Editor's note: The following was sent to subscribers of Sean's TechStrat Report. For in-depth trades and analysis on technology stocks take a free trial.
As readers of the Buzz & Banter
and my new service TechStrat
know, I'm a believer in Google
(GOOG) and long have been. While the headline might seem a bit much at the moment, the following is really an outline of my main thesis surrounding Google. So without further adieu...1. Android.
This solidifies Google’s growth in mobile search, mobile ad generation, and location-based marketing. I project revenues in all of the above to grow to become 25-35% of current core search within three years, and within five to six years equal or surpass traditional/core search. Moreover, it’s possible Android could become an additional, more direct revenue stream, though I'm of the mind that Google will never charge for it.2. Apple
(AAPL) iPad (and possibly Android tablet) Proliferation.
This is another key area of mobility driven revenues. While iPad users can select any search engine, Google still dominates search queries on these devices (along with other Google applications). Heck, I love my iPad, but dearly desire a Chrome browser on the device. The strength and growth of the iPhone platform has been a key source of Google’s current mobility revenues and will grow as iPads (and possibly Google tablets) become ubiquitous. My estimation is that a laptop being replaced by an iPad (or other tablet) isn't actually replaced by one iPad but more like two, three, or even four iPads. This only strengthens the ability for Google to monetize location-based services increases.3. Chrome Operating System
. Might this take 30%, 40%, or 50% of the computing OS market? Or an even higher number, and effectively supplant Microsoft’s
(MSFT) lead in computing share? Will this become the most important future valuation driver? I don't want to steal my own future thunder on this future business line and research I'm currently penning. Suffice it to say that right now my view is likely very early and contrarian on this product's potential. I'll have more on this later but let's say Chrome OS captures just 15%-20% of computing share -- that’s not a billion-dollar revenue stream but billions in revenue. This alone could be worth hundreds to a double in Google's stock price. 4. Enterprise Deployments.
There are multiple deployments/products already in the pipeline, some of which are mentioned above. But Research in Motion
(RIMM), Microsoft, and others are at risk of losing high-margin revenues in a variety of product categories. While many have talked about how much share Apple has taken from Research in Motion, my research shows that in the last 18 months Google’s Android has taken even more Research in Motion share. I think this will only accelerate as the Android platform advances at the most rapid pace in the industry. Moreover, there is growing speculation that either Research in Motion, Nokia
(NOK), or both will need to provide Android-based products or, at a minimum, find ways to utilize the Android app store. Microsoft is set to lose share in two key areas: OS as well as MS Office (it's already occurring in Office). Lastly, given Google’s strength in algorithms as well as overall database innovation, it could launch one of the best -- if not the industry's premier -- database-solutions portfolio.
5. Groupon Killer Platform.
There are very low barriers to entry here. If Groupon is worth $6 billion then Google can create a division worth at least that much should Google simply decide to monetize the home page, Gmail, Maps, or iGoogle (and other properties) with location-based ads targeting deals of the day and merchant coupons.For the other five reasons (and the one reason Google may not reach $3,000), take a FREE 14-day trial to TechStrat. Since the launch in December, Sean has averaged +11.58% gains per closed position and currently holds positions up as much as +70%. Don't miss the next big trade. Learn more.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.