Why Google is tech investor’s darling, not Apple

“Apple found legs last week, but it’s Google that really deserves the applause,” Thomas H. Kee Jr. writes for CNBC. “Google has largely held its own during the recent market turmoil — and that deserves attention.”

“Rightfully so, Google has become the darling of tech investors of all types, from institutional investors and fund managers all the way down to mom and pop,” Kee Jr. writes. “Of course, other tech stocks can rally and we are expecting Apple to climb further if longer-term support holds, but Google isn’t likely to falter unless something changes materially at the company.”

“Here’s what’s attractive about Google: It’s well diversified, its business model is open source in many ways and it isn’t directly subject to the whims of fickle consumers like Apple is because what they provide comes in all sizes, shapes, and forms — not just in a few gadgets,” Kee Jr. writes. “Apple ebbs and flows on the demand for iPhones, but Google is in much more than just the phone business.”

Read more in the full article here.

MacDailyNews Take: Tommy, Google doesn’t make phones and their only meaningful (profitable) business remains search advertising. The rest of Google’s “diversified” products/services are comprised of perpetual betas, oddities, and unicorn tears. The fact is: Google’s not well diversified at all. If search goes tits up, so does Google.

And, oh, by the way, it seems you’ve missed some pertinent news:

• Analyst: Apple iPhone took 87.4% of mobile phone profits in Q4
• Apple’s iTunes division is now nearly half the size of Google’s core business

So, bottom line: Google is the clueless tech investor’s darling.

43 Comments

  1. Bottom line… Google empowers big companies and is therefore rewarded. Apple empowers the individual and is therefore hated.

    Google is like Microsoft, they have one thing that makes money, and all the rest of their products are losers.

      1. I was not trying to define how many products Microsoft or Google have that are revenue producing, I was stating that MS has two PROFITABLE products and Google has one profitable product. In that way, the two companies are very much alike.

    1. try to get google out of your cookies ie. google analytics and 6 others. It CAN’T be done! Erase them and there back before you can close Cookies. Let me know if you succeed.

            1. Well, right now I’m on Lion with Safari 6.1.1. Your mileage may vary. Download Socks and try blowing up your caches and application/system data and log files

  2. ‘Google’ is nothing more than a lot of ‘hype’, ‘smoke’, ‘mirrors’ and ‘good fortune’. What of any real substance have they created? Their main stream of revenue is advertising based on a search engine. ‘Wow’, everyone’s darling indeed!.

  3. I wish Google never tainted Youtube by purchasing it. It’s become a valuable tool of information, via it’s users, and there isn’t anything else that compares when it comes to it’s breadth.

    MDN commentators:

    With Safari on OS X, I use Youtube with the Ghostery Safari add-on (along with AVG Do Not Track and another add-on called Do Not Track Me). Does anyone know how well these add ons work?

    Is there a iOS version of Ghostery for Safari, or an equivalent tracker blocking app that we can somewhat trust to keep Google from tracking us when using Youtube? I’d love to know other people’s knowledge on this.

    Because of youtube, I learned how to install carpet, fix my garage door opener and so many other things in a visual way that text alone cannot convey. It’s such a pity that Google owns it because I don’t trust Google business practices ever since Schmidt said:

    “If You Have Something That You Don’t Want Anyone To Know, Maybe You Shouldn’t Be Doing It In The First Place”

  4. Completely wrong. The reason Google is Wall Street’s darling (along with Amazon) is because Google takes exactly the opposite PR approach of Apple — basically everything Google is working on is publicized and promoted. Just a month ago there was a big story on Google’s Skunkworks department, where engineers are encouraged to come up with simply ridiculous ideas, no matter the cost or difficulty, and try them out. The media loved it, because they looked at it as something new, different, and of course, a story that wrote itself.

    Apple doesn’t play Wall Street’s game because Apple keeps its R&D and product development secret. And Wall Street hates that.

    1. Funny that you made the point you were talking about whether it be intentional or not.. How many of the 3 votes I see now for your post actually checked if the CNBC comments section was pulled or not? Good mini-test of media manipulation. 😀

  5. Whatever Google is, it doesn’t change the fact that any recent shareholder owning Google will get rich and a recent shareholder owning Apple will get almost nothing. If a company can generate investor interest on simply hype, that’s pretty good. I don’t know that it’s something to be banking on long-term but in the short run it’s just dandy. Apple doesn’t seem to be doing anything to show investors the company has some growth left, so what else can investors do? Should they put their money into Apple while the rest of the stock market leaves them behind? I’d say that depends on how quickly you want to make returns on your investment.
    Apple basically hit a brick wall in terms of iPhone sales growth due to Google’s Android.

    Google knocked Apple’s hat off and Apple did nothing. What I mean by knocked Apple’s hat off was that although it wasn’t a deadly blow it showed the company’s apparent weakness in a battle for strength. If I was at Apple I would have at least knocked Google’s hat off if not worse. Even as a joke, Android was a low blow for Google to cripple Apple’s mobile hardware business when it already had a successful search engine business. Maybe it’s just a guy thing but Apple carries the air of being a weakling when it shouldn’t be considered one. Investors don’t like weakling companies because they’re seen as losers. It’s all in the perception and not necessarily reality. However, Wall Street seems to run on perceptions.

    As I keep repeating over and over if Apple simply developed a search engine for iOS/OSX devices, Google would be begging for mercy and the company would not seem so invulnerable to investors. If iOS/OSX users could search without ads on a quick engine and get enough desirable hits, for the most part, they wouldn’t miss Google’s search engine. And it wouldn’t cost Apple $60 billion to get those type of results.

    I truly believe Apple is as solid as a rock and as long as they keep feeding me some dividends I’ve no reason to sell my stock. I just feel Apple could do a lot better considering the wealth it has and could easily change those perceptions Wall Street has of the company if it wanted to. Apple knows its own strengths better than I do and probably doesn’t have the need to retaliate against Google.

    I’m only looking at this from a guy shareholder’s standpoint, so I’d like to see some fisticuff action on Apple’s part. I want to see Google knocked down a peg. Not completely, but just enough to take all that shine off the company. No company is invulnerable. Apple, Google, Exxon Mobil… they’re all vulnerable if circumstances come along to make it that way.

    1. You are right, Know which companies Wall Street is using for their insiders to make money, i.e., Google, Facebook, Amazon by inflating their valuations and you make a lot of money. Apple is a company that espouse true American ideals, work hard, invent something and find a way to monetize it. Apple is not about smoke and mirrors.

    2. Google may have “knocked Apple’s hat off”, but what was Apple supposed to do? Dive into search? Just to spite Google?

      That’s why you’re not running a company.

      Apple has a very focused business model. Google is rather unfocused, with lots of groups putting out lots of (mostly half-baked) products: Office software, self-driving cars, etc. etc.

      The problem Google is going to run into over the next couple of years is that all these acquisitions it makes (most of which turn out to be losers like Motorola), and all these strange experiments into completely different products, are mostly drains on company resources. It will show up in the actual money-making Google does, like it already is: Google makes very little from all the work it puts into Android.

      Google is just the sexy pick right now because investors can point to all these Google distractions and say, “See, they’re making cool stuff!” Even though virtually none of it comes to market in a profitable product/service.

      All that means is that investors can trump up Google stock more easily than they can trump up Apple stock right now. Ditto for Amazon.

      1. I think you underestimate the advantages of having so many ‘strange’ experiments going, especially when you have the money to do so.. I know Apple is a focused company and that is good but due to that focus their view is that much smaller.. I guess you can say Apple is like a laser and Google is more like a big fishing net.. With all the things Google at least tries they have a broader ‘experience’ to patent.. That they haven’t been doing that till Apple was perceived to enforce non-sense patents like ‘curved corners’, Note I say ‘perceived’ since that is really what matters to the larger masses of investors, takes nothing away from them since then proceeding to patent everything they do.. Who knows, unless someone is watching Google’s patent applications as close as they do for Apple. There may be some issued that will essentially be ‘land-mines’ to Apple in the future when expanding to something new.

    3. I think you underestimate the complexity of creating a search-engine that returns halfway decent results basically from scratch. MSFT, for all their money and effort, couldn’t.
      Yahoo, for all their expertise and the head-start they had, couldn’t either.

      I’m pretty sure Steve Jobs toyed with the idea. But maybe Eddy Cue, while explaining the difficulties, also reminded him of the sentence he (SJ) told the boo-ing audience at the MacWorld where the 150-something million investment of MSFT in AAPL was announced: “We have to let go of the notion that for Apple to win Microsoft has to lose”.
      It also applies to GOOG, even almost 20 years later.
      You see:
      Apps are very important for Apple. If GOOG couldn’t make any (ad-) money off iOS anymore, they probably wouldn’t develop any apps for it anymore, either.
      And/Or spend more time and money on Android-apps.
      Both would be very bad.

      I’m really glad that Apple’s leadership and board consists of (mostly) grown-up men who think beyond the next quarter and have long since realized that you always meet twice (at least) in life and there’s no point at all in leaving scorched earth behind.

      1. Microsoft NEVER invested $150 million in Apple. They paid a lawsuit settlement agreement for infringing on copyrights and patents they were going to LOSE. This is outlined in three interlocking agreements that have been unsealed for years. Please quit passing on this myth.

  6. Does the author live on this planet?

    95% od googles revenue comes from advertising,.. That is called diversified?
    As opposed to apple: Hardware, software , services, entertainment and retail ! All hugely profitable !

  7. Google is not at all a tech company, it’s GR and PR company secondary in everything it does. Even if they make a lot of money (not compared to Apple) I would not call what they do a business model. A search for the new is an intrinsic human feature, but the same humans are lazy enough to see as Tom Waits put it “how it’s gonna end”. This is exactly what the mother of eternal better is using to their advantage. Noisy start and silent dissolution – is this what they calla business model. I do not buy it.

  8. Gotta say even by analyst standard this is beyond delusionary. But this is the problem everyone reacts to perceptions real or otherwise rather than realities and stock responds on phony assumptions. I mean who in their right mind can say that Google is more diversified than Apple when the iTunes business alone is half the size of Google.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.