levels since September showed weakness to every chart reader on the planet so the bears lined up to hit it today dropping the Powershares Dollar ETF (NYSE: UUP) 0.81% and this drop in the dollar fueled a commodities rally across the board.  You put a strong manufacturing number together (well a ‘less bad’ number) with a commodities rally, throw in no significant ‘bad’ news and you are going to get a rally.

New York Spot Gold was only up $1.70 at $956.20 an ounce at 4:07 p.m. est after trading up as much as $8 an ounce.  Gold is still trying to blast out from this resistance band around $950 and after that would be the $1,000 level.  NYMEX Light Sweet Crude Oil ripped up $2.13 a barrel (+3.08%, $71.20) at 3:59 p.m. est amid news that world oil supplies are running out.

OK – enough already!  Last year we got all these stories and oil went to $145 and then, lo and behold, 8 months later oil is at $30 a barrel and someone made a lot of money on the way up and on the way down.  This is all just starting to seem a bit too cute – oil is down and the economy is moribund and then as soon as things start turning around the ‘experts’ come out of the woodwork wishing there were more rotten, percolated dinosaurs around.  The Chief Economist at the International Energy Agency (IEA) in Paris states that we have only 10 years of oil left.  Someone check this guys bank accounts and look for recent large deposits please.  I have seen this movie before.

The Dow finished up 114.95 points (+1.25%, 9286.56) and the S&P 500 closed above 1,000 at 1002.63 (+1.53%, 15.15) with the Nasdaq 100 rising 24.76 points (+1.54%, 1628.12).

In the sector watch we have the top performer being energy popping 3.65% on that $2+ jump in oil with the industrial sector up 2.15% on the rise in the ISM number.  In third was the financial sector up 1.92%.  The ‘loser’ of the group was merely the sector to rise the least as today was an across the board rally with tech bringing up the rear at plus 1.31%.

Economic Reports Tuesday: ICSC Goldman Stores Index 7:45 a.m., Personal Income and Outlays at 8:45 a.m. -1.1% expected, Pending Home Sales index 10 a.m.

Earnings Tuesday: AYE (0.43) before the open, ADM (0.45) bto, BMC (0.49) after the close, SAM (0.62) atc, CHD (0.79), ED (0.49), DHI (-0.23) bto, EMR (0.57) bto, ETR (1.26), HCP (0.51) bto, ICE (1.13) bto, KFT (0.54) atc, MLM (0.77) bto, NI (0.01) bto, PZZA (0.34) atc, PPL (0.40) bto, RTI (-0.02) bto, SXE (0.41) atc, TM (N/A) bto, AUY (0.09) atc

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News

Market Wrap – Apple and Starbucks do the Heavy Lifting, Nasdaq Up 11th day

By Robert Perrego, at 5:00 pm on July 22nd, 2009

A split market today finished with the Dow and S&P 500 down while the Nasdaq, with help from Apple and Starbucks, closed in the green for its 11th straight day.  The stream of positive closes for the Dow Jones Industrials and the S&P 500 ended today with bad earnings reports from Morgan Stanley (NYSE: MS) and Wells Fargo (NYSE: WFC).  Apple (NSDQ: AAPL) gained $5.23 today (3.45%, $156.74) and Starbucks (NSDQ: SBUX) jumped $2.70 (18.37%, 17.39) on a solid earnings report.

Morgan Stanley saw its revenues fall 11% to $5.41 billion from Q2 2008 revenues of $6.11 billion.  Overall the company reported a loss of 74 cents a share related to repaying TARP funds and in total the company lost $1.26 billion or $1.10 a share.  Well Fargo reported net income of $3.17 billion and their shares dropped 90 cents or 3.55%.  Wait?  The company made over $3 billion and the stock went down?  Wells Fargo also reported that non-performing loans increased 45% to $18.3 billion.  This means that borrowers stopped making payments on about $5.7 billion worth of loans.  Wells Fargo set aside $700 million for loan-loss reserves which is about 12% of their newest raft of non-performing loans.  I wonder how much they would have had to write off if we were still reporting non-performing loans amid mark-to-market times, as opposed to whatever mark-to-model they are now using, and how much their stock would have dropped if their $3 billion plus profit quarter had been required to take a big loss in accordance with this new chunk of deadbeat borrowers.  Ahhhh, semantics right?  No matter the accounting you use its all the same.  Has anyone seen that accountant from Enron lately?

The Dow closed down 34.66 points (-0.38%, 8881.26) and the S&P 500 also closed in the red for the day down 0.51 points (-0.05%, 954.07) while the Nasdaq 100 added another 11.99 points (+0.77%, 1565.00) for day number 13 of positive returns.

Looking at the sectors moving today shows that the only sector down today was energy, losing 1.29%.  Consumer cyclicals were up 0.96% and tech rose 0.92%.

Obama is going to be on TV tonight.  Surprise!  Damning the torpedo’s and any fear over over-exposure, Obama will be making another pitch for his health care bill which has run into resistance from not only the Republicans, but the Blue Dog Democrats and the TV networks.  The networks, always just the terrible capitalists that they are, may be starting to get just a bit tired of preempting all those programs they pay all that money to develop for another stumping politician.  Obama was bumped from 9 p.m. to 8 p.m. as NBC seems to think Susan Boyle, a singing Brit, is more interesting than the umpteenth speech by Obama about his health care plan.  This is great news as now I don’t have to set my DVR to see both the singing Brit and Obama’s speech.  Happy days are here again.

Oil fell 21 cents on inventory data today and a barrel of light sweet closed at $65.30.  Gold spiked during Bernanke testimony in and was up as much as $6.90 an ounce before dropping back to $951.50 at 4:39 p.m. est.

eBay (NSDQ: EBAY) reported after the close today posting 25 cents a share on revenues of $2.1 billion vs analyst expectations of 36 cents.  Excluding items (I love it when I read this, lets ask the Enron accountant what he thinks) eBay beat the 36 cent number coming in at 37 cents a share.  In the same year ago period eBay made 35 cents a share and $2.2 billion.

TRADING UPDATE: eBay trading at $20.59 up $1.14 from the close on earning report at 5:07 p.m. est.

Qualcomm Inc. (NSDQ: QCOM) reported after the close with lower profits of 44 cents a share down form 45 cents a year ago.  Adjusted earnings (the Enron guy again?) were 54 cents beating expectations.

TRADING UPDATE: QCOM trading $46.05 down $2.44 from the close at 5:10 p.m. est.

Tomorrow we get earnings from: MMM (0.94), AMZN (0.32) after the close, AXP (0.26) atc, T (0.51) before market open, BIDU (1.44) atc, BRCM (0.24) atc, BMY (0.47), COF (-0.73) atc, CELG (0.46) bmo, CME (3.23) bmo, DO (2.64), F (-0.52) bmo, KMB (0.95), LH (1.27) bmo, MCD (0.97) bmo, MSFT (0.36) atc, NFLX (0.50) atc, NEM (0.47), NOC (1.29), NUE (-0.59), POT (0.69), HSY (0.35) bmo, UPS (0.49) bmo, WYE (0.85) bmo

Economic reports tomorrow: Jobless Claims 8:30 a.m. 560,000 expected, Existing Home Sales 10 a.m. 4.85M expected

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Market Wrap – DuPont, Blackrock hit Lower Targets, Market all over the place

By Robert Perrego, at 4:47 pm on July 21st, 2009

The earnings flow kept coming and lower estimates were beat once again as the market focused on Bernankes testimony before the House.  The Market opened higher out of the gate but faded on testimony by Bernanke that rates would need to be kept low for a long period of time as weak economic growth is expected.  This testimony caused interest rates to drop and the bond market rallied as lower rates for longer means higher bonds prices for longer.

A group of banks posted weak earnings with Regions Financial (NYSE: RF) missing with a loss of 28 cents a share vs an expected loss of 22 cents.  State Street Corp (NYSE: STT) posted a whopping loss of $7.12 a share while BlackRock Inc. (NYSE: BLK) beat their expected $1.59 a share with $1.75 but down from the $2.00 a share they earned a year earlier but hey, at least they are still in the same ballpark unlike many other companies posting earnings that are a mere fraction of previous YoY comparisons.

Pentair’s (NYSE: PNR) net fell 77%, Freeport-McMoRan (NYSE: FCX) dropped 38%, DuPont’s (NYSE: DD) net fell 61% as we are starting to see a stream of companies that are beating these lowered numbers but showing top line business activity and sales that are a fraction of past years take.

The question is how expensive is the market now?  If the earnings have been cut by 70% while the stock is only down 35% that stock just got twice as expensive on a P/E basis.  Many businesses have cut personnel and are getting leaner and meaner which preserves some of their profits, but they are also doing a lot less business.

The Dow did swing around mostly on Bernanke’s testimony and ended up putting in a strong last ten minutes to close up a respectable 67.79 points as everyone is afraid to be left behind by this rally, so the money is chasing the stocks up.  All three indexes finished in the green with the S&P 500 gaining 3.45 points and the Nasdaq 100 up 9.01 points.  Small gains but gains nonetheless.

Oil tacked on 74 cents a barrel and closed at $64.72 and Gold finished pretty much flat at $948.70 at 4:10 p.m. est.  Nothing to see here folks, move along.

The sectors finished with the consumer non-cycs leading the pack up 0.57% and that does not bode well as this is a defensive sector.  Energy placed second at +0.53% and the laggard was financials down 0.92%.

We now have had 7 straight up days on the Dow and the S&P 500 with the Nasdaq posting its tenth straight gain.  No matter how you slice it this means more money in investors pockets and that’s not a bad thing.  The question is will we start playing ‘last one outs a rotten egg’ one of these days.  As Bernanke mentioned today, the recovery is expected to be tepid for quarters to come and as the net earnings of many companies illustrates, there is not a lot of business being done out there right now.  The talking heads on TV seem to bring up ‘jobless recovery’ about every 5 minutes or so, and if there are no jobs coming back anytime soon where will the money be made to boost these businesses sales and profits?

Where is our next economic growth engine?  Obama says it is green energy and health care but I don’t see how working in the health care industry produces products we can export or that contribute to building a growing economic base.  Those jobs just keep people a little healthier which is not a bad thing, but which does not contribute directly or as a multiplier for the economy as a whole.  Those people will just be healthy AND unemployed.  As far as green energy jobs don’t bet on it.  First the technological breakthroughs have to happen before whole industries can be built in order to create significant economic growth.  Past economic growth engines have been technology, the Internet, telecoms and on Wall Street.  Wall Street, as we all know, is limping along these days and not hiring a whole lot and the funny thing about technology is that its aim is to do more with less – and yes that means less jobs too.

Advanced Micro devices (NYSE: AMD) just posted a larger loss than expected after the close losing 62 cents a share vs the expected 47 cents.

AFTER MARKET UPDATE: AMD TRADING DOWN AT $3.62 in the after market at 5 p.m. est down 46 cents from its 4 p.m. close at $4.08.

Apple (NSDQ: AAPL) came in strong after the close with $1.35 a share vs expected $1.17 with revenues of $8.34 billion vs $8.18 expected.  Apple sold 2.6 million Macs, 10.2 million iPods, 5.2 million iPhones with a gross margin of 36.3%.   OK – so i stand corrected, someone is making money and doing some good business.  If they could all just be like Mike (Apple)!

AFTER MARKET UPDATE:  AAPL TRADING UP AT $157.10 at 5 p.m. est in the after market – up $5.54 from today’s close at $151.56.

Well let’s see if Apple can save the market tomorrow.  Looking at the top sector being non-cycs today and after 7 straight up I don’t think even Apple can do it – but you never know.  That is the beauty of the markets.

Earnings for tomorrow: APD (0.98) before the open, ATI (0.03) bto, MO (0.47) bto, BK (0.53) bto, BCR (1.21) after the close, CTXS (0.38) atc, ETFC (-0.32) atc, EBAY (0.36) atc, LLY (1.02), ITW (0.34) bto, KEY (-0.41) bto, ISRG (1.25), MS (-0.49) bto, PEP (1.00) bto, PFE (0.48), QCOM (0.52) atc, RJF (0.20) atc, STJ (0.63), STI (-0.52) bto, BA (1.21) bto, USB (0.10) bto, WFC (0.34) bto

Economic reports:  MBA Purchase Applications at 7 a.m. est and Bernanke testifies in front of the Senate Banking Committee at 10 a.m.

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