The two biggest challenges that Google is facing are that ads are tough to show on smartphones (because they are narrow) and more and more searches come from smartphones, and that Facebook is competing harder and harder in an ad based world that Google cannot enter.

The biggest opportunity I see for Google is to turn Motorola around and have an integrated/open ecosystem that catches up with the closed Apple ecosystem. I am not argue that Google makes Android a closed system like iOS and only sells its smartphones through what is now Motorola. What I am saying instead is that Google could be in the position that HTC or Samsung are today. It could make the best Androids and use a hardware OS combination to make money a la Apple.

Android is bigger than iOS and yet Apple is worth over twice as much as Google in market cap. iOS is 90% of the value of Apple. Android is considered to be less than 10% of the value of Google. This is where Google’s biggest upside resides in my view. In an successful implementation of the Motorola acquisition.

In any case I think that there are 3 companies that are a must have in anyone’s portfolio now and they are Google, Apple and Amazon, in proportions to their market caps. Facebook would also be a must have but not at 100 times earnings. I should also clarify that I have Google, Amazon and Apple in my portfolio and have for a while.

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juan on March 18, 2012  · 

Fully agree.
The sinergies with Motorola are high, not only in the mobile phones, also in the connected home business, also part of Motorola Mobility.
As former Mororola employe I can say that Motorola is one of the few companies that can proudly say that invented a lot of things, and people likes this approach. Unfortunately the management after the founder family was out was not very good, typical not-founder CEOs, more worried about how to get stock for free than preserving the spirit of the company.
In my opinion Google has to take direct leadership on Motorola, and work fast, a lot of engineers in Motorola are looking forward it, because is the only way to be working in a company that they can say proudly that is “doing things”.

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Ali Parandeh on March 18, 2012  · 

Shouldn’t Google have purchased HTC?

As you say the trick is to come up with a software hardware combination that is as good as its rival iPhone.

Personally everyday I contemplate the move from HTC to iPhone, iPad and iMac but I like control over my hardware and software so I have resisted the move up until now but I know that by year end I will be running both systems side by side.

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Martin Varsavsky on March 19, 2012  · 

HTC is a fantastic company, better than Motorola these days for sure. But too expensive as well for Google to buy.

Endika on March 19, 2012  · 

It is always a question of value and price. They are great companies, no question, but I am not sure it makes sense to buy at PER 134 (e.g. Amazon). Are you really getting the value you pay for at those ratios? The market is discounting a massive growth already, so how much higher can it got. Same goes for Facebook.

Maybe people would like to explore other options for investing, not so sexy, but from a investment view point, I think more attractive (e.g Portugal Telecom).

M my two cents to the discussion.

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Jose on March 19, 2012  · 

If Google tries to compete with HTC and Samsumg with Motorola, they will go the Windows way or Samsumg could go his own way(Bada is mature enough).

We are going to see the tablet wars now. Microsoft is coming second(or third) and they don’t like it(it breaks their computer monopoly) so Nokia is pushing hard to create a MS iPad. Ubuntu is also working hard on Unity for tablets. We will see who wins the battle of porting a real OS into tablets(like the old windows transition it started as a joke of operating system). Apple does it step by step, MS and Linux abruptly .
We will see witch approach wins at the end of the day.

Apple is too high, if you want to invest, invest on something iOS devices need, like accelerometers, gyros, or OLED screens companies. Apple(aka Steve Jobs co.) also lost his visionary,his genius, as someone said, there is good people in Apple but there is good people on their competitors too.

IMHO facebook is overvalued 5x times. When shareholders demand impossible returns it will get tough. There is not enough (people with devices or disposable income) people in the world to make facebook income match their valuation in the future. A huge bubble waiting for a pop(brought to you by Goldmand Sachs, the masters of financial scam).

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Elliott on April 5, 2012  · 

AAPL, AMZN, GOOG fit the old Peter Lynch stock picking system. Buy the stocks of what your kids are using. Go into any mall in USA, & the most crowded store by far is AAPL. Go into the Sony store & the staff have time to have an espresso [or 2] with you. Go to Best Buy to check out the latest electronics & then go on AMZN to make your purchase. How many times do you google [it’s been a verb for a few years already] for info every day?

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