Youtube TV for the new generation
YouTube growth is re-accelerating. Watch time on Youtube is up 60% year on year the fastest growth in two years. Mobile watch time has more than doubled from a year ago. I personally spend a lot of time on the popular on YouTube Australia channel. The average mobile user is even more committed spending more than 40 minutes per session. The number of Youtuber's earning 6 figures is also up 50% on the year. Don't worry I won't be quitting my dayjob but if you're interested they have production facilities all around the world (see below) no need to bring your cat the facilities give videos are more professional feel. Youtube's user growth has been tremendous they will also have increasing pricing power as TV advertising moves online. GOOG's prices for ads that users don't skip on Youtube is currently lower than GOOG's desktop and mobile ads. It's a big opportunity I have to keep reminding myself that Youtube is still only 10 years old.
Source: https://www.youtube.com/yt/space/
Show me the money
With $70 billion in cash (15% of market cap) the new CFO hinted at a more efficient use of the balance sheet potentially taking on debt to buyback shares. She made it clear the priorities are capex, M&A and then potentially capital return. No clear announcement but the tone was constructive it seems like a similar situation to Apple before their capital return a year or two ago.
There has been concern that the smaller screens on mobile will make it more difficult for GOOG advertising especially as mobile searches now outpace desktop in 10 countries. It's true that there can't be as many ads but mobile ads seem to be more effective. Searches on mobile phones tend to happen when people are out in stores highly influencing in-store sales. GOOG is doing their best to get credit for these sales disclosing that Target found that one third of their paid mobile ads resulted in a user visiting a store.
Google passes its toothbrush test
GOOG CEO Larry Page is famous for conducting a toothbrush test for their investments. An investment has to be meaningful enough to be used once or twice a day like a toothbrush. GOOG has plenty of these investments Google search, Youtube, Android, Chrome and Google Maps I use these every day along with over 1 billion users. They also have up and coming products like Google Play, Nest and their cloud platform which hopefully will join the list. GOOG has been trading at an discount to the Nasdaq all year the rise in the past week means it is trading at 21.5x earnings not as cheap as it was but still attractive for a company that dominates a lot of our time.
Jason
Decisive has a postion in Google (GOOG) stock.The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.
