Liberty

Maybe. I doubt it, because it's not really new and there's been a few of those in the past few months, but who knows? If I had to guess - knowing how much resources the shorts fighting this one seem to have - I'd say that they waited for a quiet day with low volume and sold a few massive blocks of stocks, hoping that it would drop enough to feed on itself (triggering panic among all the chartists and momentum people, stop-loss orders, etc). It probably would have been much worse if EBIX wasn't aggressively doing buybacks... But it's just a guess.

Won't withstand a patent review, too much prior art ;) Considering the kind of trivial and obvious stuff that they award as software patents by the truckload, I wouldn't be surprised if it passed...

It looks like Oracle might be in trouble, IBM has patented patent-trolling ;) http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=/netahtml/PTO/srchnum.html&r=1&f=G&l=50&s1=%2220070244837%22.PGNR.&OS=DN/20070244837&RS=DN/20070244837

Seems to be at its lowest point of the day. Yeah, I wrote my comment above just after the 10:56 drop and rebound. But obviously that wasn't the end of it...

Yeah, looks like maybe they ran out of buybacks for the day (I think they are limited to a certain volume daily). I haven't yet found any article or rumor that could have caused this.. Keeping an eye open.

Someone messing with EBIX stock again today. Quite a free fall, though didn't last long (probably triggered massive buybacks).

Interview with Chad on BNN:

Thanks for posting, Dazel. I quite like this side of their business because I figure they are much better at investing in metals & commodities than I am. I love what they own directly, but I also like that they're opportunistic about going elsewhere and investing in good people and good projects.

http://www.bloomberg.com/news/2011-07-12/byd-co-s-first-half-net-income-may-drop-as-much-as-95-on-year.html Ouch.

I initiated a position in GOOG at $482. They were selling for the first time at the price in late 2006...

This is a non-official estimate, though a pretty sophisticated one. Regardless of how many users they have exactly, it seems to be growing fast despite it being just a field-trial. What impresses me more (I have a Google+ account) is the engagement. Lots of great content, lots and lots of comments, many people writing about how they love it and are spending lots of time on it every day and spending all day in hangouts and such. That's a good sign, especially for a beta product that will get more refine and get new features over the next few months. It's also very effective to get G+ notifications anywhere on Google sites (search, news, finance, gmail, maps, etc). It'll make it very sticky. The way I see it, for G+ to be successful, it doesn't have to overtake Facebook. If it does over time, that's a homerun, but even without that, it could help make Google products better (search and ads especially) and more valuable. The asymmetric follow model mean it could replace Twitter.

http://www.fxstreet.com/fundamental/analysis-reports/gold-investments-market-update/2011/07/11/

Looks like the big damage numbers that Oracle is asking for are resting on pretty shaky legal foundations and might not hold for very long: http://www.pcworld.com/article/235076/google_disputes_damages_estimate_in_oracle_case.html

They did the same thing at their IPO and at least one more time (and I think they probably just do it for fun, but it's great for keeping the brand appealing to engineers, showing that even at the highest levels they have technical people with a sense of humor and they're not just another boring old bureaucratic business). I don't think it backfired, they lost because the others got together and bid more, not because they had round numbers.

Another reason why I'm not too worried about Bing and Yahoo (Bingoo?) is that I have access to very detailed stats from a site that has received about 500 million pageviews in the past few years. This is a site that has pretty mainstream content for mainstream users, nothing specific about the content should favor one search engine over the other. Its readers should be a representative cross-section of the english-reading internet public (which actually should favor Bing because they are more US-centric than Google so far, afaik). Looking at the stats for about the past year and a half, that site is getting about as much traffic from Google Australia as from Yahoo Search, and Google UK and Google Canada are both ahead of Bing as referrers. Google.com is 12.5 times bigger than Bing, but that's just the .com, that doesn't count the 50+ other country-specific Google sites... If you put all the Google sites together, it totally dwarfs Bing and everything else. I also have access to stats from other very popular sites (millions and millions of pageviews per month) and on some of them both Bing and Yahoo do better than on that first site, but never that great. That's partly why I'm skeptical when I see the market research companies putting Google at 65% or whatever. What matters to sell search ads is having users that actually search for something. I feel like the market research firms probably overcount people making typos in the address bar of IE and getting taken to Bing or users that type things like "facebook" in a search engine every day because bookmarks and URLs are over their heads, or maybe they have some other form of sample bias (for example, the use of tracking toolbars poses various problems...). That's why I like to look directly at actual stats from popular sites, because it shows what people who actually were looking for something and got somewhere used. So don't take this as gospel, and I realize my sample size isn't huge and could be biased, but I like having those data points. Fun trivia: On the site I'm looking at, Google Mauritius drives more traffic than Altavista (they still exist!)... and Google Malaysia drives slightly more traffic than AOL search. Update: http://www.washingtonpost.com/business/economy/antitrust-officials-probing-sale-of-patents-to-googles-rivals/2011/07/08/gIQANSlZ4H_story.html

http://dealbook.nytimes.com/2011/07/08/googles-deal-making-math/?hp Eric Schmidt on Google's acquisition strategy.

Oracle is indeed a bit scary, because as a company they are like 85% legal department, 15% engineering... (there's a good joke about that here: http://goo.gl/FbZTV ) (For those not familiar with this, see what I posted previously about patent trolling: http://blogs.forbes.com/timothylee/2011/07/07/microsofts-android-shakedown/ And some discussion of the article at a site full of programmers (it's where I found the link): http://news.ycombinator.com/item?id=2738628 ) We'll see how it plays out. Google and the handset makers aren't exactly penniless startups, so they should be able to mount a pretty good legal defense.

Just curious: Do you have a good source for these kinds of statistics? I find them here and there, but was wondering if maybe there's a more systematic way to track it.. Thx.

Buffett on bloomberg: http://www.bloomberg.com/video/72140684/ Also, this: http://www.bloomberg.com/news/2011-07-08/berkshire-spends-4-billion-on-equities-as-combs-adds-stocks-buffett-says.html

[this is cross-posted from the MSFT thread. I thought it fit better here] All right, after a (too short) night of sleep, here's the outline of how I see this for GOOG: How does Google prefer to make money? Where have they the highest margins and biggest moat? -Search ads are extremely profitable because 1) They are targeted. You know the intention of the user because they just searched for "stainless steel fridge" so if you show them ads for stainless fridges, you'll get a lot more value than if you show fridge ads on facebook where people's intention is mostly to check up on their friends. That's why some keywords are worth many dollars per click while less targeted ads are often worth fractions of pennies. 2) Ads shown on the Adsense and Doubleclick networks are also profitable, but google has to share money raised in the auction with the publishers. Ads on Google's own sites don't share any of the money. Another reason search is preferable for them. -So how does Android fit into all this? 1) In 2007 when the Google guys saw the iPhone and realized that in the future a lot more of the web was going to be consumed on mobile devices, and that they had to make sure their products were well positioned for that and that those who controlled that mobile platform couldn't harm them, they could have said: "all right, we're going into the phone business and we'll compete directly with Apple" and maybe a year later they could have had a phone like the Nexus One. They could have tried to make money from the hardware and the apps, but the problem would've been: 2) They're a software company. They don't have tons of industrial designers, they don't have a large distribution network and retail outlets, they don't have supplier relationships, etc. So they could have tried to turn the ship around and become a whole other kind of company to compete with Apple, but the problem is, chances of success would be low and if they became a phone maker, and they wouldn't just be competing with Apple, they'd also be competing against RIM, Samsung, Motorola, HTC, etc. 3) Maybe they could have licensed their OS to some of these companies, but when you want to make money from the hardware, you don't want to give your secret sauce to everybody. That's why Apple will never license iOS. But maybe GOOG could have skipped the phone and just tried to license a phone OS. Maybe that could have worked, though phone makers up to that point hadn't shown too much interest in licensing other people's OSes. And if you sell it to them, you can't price it too high or they'll go in-house, and you always have to worry that someone else will try to undercut you with a cheaper OS (windows for phones, etc) and that your phonemakers will jump ship, etc. 4) I think Google looked at that kind of business and they decided they'd rather go for maximum scale instead. When you give a quality OS for free, you know you'll get the maximum number of partners possible because you can't be undercut on price and they won't feel you are competing with them, they're partners and if they do well, you do well. I'm sure Google decided that what was most valuable was to have hundreds of millions of devices with a button on the front that took you to search and/or a prominent search bar on the home screen. The only thing more valuable than a search ad is a geo-targeted search ad... and this way they have a lot of influence over how the mobile platform develops and what users expect from phones. Otherwise we might have gotten phones that go "oops, sorry, Microsoft paid us so this phone can only search the web with Bing!" or "sorry, web apps don't work on this phone, only paid downloaded apps work" or whatever BS like that. And trust me, more of that stuff would be plausible if Google was a phonemakers and other phonemakers felt directly in competition with them. 5) So I say without hesitation that Apple is the king of smartphones and tablets. But Android is a solid #2 that might not have happened if Google had taken another strategy, and while I think Apple is a better business right now, I agree with Buffett and Munger that Google has a great moat, and I think that their 'infrastructure' play is stable over the long term. Apple is kind of on a product treadmill, and they need to keep producing great products that people want (they also have some nice infrastructure stuff like iTunes and the App Store, but it's a much smaller part of their business). Meanwhile, Google benefits (via search, adsense or display ads) from every Android, iPhone, RIM, Nokia, Windows phone, iPad, etc... So I wouldn't have any problems investing in AAPL, and I think those here who invested in MSFT probably will also do well over the long term, but GOOG at $482 fit my personal criteria better, so I got in. Update: I also forgot to mention that if Google hadn't made Android free, chances are they couldn't have used the Linux foundation because of the GPL license (though I'm not 100% sure, maybe there's a workaround), so it would have been a lot more work to build the OS from scratch rather than on top of an existing foundation.

All right, after a (too short) night of sleep, here's the outline of how I see this for GOOG: How does Google prefer to make money? Where have they the highest margins and biggest moat? -Search ads are extremely profitable because 1) They are targeted. You know the intention of the user because they just searched for "stainless steel fridge" so if you show them ads for stainless fridges, you'll get a lot more value than if you show fridge ads on facebook where people's intention is mostly to check up on their friends. That's why some keywords are worth many dollars per click while less targeted ads are often worth fractions of pennies. 2) Ads shown on the Adsense and Doubleclick networks are also profitable, but google has to share money raised in the auction with the publishers. Ads on Google's own sites don't share any of the money. Another reason search is preferable for them. -So how does Android fit into all this? 1) In 2007 when the Google guys saw the iPhone and realized that in the future a lot more of the web was going to be consumed on mobile devices, and that they had to make sure their products were well positioned for that and that those who controlled that mobile platform couldn't harm them, they could have said: "all right, we're going into the phone business and we'll compete directly with Apple" and maybe a year later they could have had a phone like the Nexus One. They could have tried to make money from the hardware and the apps, but the problem would've been: 2) They're a software company. They don't have tons of industrial designers, they don't have a large distribution network and retail outlets, they don't have supplier relationships, etc. So they could have tried to turn the ship around and become a whole other kind of company to compete with Apple, but the problem is, chances of success would be low, and if they became a phone maker they wouldn't just be competing with Apple, they'd also be competing against RIM, Samsung, Motorola, HTC, etc. 3) Maybe they could have licensed their OS to some of these companies, but when you want to make money from the hardware, you don't want to give your secret sauce to everybody. That's why Apple will never license iOS. But maybe GOOG could have skipped the phone and just tried to license a phone OS. Maybe that could have worked, though phone makers up to that point hadn't shown too much interest in licensing other people's OSes. And if you sell it to them, you can't price it too high or they'll go in-house, and you always have to worry that someone else will try to undercut you with a cheaper OS (windows for phones, etc) and that your phonemakers will jump ship, etc. 4) I think Google looked at that kind of business and they decided they'd rather go for maximum scale instead. When you give a quality OS for free, you know you'll get the maximum number of partners possible because you can't be undercut on price and they won't feel you are competing with them, they're partners and if they do well, you do well. I'm sure Google decided that what was most valuable was to have hundreds of millions of devices with a button on the front that took you to search and/or a prominent search bar on the home screen. The only thing more valuable than a search ad is a geo-targeted search ad... and this way they have a lot of influence over how the mobile platform develops and what users expect from phones. Otherwise we might have gotten phones that go "oops, sorry, Microsoft paid us so this phone can only search the web with Bing!" or "sorry, web apps don't work on this phone, only paid downloaded apps work" or whatever BS like that. And trust me, more of that stuff would be plausible if Google was a phonemaker and other phonemakers felt directly in competition with them. 5) So I say without hesitation that Apple is the king of smartphones and tablets. But Android is a solid #2 that might not have happened if Google had taken another strategy, and while I think Apple is a better business right now, I agree with Buffett and Munger that Google has a great moat, and I think that their 'infrastructure' play is stable over the long term. Apple is kind of on a product treadmill, and they need to keep producing great products that people want (they also have some nice infrastructure stuff like iTunes and the App Store, but it's a much smaller part of their business). Meanwhile, Google benefits (via search, adsense or display ads) from every Android, iPhone, RIM, Nokia, Windows phone, iPad, etc... So I wouldn't have any problems investing in AAPL, and I think those here who invested in MSFT probably will also do well over the long term, but GOOG at $482 fit my personal criteria better, so I got in. I'm going to cross-post this in the Google thread because this doesn't have much to do with MSFT anymore. Feel free to continue the discussion over there: http://cornerofberkshireandfairfax.ca/forum/index.php?topic=4442.120 Update: I also forgot to mention that if Google hadn't made Android free, chances are they couldn't have used the Linux foundation because of the GPL license (though I'm not 100% sure, maybe there's a workaround), so it would have been a lot more work to build the OS from scratch rather than on top of an existing foundation.

That's correct. It's the part about Google that wasn't. I don't dispute that compared to Apple, they're far behind. But they're not trying to out-Apple Apple. And I'm not a short-term kind of guy, and I think they're on a great trajectory. I'm on a lot of forums and sites where programmers are, and Android is definitely getting more attractive to them and more talked about. Will the average Android user ever spend as much as the average Apple user for apps? No, because Android will go downmarket as well as up. But will the sheer number of users be enough to make the store attractive and for most of the best quality apps that people actually use to be ported there? Sure. It's late and I need to get to bed, but tomorrow I'll try to find some time to write more about how I see each company's strategic position.

The number of questions you want answered in a day and the number of searches you do are two very different numbers. The more convenient it becomes to search, the more the number of searches will approach the number of questions you want answered -- people might not want to go to their computer or open up their laptop everytime they'd like a search, but it might be easy enough to check on a phone (especially with voice search). The search pattern that google showed was the one that they've been seeing for years (makes sense, no: When people aren't at their desk, they use internet search less). But now mobile is being added into the dips of when people aren't at their desks (some mobile searches will replace desktop ones, but many will be searches that wouldn't have happened otherwise). I see it all the time. Group of friends talking, a question is asked, people whip out their phone to search google. Apple is definitely the dominant player there and monetizes hardware and apps much better than anyone else, no question. But I believe Google is in this for the long haul and they are positioning themselves in a way that nobody would have foreseen a few years ago (I mean, Google making OSes? for phones?), and it's going to help them a lot in their core ad business, which is very profitable. Of course they are going for marketshare. They said it themselves. Do you see any other strategy out there competing with Apple? They wouldn't have that many hardware partners and software developers if they weren't running an open platform with very good terms compared to Apple. But now the product is rapidly getting better, the hardware is getting better, and the apps are getting better, and they've pretty much ensured that mobile devices will use open standards (HTML5, etc) and that they're not taken hostage by competitors that control the platform between them and their customers (directly and indirectly -- now that Android offers the open web, it's harder for others to lock things down too much). It's a tradeoff; they could have tried to maximize direct revenue per phone, but that could have meant a much smaller marketshare and influence because of fewer partners, slower development, less ad dollars spent by partners, fewer developers, and over time much smaller revenues. They did it the smart way, IMHO. What matters is where they'll be in 3-5 years, not next quarter. And right now the landgrab for mobile has two winners: Apple and Google. Controlling a platform is extremely valuable. It could easily have been Apple and then everybody else far behind...

http://www.reuters.com/article/2011/07/07/us-buffett-gates-idUSTRE7667HS20110707

Forbes on the ancient art of patent trolling: http://blogs.forbes.com/timothylee/2011/07/07/microsofts-android-shakedown/ And some discussion of the article at a site full of programmers (it's where I found the link): http://news.ycombinator.com/item?id=2738628