| From: Gabriel008 | 1/30/2006 9:20:19 AM | | | | | | Google: Click fraud chaos - NY Post -Update-
According to the NY Post, Google's long-simmering click-fraud problem could explode into a billion-dollar headache for the Web giant, some Web marketing experts are warning. In fact, a growing number of Google-watchers claim the search giant is ignoring the click-fraud issue because it's so large. Click-fraud happens when surfers click on Goggle advertisers with no desire to get to the advertiser's site. Knowing Google charges advertisers based on how many surfers click on their ads, the fraudsters click on the ads simply to drive up the advertiser's costs. The fraud also falsely inflated Google's revenues. The estimates on the Street, if even close to being true, could rock the stock market darling, set to announce fourth-quarter results Tuesday. "If Google were to implement a method for stopping click fraud today, it would lose 30 percent of its revenue overnight," said Joseph Holcomb, a search marketing expert. Holcomb estimates that almost one-third of all clicks on Google's network are suspect, thanks to sophisticated software programs known as "click bots" or "hit bots" that mimic human activity and fool search engines into believing the clicks are legit. With Google set to report about $6 billion in annual revenue, Holcomb's estimate would put $2 billion in top-line revenue at risk. Google denies the problem is that large. |
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| To: Gabriel008 who wrote (10) | 1/31/2006 1:31:19 PM | | From: Gabriel008 | | | | GOOG will definitely need $2 to move up & $1.90 to $2 to stay flat.
From all the data that I've seen I believe GOOG will grow revenues app. 35% from Q3 [and this is up from my earlier estimate of 31%]. And, revenues net of TAC should fall in the $1.45b range. Now, anecdotal evidence points to at least a 30% increase in expenses [R&D, S&M & G&A] from Q3.
Net net - $2.07 to $2.11 - my best guess! |
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| From: Gabriel008 | 2/1/2006 3:02:18 PM | | | | | | Looking at the financial data from Q4 vs the Comscore & Alexa numbers this is what I get;
Financials: GOOG Web Sites +24%
Network Sites +18%
Total Revenue +21.6%
Comscore Click Trends GOOG Web Sites +22.4%
Network Sites +14.4%
Average +17.6%
Alexa Overall +18.9%
[variance of 200 basis points either way]
We’ll continue to keep an eye on Alexa and use it to approximate GOOG’s revenues. We know that GOOG sites is becoming more important & should reflect between 58%-60% of total revenues in Q1. If Internet Stock Blog posts Comscore Click Trends again we can also use these stats – although they show Network sites as app 60% of clicks, the reverse of the revenue picture.
Since GOOG sites is growing as a % of total revenue TAC should continue to go down – probably 32% in Q1 from 32.8% in Q4. Total cost of revenue should be in the 39% to 40% range. |
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| From: Gabriel008 | 2/1/2006 8:44:30 PM | | | | | | | GOOG management indicated they would not smooth out the earnings. Definitely no massaging last quarter [q4, 05]. This means we may have the same tax treatment in q4 06. Big CAVEAT. Factor this in if they are taking less than 30% in the first 3 q's of o6. |
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| From: Gabriel008 | 2/3/2006 1:02:51 PM | | | | | | Lots of news on this crappy down day. Too bad I didn't get my order filled on those cc's yesterday.
- GOOG developing car nav system w/nvidia for Volkswagen
- Sequoia reports decrease in stake in GOOG
- Bear Sterns removes GOOG from focus list |
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| To: Gabriel008 who wrote (12) | 2/6/2006 12:45:55 PM | | From: Gabriel008 | | | | We should keep an eye on Keyword prices as well. Fathom Online reported a 5% drop from Q3 to Q4. We should continue to see a drop in the post Xmas 1st quarter. And, this should be factored against Alxa's Reach & PV % increases from Q4.
Alexa, as of Feb 5, is +15% on Reach and +11% on PV's for an aggregate of +27.65%. Factoring out a 7% reduction in Keyword pricing I'll assume a 5% reduction in the 27.65% growth [assuming this holds for Feb & March - highly doubtful since the previous 3 months included November & December].
Therefore, 22.65% rev increase with a 32% TAC or $2.615B gross and $1.778B net revenue. Other COG 8%; Operating expenses 23%; Stock based comp 3%; Taxes 10% [30% rate]; and Avg shares outstanding 305mm. NAT Profit $627.4. EPS GAAP $2.06, EPS Non GAAP app $2.20-$2.25 vs a Reuters of $2.00 |
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