Two Publications

Two articles were accepted by SeekingAlpha for publication. The RIM piece was ready after using the Playbook for over a hundred hours and after gaining the experience of updating 3 generations of Blackberry Phones and moving the devices over to RIM's Blackberry Enterprise Server (BES) 5.

1. 6 Things You Should Know Before Writing Off Research In Motion 
2. Microsoft Looks to Gain From Hardware Deal, New Revenue Stream

Arts and Science: Ying and Yang

Below is an interview Schmidt in regards to its decision to purchase You Tube. Schmidt is, of course, the CEO of Google.

Finance is as much a science as it is an art. Assigning a dollar value to a privately owned company is an art, in that this value is subjective and relies heavily on the optimism or pessimism at the time, a value to a forecast of worth, and a value of what the company is worth in terms of what it can do for and with its buyer.

In this case You Tube's buyer was Google:

Baskin: What methodology did you use to come up with that number?

John P. Mancini, an attorney working for Google, objects.

Schmidt: My judgment.

Baskin: Was it based on cash flow analysis? Comparable companies? What were you using as the basis for your judgment?

Mancini objects.

Schmidt: It's just my judgment. I've been doing this a long time.

Baskin: So you orally communicated to your board during the course of the board meeting that you thought a more correct valuation for YouTube was $600 million to $700 million; is that what you said, sir?

Mancini objects to characterization of the testimony.

Schmidt: Again, to help you along, I believe that they were worth $600 million to $700 million.

Baskin: And am I correct that you were asking your board to approve an acquisition price of $1.65 billion; correct?

Schmidt: I did.

Mancini objects.

Baskin: I'm not very good at math, but I think that would be $1 billion or so more than you thought the company was, in fact, worth.

Mancini objects.

Schmidt: That is correct.

Later...

Baskin: Can you tell us what reasoning you explained?

Schmidt: Sure, this is a company with very little revenue, growing quickly with user adoption, growing much faster than Google Video, which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer--because of who Google was--paying much more than they were worth. In the deal dynamics, the price, remember, is not set by my judgment or by financial model or discounted cash flow. It's set by what people are willing to pay. And we ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube.

Source: http://news.cnet.com/8301-31001_​3-10360384-261.html

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Watch Technology Stock Leaders Who are Lagging in Performance

Dell's weak earnings do not concern me, but Google's relatively weak performance on the market does. Google is an industry leader in the Internet technology space. The other leaders that need to be closely monitored are those who rely on business or consumer spending. To measure the health of corporate spending, Research In Motion's performance must be closely monitored in the weeks ahead. To measure the health of personal spending, Apple's performance must be closely monitored.

Hot Stock: Google

Disclaimer: Google owns blogger.com, which hosts this blog. Google's AdSense is also a revenue source for this site. Notice the ads, top, right, and below? Were you compelled to click on it? Your reaction would be an indicator of the effectiveness of advertising for Google. (Go ahead though to click on the ads)

Summary:
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Corporate Fundamentals for Google are healthy relative to Internet property stocks, but Google faces strong negative trading patterns. Target price is $400-$425 based on technical analysis.

Fundamental Analysis:
===============
Despite Wall street\'s love for the company, Google is still an advertising company. While iGoogle tools, new entrance to the mobile market, and Google applications make the headlines, its dominance in the search engine market allows the company to command most of its income in advertising.

Despite the strengths, Google will be succeptable to a weaker US and global economy. Organizations must reduce advertising spending under such circumstances, and Google will be faced with declining revenue. Investors must be cautious not to pay a p/e premium under such an environment.

Technical Analysis:
================
The uptrend that began in October 2005 was broken on February 2008. At that time, it was realized the U.S. was or would face a recession. In May 2008 the stock attempted to resume this uptrend, but this failed. The stock is now retreating and will possibly trade to the low $400 level. See below:

A breach below $400 isn't impossible, but does not appear to be likely. If that were to occur, look for the stock to trade to $300.


Seasonality:
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Nov 2008 - May 2009 is a period of seasonal strength for Tech stocks. A re-evaluation will be required when this period approaches.

Conclusion:
=========
Sell Google on strength, as risks remain that the stock will be at the the low $400 level.