GOOGL - Google

[TwoCitiesCapital]

Totally agree that web search will continue to be dominated by Google, except in jurisdictions where it is outright blocked, like China, or otherwise outcompeted, like Russia. I'm just saying that other paradigms could end up making web search irrelevant. I've met a lot of people using the internet who never use their browser and thus never search for things on the web.

 

I personally LOVE Google products and use them extensively. But I think that is an atypical experience, when viewed globally across the entire population that is online. Of course, in the most profitable areas like the US, people do use Google and web search. But I'm simply musing that maybe that could change. It's not completely a given that it couldn't. Search is a command line function which is quite technical. Operating systems aren't like that anymore. Maybe the "job to be done" that search solves will be solved a completely different way for people.

 

Google has a something like a 70% of the global search market - and that excludes China which has 16% of the world's population. So if we exclude a country it has chosen not to operate in, then it's more like 85%. I think their dominance pretty much rings true in most every country/society/demographic.

[innerscorecard]

Google dominates search. But maybe search isn't the endpoint. In the paradigm of how I live my life, I can't see it going away. But go to the App Store right now and look at the app reviews for Trip Advisor and Airbnb. They are filled with stay reviews!

 

That proves that the population of people using technology and the internet now, as more of the population goes online, is going to have very different assumptions from those doing it in the past.

 

The internet is not the open web.

 

When I was on the subway in Shanghai every day, I very rarely saw people doing things in their browsers. They were completely in Wechat, QQ, Alipay, or other apps with tons of functions bundled in. The internet to the population of the world is not at all similar to the open web, though it is for me and all of you (by definition of us posting on an open web forum).

[innerscorecard]

For buying a blender, people will search the Taobao app or the JD app, and find the best result on there. Taobao isn't even indexed at all, as it blocks search engine spiders.

[Jurgis]

For buying a blender, people will search the Taobao app or the JD app, and find the best result on there. Taobao isn't even indexed at all, as it blocks search engine spiders.

 

For buying anything tangible in US, I am not sure how many people use Google search. Personally, I look on Amazon + depending on product Walmart, BestBuy, Lowes, Wayfair, BedBathBeyond, etc. Searching for product on Google (or Bing for that matter - I actually don't use Google search at all) is a waste of time IMO.

 

I think people look for services on search engines though. E.g. dentist, plumber, electrician, lawyer, mechanic, etc.

[siddharth18]

There is only one Warren Buffett, Brin and Page can try and emulate him but don't think they will succeed. But I could be wrong, however what I have seen so far doesn't add up.

 

There is only one Warren Buffett, Brin and Page can try and emulate him but don't think they will succeed. But I could be wrong, however what I have seen so far doesn't add up.

 

I've never heard either one say they wanted to emulate Buffet. They are 100% technology focused and Birkshire isn't tech focused at all. Also they try to develop new ideas in house and grow them, or buy companies while they are fairly small, neither tactic I'd Birkshire's M.O.

 

The only similarity you could possibly make is the corporate structure, but not every conglomerate is BRK, or even trying to be.

 

Q: What about Alphabet?

A: There is a size at which companies begin to fall in on themselves. Google has done well because the founders are so talented and brilliant. Google, Amazon, Facebook — they all have strong founders and leaders. Steve Jobs thought Google was doing too many things.

We spent two years arguing about whether we should change the logo. Our mission is to organize all the world’s information. The three of us visited Warren Buffett in Omaha. Alphabet is an attempt to build a holding company like Berkshire Hathaway out of an existing operating company. It’s never been done before.

 

Source: https://medium.com/cs183c-blitzscaling-class-collection/cs183c-session-8-eric-schmidt-56c29b247998#.dc7f43fk0

[wknecht]

For buying a blender, people will search the Taobao app or the JD app, and find the best result on there. Taobao isn't even indexed at all, as it blocks search engine spiders.

 

For buying anything tangible in US, I am not sure how many people use Google search. Personally, I look on Amazon + depending on product Walmart, BestBuy, Lowes, Wayfair, BedBathBeyond, etc. Searching for product on Google (or Bing for that matter - I actually don't use Google search at all) is a waste of time IMO.

 

I think people look for services on search engines though. E.g. dentist, plumber, electrician, lawyer, mechanic, etc.

This was posted here before, but I'll reattach it. The most expensive keywords.

most-expensive-keywords.pdf

[LongTermView]

For buying anything tangible in US, I am not sure how many people use Google search. Personally, I look on Amazon + depending on product Walmart, BestBuy, Lowes, Wayfair, BedBathBeyond, etc.

True, I make a lot of purchases by going straight to Amazon and searching within their site without doing any Google searches at all.  Still, stores like Amazon don't have the breadth that Google does.  Looking at the keyword list from wknecht, I don't look to Amazon when it comes to things like insurance, loans, mortgage, attorney/lawyer, credit, donation, and degree.

[Jurgis]

For buying anything tangible in US, I am not sure how many people use Google search. Personally, I look on Amazon + depending on product Walmart, BestBuy, Lowes, Wayfair, BedBathBeyond, etc.

True, I make a lot of purchases by going straight to Amazon and searching within their site without doing any Google searches at all.  Still, stores like Amazon don't have the breadth that Google does.  Looking at the keyword list from wknecht, I don't look to Amazon when it comes to things like insurance, loans, mortgage, attorney/lawyer, credit, donation, and degree.

 

Skipped the last sentence of my post, didn't you?

 

I think people look for services on search engines though. E.g. dentist, plumber, electrician, lawyer, mechanic, etc.

[giofranchi]

Is GOOG at less than 20x forward EPS ex cash really expensive?

I know its share price has soared more than 40% this year… therefore, we should proceed with caution… but, internet penetration in China is still only at 50%, in India it is at 30%, in Africa, the Middle East, and other populous parts of Asia it might be even lower… Internet penetration is still barely above 40% worldwide (http://www.internetlivestats.com/internet-users/). There seems to be lots of room for growth in the years ahead, even if other investments of theirs don’t yield any meaningfully profitable result.

And the more I read about GOOG, the more I find it to be an extraordinary business.

 

Cheers,

 

Gio

[giofranchi]

Sorry if this has already been posted. I have just happened to read it, and I agree with most of the things that are said:

 

https://stratechery.com/2015/do-you-trust-larry-page/

 

Cheers,

 

Gio

[DeepSouth]

Is GOOG at less than 20x forward EPS ex cash really expensive?

I know its share price has soared more than 40% this year… therefore, we should proceed with caution… but, internet penetration in China is still only at 50%, in India it is at 30%, in Africa, the Middle East, and other populous parts of Asia it might be even lower… Internet penetration is still barely above 40% worldwide (http://www.internetlivestats.com/internet-users/). There seems to be lots of room for growth in the years ahead, even if other investments of theirs don’t yield any meaningfully profitable result.

And the more I read about GOOG, the more I find it to be an extraordinary business.

 

Cheers,

 

Gio

 

AFAIK GOOG search generally does not fare well in countries that do not use the latin alphabet. These places make up much of the white space you list.

 

https://upload.wikimedia.org/wikipedia/commons/thumb/f/f4/Latin_alphabet_world_distribution.svg/512px-Latin_alphabet_world_distribution.svg.png

[LongTermView]

Jurgis,

 

Yes, you had already pointed out services which covers much of the breadth outside of Amazon.  In my head I was thinking there are still some non-service type purchases where I skip Amazon and go to Google.  Still, Amazon seems to keep expanding and it gets harder each year to think of examples outside of services.

[Jurgis]

In my head I was thinking there are still some non-service type purchases where I skip Amazon and go to Google.

 

There might be.

We agree in general. :)

 

Peace.

[rkbabang]

Jurgis,

 

Yes, you had already pointed out services which covers much of the breadth outside of Amazon.  In my head I was thinking there are still some non-service type purchases where I skip Amazon and go to Google.  Still, Amazon seems to keep expanding and it gets harder each year to think of examples outside of services.

 

I tend to check google for higher priced items (i.e. >$150 or so), where for lower priced items I just stick with Amazon.  Many times I end up buying from Amazon anyway, but sometimes I find a better deal elsewhere.  I recently moved and needed to buy furniture and new TV's and some other higher priced or unusual items. I bought a lot of them at sites other than Amazon.  For the exact model TV I wanted Bestbuy actually had a better price and I was buying two of them so it made a large difference.  My wife found furniture using google and ended up buying some at Overstock and some elsewhere, Amazon is generally not too good for furniture.

[Jurgis]

Jurgis,

 

Yes, you had already pointed out services which covers much of the breadth outside of Amazon.  In my head I was thinking there are still some non-service type purchases where I skip Amazon and go to Google.  Still, Amazon seems to keep expanding and it gets harder each year to think of examples outside of services.

 

I tend to check google for higher priced items (i.e. >$150 or so), where for lower priced items I just stick with Amazon.  Many times I end up buying from Amazon anyway, but sometimes I find a better deal elsewhere.  I recently moved and needed to buy furniture and new TV's and some other higher priced or unusual items. I bought a lot of them at sites other than Amazon.  For the exact model TV I wanted Bestbuy actually had a better price and I was buying two of them so it made a large difference.  My wife found furniture using google and ended up buying some at Overstock and some elsewhere, Amazon is generally not too good for furniture.

 

For all of these I never go through Google.

Electronics: check NewEgg, Best Buy, Microcenter to price compare against Amazon

Furniture: check Wayfair, Jordans, Ikea. Amazon is not that good.

 

To be fair, I guess Google and Bing show some ads if you search for furniture.

[rkbabang]

Jurgis,

 

Yes, you had already pointed out services which covers much of the breadth outside of Amazon.  In my head I was thinking there are still some non-service type purchases where I skip Amazon and go to Google.  Still, Amazon seems to keep expanding and it gets harder each year to think of examples outside of services.

 

I tend to check google for higher priced items (i.e. >$150 or so), where for lower priced items I just stick with Amazon.  Many times I end up buying from Amazon anyway, but sometimes I find a better deal elsewhere.  I recently moved and needed to buy furniture and new TV's and some other higher priced or unusual items. I bought a lot of them at sites other than Amazon.  For the exact model TV I wanted Bestbuy actually had a better price and I was buying two of them so it made a large difference.  My wife found furniture using google and ended up buying some at Overstock and some elsewhere, Amazon is generally not too good for furniture.

 

For all of these I never go through Google.

Electronics: check NewEgg, Best Buy, Microcenter to price compare against Amazon

Furniture: check Wayfair, Jordans, Ikea. Amazon is not that good.

 

To be fair, I guess Google and Bing show some ads if you search for furniture.

 

When you are looking for something specific that doesn't always work.  For instance we were looking for an industrial looking TV stand and couldn't find one we liked at Amazon, overstock, wayfair, etc.  Using google we found one we liked at a website I have never heard of:  http://www.homedecorators.com/p/manchester-large-tv-stand/

 

I was looking for a QNAP NAS and found it cheaper at simplyNAS.com which is a site I had never heard of.

 

It still pays to shop around.

 

[Investmentacct]

Google has integrated "Google Shopping"  in to regular google search.

If you look for specific item in google query, you will see sponsored items shown up and their prices in Walmart, Target, Kohls, Bestbuy , Newegg etc.

In lieu of this, you may always go directly to "Google Shopping" and look and compare the prices of the product you want.

 

In recent initiative named as "Google Express" google has started delivering from local stores/grocery stores such as costco, target, kohls, smart & final etc. This service captures local prices on-line on Google express site and then delivers home for 95 $ a  year service.

 

 

>For all of these I never go through Google.

>Electronics: check NewEgg, Best Buy, Microcenter to price compare against Amazon

> Furniture: check Wayfair, Jordans, Ikea. Amazon is not that good.

 

 

 

Jurgis,

 

Yes, you had already pointed out services which covers much of the breadth outside of Amazon.  In my head I was thinking there are still some non-service type purchases where I skip Amazon and go to Google.  Still, Amazon seems to keep expanding and it gets harder each year to think of examples outside of services.

 

I tend to check google for higher priced items (i.e. >$150 or so), where for lower priced items I just stick with Amazon.  Many times I end up buying from Amazon anyway, but sometimes I find a better deal elsewhere.  I recently moved and needed to buy furniture and new TV's and some other higher priced or unusual items. I bought a lot of them at sites other than Amazon.  For the exact model TV I wanted Bestbuy actually had a better price and I was buying two of them so it made a large difference.  My wife found furniture using google and ended up buying some at Overstock and some elsewhere, Amazon is generally not too good for furniture.

 

For all of these I never go through Google.

Electronics: check NewEgg, Best Buy, Microcenter to price compare against Amazon

Furniture: check Wayfair, Jordans, Ikea. Amazon is not that good.

 

To be fair, I guess Google and Bing show some ads if you search for furniture.

[giofranchi]

It is not only internet penetration that matters imo. What about financial literacy? At the following link:

http://www.bloomberg.com/news/articles/2015-12-02/three-quarters-of-asian-adults-financially-illiterate-s-p-says

we see how 75% of adults in Asia are still financially illiterate…

What will happen, when all those people finally become more business savvy? How many new businesses will be born then? And where will those businesses decide to advertise their new products and/or services?

Of course, it will take time. But as one of the most efficient advertising machine out there I see much more room left for GOOG to grow.

 

Cheers,

 

Gio

[giofranchi]

I wasn’t aware of the fact 11% of Pabrai’s portfolio is invested in GOOG (as of September 2015).

 

http://www.oldschoolvalue.com/blog/resources/mohnish-pabrai-checklist-investor/?source=rss&utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+OldSchoolValue+%28Old+School+Value%29

 

Does anyone know if he has sold some of his GOOG shares in the last couple of months, following the recent run-up in price?

 

Thank you,

 

Gio

 

[innerscorecard]

It is not only internet penetration that matters imo. What about financial literacy? At the following link:

http://www.bloomberg.com/news/articles/2015-12-02/three-quarters-of-asian-adults-financially-illiterate-s-p-says

we see how 75% of adults in Asia are still financially illiterate…

What will happen, when all those people finally become more business savvy? How many new businesses will be born then? And where will those businesses decide to advertise their new products and/or services?

Of course, it will take time. But as one of the most efficient advertising machine out there I see much more room left for GOOG to grow.

 

Cheers,

 

Gio

 

People in emerging markets don't use the internet with the same paradigms (search, browsers, desktops) that people in the developed world use it. While I think Google could successfully develop this market, I don't think it's a given that they do.

[giofranchi]

People in emerging markets don't use the internet with the same paradigms (search, browsers, desktops) that people in the developed world use it. While I think Google could successfully develop this market, I don't think it's a given that they do.

 

Ok, thank you.

Could you please explain how people use internet in China and India, and why GOOG hasn’t penetrated those markets yet? Is it because of the competition with Baidu, or because of something else? Does Baidu work differently? How so?

 

Cheers,

 

Gio

 

[TwoCitiesCapital]

People in emerging markets don't use the internet with the same paradigms (search, browsers, desktops) that people in the developed world use it. While I think Google could successfully develop this market, I don't think it's a given that they do.

 

Ok, thank you.

Could you please explain how people use internet in China and India, and why GOOG hasn’t penetrated those markets yet? Is it because of the competition with Baidu, or because of something else? Does Baidu work differently? How so?

 

Cheers,

 

Gio

 

Google voluntarily closed its Chinese office over the governments censorship polices. At least supposedly - they were a distant second to Baidu, but still received quite a bit of traffic so I generally believe them.

[Haasje]

Google was winning market share from Baidu when it was in China but voluntarily withdrew due to a variety of factors but an important one was increasing demands on censorship. Both In the Googleplex ( http://amzn.to/1HWueNR ) and How Google Works ( http://amzn.to/1IH4FQR ) were useful to me to understand Google better. I think Google has like 90% market share in India.

 

The requirement to be able to read and write to use Google is temporary.

 

[giofranchi]

Google launches Digital India to showcase the country’s startups — and plug its own services

 

http://venturebeat.com/2015/12/10/google-launches-digital-india-to-showcase-the-countrys-startups-and-plug-its-own-services/

 

Cheers,

 

Gio

[DavidVY]

Google left china over censorship issues.

 

If it becomes open again, google will dominate.