Postponing the conference call PLUS Amazon vs Google
I’m afraid I just don’t feel up to doing the call after all. I can’t hardly talk without catching a coughing fit, so let’s postpone the Q&A conference call until tomorrow at 2pm ET.
In the meantime, we edited some of last week’s Q&A transcript down and made into an article for Marketwatch:
These days, Google versus Amazon is a bigger story than Google versus Apple. And Amazon might have more long-term upside than either Google or Apple. But I continue to hold all three. Here’s why.
Google GOOG, +1.00% is down from its recent all-time highs, but so is the broader market. I am surprised the stock hasn’t been hit more than it has, as Google’s headlines for the past week have been dominated by Google and its struggles with advertisers. A lot of big advertisers, from Verizon VZ, -0.45% to AT&T T, -0.05% here in the United States, to others in Europe and the rest of the world are frustrated with Google showing advertisements on what is perceived as hate or terrorist-related videos.
Frankly, I am shocked that Google is still having that problem. I remember when YouTube was launched 12 years ago, and the company had so many problems with copyright content being uploaded, and major media companies were coming down hard on Google after it subsequently bought YouTube. Within weeks Google had software that was able to root out all that copyrighted content. Here we are 12 years later and Google’s entire business model and cash flow rests on ads and ad networks, and this same issue apparently has not been solved. They are still having issues with ads being shown on places they shouldn’t be.
Just last week, I trimmed my long-held Alphabet. Alphabet could catch a doghouse effect for a while. You know, the pendulum swings back and forth, and right now it’s looking like it could be swinging against Google. What the market is willing to pay for Google’s earnings is bigger than what it will for Apple’s AAPL, -0.07% earnings, but for now that multiple might contract for Google and expand for Apple. We have seen that kind of interplay between those two stocks over the years.
But I continue to hold a core position, as I have since its IPO, because in the grand scheme of things, Google is very much about Android and the internet of things. Google browsers, self-driving cars, other ventures and search ads are all part of it too, of course.
The biggest threat to Google isn’t Apple. On the ad and search side and the Android side, the biggest threat is Amazon AMZN, +1.71% and its Alexa device, as I’ve talked about during the past few months. Amazon is one of our biggest holdings.
In coming years, we’ll all be talking to our smartphones and asking questions rather than typing in queries. Likewise, I expect Amazon to try another shot at the smartphone game, using an Android operating system, but Amazon will have built the smartphone from the ground up to be Alexa-centric.
The Amazon world has become its own ecosystem from Alexa, to Amazon.com to the Amazon App. The consumer side of Amazon is stealing a playbook from the Apple ecosystem concept. The Amazon ecosystem is in the very early stages.
The upshot is that I think you want to continue to own both Google and Amazon for the long term. But I think there’s more upside potential in Amazon. In fact, I think Amazon could be another dark horse that ends up being the first trillion-dollar company. (It’s now worth $403 billion.) I continue to hold both Amazon and Google in my personal portfolio.
P.S.: On May 17, I’ll be giving my talk “Flip It: You’re Doing It All Wrong” at the Las Vegas Money Show. Click here to register.
