You're watching...
Citi Internet Research managing director Mark Mahaney on Google’s outlook, expected earnings and whether it is still a “buy” for investors.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Google earnings out after the bell tomorrow now investors are eager to see the tech giant's results.
After that pretty significant miss in the fourth quarter and flat performance this year.
-- exactly time in the NASDAQ has been going way up for a preview what we thought we bring in the top ranking analysts' earnings estimate or.
In the Internet sector mark to -- Internet research managing director at Citi -- to see a mark well why is first of all why is it that Google hasn't had the NASDAQ Bob hasn't been able to take advantage of that.
Yeah there's a couple of factors here first they did miss earnings and revenue estimates in the December quarter so there's been a sell -- since then secondly.
There's still this overhang related to the Motorola acquisition depending Motorola acquisition are still investors scratching their head over that -- let you know we're totally viewers who may have forgotten it was a twelve point five billion dollar purchase.
Of a company that that was losing about five billion dollars over five year period so a lot of people.
Question whether it was it was worth their while the spend that much money.
Absolutely and it's an Internet company buying handset manufacturing company that.
That doesn't normally come together.
And the last thing of course there's a little bit of an overhang related to our social network -- that fear that traffic ad dollars are going to there and leaving Google all those factors have been behind the overhang that underperformance global shares today.
The second mark that you get the release in your hands about its earnings what is the number one thing you want to look at as an investor has an analyst.
You know beyond just simple revenue number and EPS number I think what the market's gonna focus on one metric more than any other is what they call the CPC trends of the cost per click.
That was a negative surprise last quarter that was down about 8% year over year we haven't seen pricing on global down year for years since 2008 recession.
And so that's what people are gonna look at I think more than any about any other metric this quarter -- -- social web sites are doing so much now.
That's why Smart people are investing so much money in that may be too much some people say but.
Is that where their competition is coming from social networks that might.
Maybe somebody logs on -- face what did you stays there finds a search mechanism there and everything else they knew they never go to Google at all.
Well that you know Google's become so broad now as up platform on the Internet and also have to think about its YouTube assets -- also wants display advertising and a lot of different web sites not just search advertising so.
You know it probably competes with a whole range of companies that also has up payments on the competes with eBay -- this -- e-commerce initiative that -- Saddam's sons of his problems of competition.
I think the one point -- missed and why we like Google shares here.
Is it cool still presents for marketers are very distinct direct marketing high.
-- actual which you can't find.
Yet in any other online had died at platform this is highly accountable -- search advertise the only Paper click you don't Paper impressions you know what's what's you know exactly what's -- and what's not that's the unique killer of Google's advertisers and it remains.
You like it enough you've got to -- rating at a price target of about 750 dollars of the final question really becomes.
Management do you like Larry Page is the CEO he of course was one of the founders did very well on its first quarter little bit of -- stumble on the following quarter.
Well you know latest -- you know this company global you tracked them for years as well there's.
The term -- this applies to this management team but you know they've -- a lot of good long range bets.
They bet on android five or six years ago that's worked out for them that bet on YouTube fired or six years ago that's worked out for -- -- -- -- -- long term bets yes it is it is a bit of a risk the quirky -- the management team but the same time look this is a stock trading at fourteen times earnings.
That tells me that there's not much risk you can buy the stock safely from -- is our number one pick in the Internet space today number one -- that's at all.
Mark thank you great to see you mark may -- -- cities -- us he's director of Internet re.
