In an article on Wall Street Journal, Dan Gallagher reported that despite of the fact that Google Inc (NASDAQ:GOOGL) has disappointed investors with its latest quarterly, it still remains the web juggernaut. It generated $22 billion in operations last year. There is no one to challenge Google Inc (NASDAQ:GOOGL) in ads business, at least for the short term.
The source said that the problem with Google Inc (NASDAQ:GOOGL) is that it does not disclose much details about its mains businesses. No statement or prediction can be made about Youtube and Android, two of the strongest components of Google businesses. Google Inc (NASDAQ:GOOGL) robots does not have the monetizing potential for Google, the source thinks.
Gallagher thinks that investors will not bet on Google Inc (NASDAQ:GOOGL) until the company shows some strong numbers. Google will have to reorient its mobile strategy and work on its core business. Google is heavily investing on areas that have zero monetizing potential in the short term. For example, genomics, Space, DNA sequencing are some of the areas Google Inc (NASDAQ:GOOGL) is interested but investors are not.
The source mentioned some numbers from the latest Q4 report of Google Inc (NASDAQ:GOOGL). Paid clicks grew by 14% year over year whereas the Wall Street’s expectations were around 17%. Paid clicks is always a key metric in determining the ads business of Google Inc (NASDAQ:GOOGL).
The source also claimed that in the past few months, Google Inc (NASDAQ:GOOGL)’s market value came down by 14% to $55 billion, which depleted the expectations from the company for the quarter. Otherwise, the fallout from investors would have been huge.
David Tepper’s Appaloosa Management Lp owns around 600,000 Google Inc (NASDAQ:GOOGL) shares.