Google’s average share for past 3 months was roughly 84 basis points higher than JAS’06 and roughly >20% vs. last year. Besides search engine share, other key thing to note is the jump in Adsense content, solid >22% growth vs. last quarter.
One other data point, to review in conjunction, is the search engine market share and its growth so as to conclude something meaningful. However, in simple terms, search engine market has been growing, and Google has been growing market share in this growing market segment which may help push results above expectation.
During the same quarter, Google also added “Google documents”, free Web-based word processing and spreadsheet software to its free services. Google, Checkout – its online payment answer to Paypal, aggressively promoted during the holiday shopping season. During the same quarter, Google also partnered with Bharti Airtel of India (biggest mobile operator in India) to offer search services on Airtel Mobile.
And here comes the ultimate sensation of the quarter, acquisition of YouTube for $1.76 billion. Knowing Google and its business acumen, Google may announce something interesting that can be leveraged using YouTube. Any technology, that can promise far more targeted ads tailored to each viewer’s profile.
There maybe more news worth noticing, but I thought these were worth mentioning and actually make me more bullish than bearish.
GOOG’s Stock Chart:
It’s visible from the chart that most of the days when Google made a huge move were actually “earning” announcement dates. Since last quarter, Google price has not gone too far. In case results are positively viewed by street, Jan 31 or Feb 1 could see next price break out ($455 and $513 are support and resistance respectively). This data shows, a mere 5-7% move can easily take Google into a new territory.
For those like to use Bernie’s method, here is a little more about the sentiments coupled with some other indicators. Use it with caution. Before the trading night, you may also want to check out Shortsqueeze ranking, Days to Cover (Short Ratio), and short % of float. Higher the short squeeze ranking, the more painful it will be for the short-sellers, and hence greater the rally, if the stock beats the estimates and raises guidance
Let’s recap, so far I talked about expectation from both Wall Street and retail investors, about business and key developments in the past quarter, potential opportunities, brief mention to stock chart, and some sentiments indicators.
In the next part I am going to review what kind of option trading strategies we can employ to benefit from the event of the week.
Profitable trading, OptionPundit