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(Reuters) – Investors have muted expectations for Google Inc’s second-quarter results, as economic clouds and shifts in the company’s strategy dampened hopes that it will beat Wall Street estimates.
At least three analysts have cut financial estimates for Google in the run up to its second-quarter earnings report due late Thursday.
“There’s no question that sentiment going into the quarter is much lower,” said Cowen and Co analyst Jim Friedland.
With fears of a double-dip recession and ongoing worries about the European debt crisis, Wall Street is taking a cautious view on the Internet powerhouse, which counts Britain as one of its biggest overseas markets.
Google’s future in China, where the company’s license was recently renewed for one year, is also a concern for investors.
Investors will also focus on operating expenses and headcount after Google made eight acquisitions during the quarter in addition to the $700 million deal to acquire online travel software company ITA Software announced July 1.
“…a large uptick in expenses could create concerns for investors looking for the company to maintain or increase margin in 2011,” UBS analyst Brian Pitz wrote in a recent note to investors.
Google has beat Wall Street revenue expectations in five of the past seven quarters and exceeded profit estimates in each of the past seven. But its shares have sold off after its last two better-than-expected earnings reports when, analysts said, some investors’ expectations of blow-out results were missed.
The average analyst expectation according to Thomson Reuters I/B/E/S calls for Google to generate net revenue — which excludes costs that Google pays to partner websites — of $4.99 billion in the second quarter, down roughly 1.4 percent from the first quarter, with earnings per share of $6.53.
Estimates from Thomson Reuters StarMine, which places more weight on recent forecasts by top-rated analysts, forecast revenue of $4.99 billion and a EPS of $6.57 – a relatively minor amount of upside by Google standards.
“In previous quarters, when foreign exchange wasn’t that big of an issue and macro conditions were relatively stable, all the checks (that analysts made with Google’s customers) were coming out strong, so the numbers kept going up ahead of the quarter,” said JMP Securities analyst Sameet Sinha.
Still, with shares now trading at much lower levels and second-quarter estimates having come down, JMP’s Sinha says the stock is under less pressure to outperform on Thursday.
Google’s stock is down roughly 22 percent from its 52-week high of $629.51, though shares have rallied more than 13 percent since the start of the month, closing at $491.34 on Wednesday.
Meanwhile, Google’s Android smartphone operating system software has continued to make headway. Roughly 160,000 smartphones featuring Android software are now shipped every day, up from the 60,000 units-per-day rate announced in February, Google said.
The company’s plans to become an online phone retailer have fared less well, with Google pulling the plug on its effort to sell the Nexus One smartphone through its website in May.
And while Google shares got a bump earlier this month, after the company said its license to operate a website in mainland China had been renewed by the Chinese authorities, analysts question Google’s business prospects in the world’s largest Internet market by users.
Kaufman Brother’s analyst Aaron Kessler said he hoped to get more clarity from management on the sustainability of Google’s new tack of providing Chinese websurfers a link to an uncensored search site in Hong Kong, as well as details about changes in Google’s market share and ad business there.
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Google quarterly profit almost doubled in Q3, with an increase of 92% while gross revenue rose 70% to $2.69 billion.
Here’s an overview of where that revenue came from:
Google Sites Revenues – Google-owned sites generated revenues of $1.63 billion, or 60% of total revenues, in the third quarter of 2006. This represents an 84% increase over third quarter 2005 revenues of $885 million and a 14% increase over second quarter 2006 revenues of $1.43 billion.
Google Network Revenues – Google’s partner sites generated revenues, through AdSense programs, of $1.04 billion, or 39% of total revenues, in the third quarter of 2006. This is a 54% increase over network revenues of $675 million generated in the third quarter of 2005 and a 4% increase over second quarter 2006 revenues of $997 million.
International Revenues – Revenues from outside of the United States contributed 44% of total revenues in the third quarter of 2006, compared to 42% in the second quarter of 2006 and 39% in the third quarter of 2005. Had foreign exchange rates remained constant from the second quarter through the third quarter of 2006, our revenues in the third quarter of 2006 would have been $19 million lower. Had foreign exchange rates remained constant from the third quarter of 2005 through the third quarter of 2006, our revenues in the third quarter of 2006 would have been $35 million lower.
Greg Sterling has highlighted some of the conference call which was transcribed by Seeking Alpha:
What we are concerned about is that if we continue to develop so many new individual products that are all their assorted silos, you will have to essentially search for our products before you can even use them. And then you will have to search before you can do a search, in many cases.
Instead what we’re doing now is we are trying to create the horizontal functionality across a range of products, across media types and so forth. For example, I mentioned already Google Apps for Your Domain, and that in a sense is a product, but really it just combines a whole bunch of other offerings together, seamlessly integrated together so they can work well for an organization.
Another example which we haven’t gotten quite up and running yet, but when you want to share your documents or your pictures or your videos, it would be nice to have the exact same way to share all those things, to have all that functionality available across all of those media types in the identical way, rather than developing sort of one-offs for each of those products.
There’s a whole set of initiatives that’s now going on in the Company to make our product offerings simpler and more consistent for all of our users.
Jonathan Rosenberg on AdWords “Starter Edition”:
Jonathan Rosenberg again, on Local:
But if you want to check some out, type polo store, New York City. You can also a look at some of the printable coupons that Larry mentioned if you type in “carwashes in Mountainview”.
Mark Rowen – Prudential
And how are some of the monetization efforts in local going? I know you were doing some testing with some retailers, putting their names in the bullets on the Maps and things. Can you talk about that at all?
It is a real portion of our revenue. I can’t give you specifics in terms of percentages, but it is one of the things that we are tracking very, very carefully and that is reasonably significant at this point.
Global economies are continually changing to accommodate new technologies. This generates fresh prospects for employment, intellectual stimulation, and economic gain. It was common practice when people seldom left their offices. However, the current climate favors those who wish to work remotely from home because of the prevalence of globally accessible internet service providers like Uber.
Back in the day, employees were expected never to leave their desks. The growth of the sharing and gig economies can be partially attributed to these causes. There are numerous similarities, but this article will focus on the differences.What is a Sharing Economy?
This economic model is predicated on utilizing a centralized online marketplace that facilitates the trading of goods and services between individuals. That way, people may pool their resources and earn money from unused possessions. The development of the Internet has facilitated communication between individuals who have assets to sell and those looking to buy those assets.
One way in which Airbnb has facilitated the leasing of empty homes to tourists is through its host community. As a result, vacationers may reserve rooms at lower costs than those at hotels, while homeowners can make money off of their spare space. There are many additional players in the sharing economy, including the ones listed below.
Freelancers and telecommuters might find a shared office space to do their business. You may find places like these throughout the world. The time spent on each work is correlated with the corresponding hourly rates.
The interest rates offered by money lending platforms are lower than those offered by banks and other similar financial institutions. These online marketplaces compete with conventional banks by providing more competitive interest rates.
Online venues for independent contractors Using sites like Upwork, clients may communicate with service providers in any part of the world.
The following are examples of potential problems that might develop in a sharing economy −
The absence of security for consumer information and its subsequent disclosure to other parties has prompted some concern. Because of this, the term “protection of customer data” has emerged.
Safety − Several incidents have made internet service users like Airbnb and Uber nervous about their security.What is a Gig Economy?
The nature of the economy is reflected in the ephemeral and adaptable character of jobs in the current economy. Organizations often resort to the use of the internet to facilitate the hiring of freelancers and independent contractors.
Although the gig economy offers several benefits, it is not without its downsides. Without a traditional employer, a gig worker has no assurance of receiving benefits like health coverage or paid vacation. It might be tough to get into a steady rhythm at work without a boss to check in with. This causes issues such as disruptions in one’s routine and sleeping patterns, which might have an effect on one’s mental health.Similarities − Sharing Economy and Gig Economy
Both use available resources to facilitate economic activities.
Both facilitate communication between the service provider and the people using the service.Differences − Sharing Economy and Gig Economy
The following table highlights how a Sharing Economy is different from a Gig Economy −
Characteristics Sharing Economy Gig Economy
The “sharing economy” is a type of economic activity in which consumers and companies utilize the internet to meet their needs for goods and services.
The phrase “gig economy” describes an economic system in which workers, such as freelancers and independent contractors, have high mobility and flexibility.
To put it simply, the sharing economy acts as a conduit between idle asset owners and those who can put their services to good use.
Gig economy helps to close the gap between traditional businesses and independent workers.
Added to the previously mentioned simplicity and lower prices, consumers may buy the same assets.
Among the benefits of a gig economy is a rise in the accessibility of high-quality services at competitive rates. The ease of having a flexible work schedule is great, but there are other benefits as well.
Individuals gain from a more flexible delightful work environment, while businesses enjoy cost savings from not having to pay for full-time employees or expensive office space.
There are occasions when businesses are unable to contact their staff members. The company’s operations may suffer, and employee-employer relations may worsen due to this condition.Conclusion
The phrase “sharing economy” refers to a type of business model in which goods and services are traded between individuals through online marketplaces. Connecting customers with those who have idle assets is the primary objective of the sharing economy.
On the other hand, the “gig economy” is a subset of the economy that aims to bridge the gap between employers and freelancers via the use of independent contractors and temporary workers.
Virtualization, cloud computing, and service oriented architectures (SOA) are all driving change in the vital data center management and business intelligence markets. These products, which connect mission critical systems to each other, are moving to the Web as software sublimates, turning assets that were once physical into services delivered over the Web.
Many of these products are built by young insurgent companies and not by the incumbents (but not all — Cisco’s doing it too).
AccelOps is one such young and upcoming company, founded in 2007 in Santa Clara, California.
Today, AccelOps announced that its datacenter management solution is available as a SaaS offering and as a virtual appliance for customers using VMware.
“The majority of folks we talk to have VMware already,” Scott Gordon, AccelOps vice president of marketing, told chúng tôi “Obviously, we’ll look at Citrix and Microsoft immediately down the road.”
“Measuring performance is more important than ever before as IT departments have to meet SLAs, even on their internal cloud,” she added. “Virtualization adds another level of complexity, but we have the visibility managers need to deliver data and avoid resorting to manual measurement.”
The company is also disrupting prices, Gordon said. “The customers we go after are in the mid-tier market. The majority could not fathom spending $250,000 or $100,000 on products from the legacy system vendors.”
The price of AccelOps’ eponymous product, in contrast, starts at $25,000 and rises as customers add capacity, he added.
The product starts by polling the network, building a list of devices using data obtained through SNMP access. SaaS customers download a polling app into their VMware environments, and customers using the virtual appliance already have it when they install AccelOps.
“It knows the standard and backup configurations and it knows what’s running and not running. It captures flow data to measure network resource utilization,” said Gordon. “For hosted customers, the software compresses and then encrypts data before sending it back to the datacenter.”
He added that customers can write additional rules for the product once they get to know it.Kapow’s latest Web Data Server
While data centers are the foundation of the application stack (define), business intelligence resides at the top. Kapow Technologies, which was founded in 1998, today announced the Kapow Web Data Server 7.0.
“All too often, the application or project just dies on the vine. The line of business manager says it would be great to create new products and services for customers, but IT needs months to design the architecture and specifications.”
Kapow Web Data Server changes this by using the Internet. “There are no published APIs that require coding and development time,” said Yu. “As long as the application or Web site has a browser or HTML interface, customers can access it automatically with our product.”
Although the product is easier to use than traditional business intelligence software, it’s not simple. “In terms of line of business users, a power Excel user can easily learn how to use our product,” said Yu.
Kapow relates a case study concerning a trucking company, J.B. Hunt. Kapow Technologies said that the software delivered automated access to 25 applications, combining data from customers and partners and public Web sites and delivering data to mobile devices.
The product is available now; pricing was not disclosed.
Article courtesy of chúng tôi
Software giant Oracle, now a hardware company as well thanks to its purchase of Sun Microsystems, reports earnings on Thursday after the close of trading, and at least one analyst believes there will be no major surprises.
That’s good or not so good, depending on your perspective. It could be argued that Oracle’s (NASDAQ: ORCL) only significant competitor on a soup-to-nuts, hardware and software basis is IBM (NYSE: IBM). On the other hand, Oracle isn’t in a high-growth industry. Much of its growth has come from acquisitions in recent years, and there aren’t that many big targets left for it any more.
There’s also the added pressure on Oracle’s margins from Sun. As Broadpoint.AmTech analyst Yun Kim noted in a research note on the company earlier this month, Oracle currently enjoys the highest operating margin in the industry and is a relentless cost cutter.
Sun, however, is a hardware company, and hardware is not known for being a high margin business (with Apple a notable exception) and could cause “Oracle’s overall margin profile to decline substantially and it may be weighed down for some time while the company digests the acquisition,” Kim wrote.
Still, Kim expects Oracle to meet estimates with revenue for the third fiscal quarter ended February 26 of $6.41 billion, a 9 percent improvement over the second fiscal quarter and a 17 percent improvement over the same quarter last year. Oracle should report net income of $1.9 billion, or $0.37 per share.
Agreeing with Kim, a consensus survey by Thomson Reuters estimates Oracle will report earnings of $6.35 billion and EPS of $0.38.
One potential area of softness might be the benefit for currency. Recent strength in the U.S. dollar versus the Euro could likely lead to much less than the 7 to 8 percent currency benefit Oracle had forecasted for the quarter. But Kim added he does not expect weaker-than-expected currency to have any significant impact on its non-GAAP EPS.
“We believe its core database business remains solid, although certain local regions and certain verticals faced a more challenging sales environment than expected. Within its database business, ORCL’s middleware business put together yet another strong performance. We believe its application business is likely to remain lackluster,” Kim wrote in his note.
All things considered, he does not project any significant changes to projections as a result. Sun, he wrote, will not be a distraction for now. “We believe that investors are likely to focus on Oracle’s core business in the near-term and not put too much emphasis on Sun’s business as long as it continues to reaffirm its FY11 financial targets, which includes contribution from Sun,” he wrote.
Sun is expected to provide around $635 million, $1 million off from an earlier projection by UBS, and it will provide around $1.22 billion in product and services revenue next quarter, according to Kim.
The fourth fiscal quarter ending in May is traditionally Oracle’s busiest for the year. Kim projects Oracle will report revenue of $9.61 billion and non-GAAP income of $2.71 billion, or $0.58 per share.
Andy Patrizio is a senior editor at chúng tôi the news service of chúng tôi the network for technology professionals.
Editor’s note: For the latest information on the Google Panda algorithm, please see: A Complete Guide to the Google Panda Update.
Google was under a lot of pressure to make an update that cast the “content mills” from its index.
With the heavy pressure of the tech media community, spunky upstarts like Blekko calling the company out, and an acknowledgment from Google of an increase in spam on its index, the search engine giant had to act both quickly and effectively.
Their most recent major algorithm change, known in the tech community as the “farmer update,” was released with bullet speed and did a great job at getting rid of a lot of spam – but at what cost?
In any war, some inncoents will be hurt, and that seems to include the war on spam.
When the update went live, thousands of smaller sites lost some ranking, with some losing literally all SERP visibility. This was primarily seen in the blogging and e-commerce community, but the reach could be felt far and wide.
Google Fellow Amit Singhal stated that the company is aware of some fallout, and that “no algorithm is 100% accurate.”
That isn’t an excuse or escape hatch, though. Rather, it’s Singhal’s way of saying that the company knows there’s more to work on, and that they are already plugging away, aiming on bringing the algorithm “close to 100%.”
He has stated that engineers are already at work on those adjustments, building an extra “layer” on the foundation of the farmer algorithm.
While some rumors have stated that these alterations have already been made, Google has confirmed that any changes already present are minor (part of the “more than one alteration per day” that Google’s algorithm typically sees); the layer they are referring to is yet to come. In other words: “Innocents” hurt by this update will be thrown a floater in the near future!
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