Tag Archives: CPC

Why Google Deserves a Premium Valuation

By Daniel Sparks, The Motley Fool

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There’s been plenty of talk about whether or not Google could reach $1,000 by the year’s end. Deciphering Google‘s prospects begins with an analysis of the company’s market outlook and the durability of its cash flows.

Outlook
One of the first steps in any valuation is to examine the key factors driving the growth of the underlying business. There are two sides to this coin: profitability metrics and market growth potential.

Google’s undoubtedly the worldwide leader in online search. But how significant is search to the company’s business?

Source: SEC filings.

As shown in the chart above, Google’s network sites and its Google.com segments make up 25% and 62% of revenue, respectively. Google’s profitability, therefore, is ultimately determined by the performance of its cost-per-click, or CPC, metric. CPC simply refers to the amount an advertiser pays Google when a user clicks on an ad.

Investors have watched Google’s CPC metric take quite a rollercoaster ride over the last couple years. As the company becomes increasingly mobile, it’s had to adapt its monetization methods. The proliferation of Google’s own Android platform has, in fact, been a huge driver in global mobile adoption.

At first, this was a significant challenge for Google as it shifted its advertising to mobile platforms. The company’s year-over-year CPC comps began to decline and eventually turned negative. But Q4 2012 showed signs of a potential bottom to this decline, with CPC even trending up 2% sequentially.

Source: SEC filings from the corresponding quarters above.

The company’s market outlook reveals considerably favorable growth prospects. Namely, the digital advertising market is growing far more rapidly than other forms of advertising. 

The Pew Research Center’s Annual Report on American Journalism describes this transformation:

Digital ads, which outpaced newspaper advertising for the first time in 2011, now make up 23% of overall U.S. advertising, up from 20% in 2011. They are second only to television ads in terms of overall dollars, and are growing three times faster. eMarketer projects digital’s share of the U.S. ad market will grow to 29% by 2016.

Google’s paid clicks, or the quantity of clicks on its advertisements, confirm that Google is benefiting from the trend of increasingly more digital advertising. Paid clicks were up 24% from the year-ago quarter.

Google’s wide economic moat
The next step in valuation is to examine a company’s competitive advantage. Is it durable? If not, predicting any growth is pure speculation. So we ask: What core competencies ensure Google can sustain its position as a market leader?

Warren Buffett once said, “In business, I look for economic castles protected by unbreachable ‘moats.'” In other words, Buffett looks for businesses with a sustainable competitive advantage.

Examining the durability of Google’s core competencies allows us to determine just how wide Google’s moat could be.

Three core competencies give Google enormous advantages in the marketplace:

  1. The network effect
  2. Size
  3. Versatility

With every additional click or client, Google’s platform becomes increasingly valuable to other clients. The same is true for other social …read more
Source: FULL ARTICLE at DailyFinance

What's Driving Google to New Highs?

By Daniel Sparks, The Motley Fool

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It was only last November when Google (NASDAQ: GOOG) traded below $650. Now, shares trade around $826. Much of this 25% gain could be attributed an overall positive market (note the 15% rise in the Dow Jones during the same period). But what’s causing the rest of the tech giant’s rise?

Understanding Google
To understand what drives Google’s stock price (or at least what should drive Google’s stock price), it’s important to break down its revenue to see which of its units really count in analysis.

Source: 2012 10-K.

Google’s network sites and its Google.com revenue make up the majority of revenue, at 25% and 62%, respectively. To better understand each of these segments, it’s first necessary to get a grasp of the difference between Google’s AdWords and AdSense programs.

  • AdWords: Google’s primary auction-based advertising program, used to deliver relevant ads to search queries or web content. These text-based ads appear beside related search results or web content on Google’s own sites (Google.com) or on the thousands of Google’s partner websites (Google network).
  • AdSense: Enables Google’s network partners to deliver relevant ads from AdWords advertisers on their websites.

In other words, AdWords customers pay Google to advertise, while AdSense customers get paid by Google to deliver AdWords advertisements to relevant audiences. Google makes money from the spread between the amount AdWords customers pay and the amount AdSense customers receive.

Google reports all advertising revenue that goes toward ads on its own site under the label “Google.com.” Likewise, all advertising revenue that goes toward ads on network partners’ sites is labeled “Google network sites.” This is appropriate, considering that the company shares “the majority of the revenues generated from [AdSense program ads] with the Google network members that display the ads,” as stated in the company’s 2012 10-K. 

In short, advertising is what drives Google’s business. Google Glass, the Chromebook Pixel, and driverless cars are all nice — but none of these playful items meaningfully impact business results.

Key metrics driving growth
With so much depending on advertising, Google investors pay particularly close attention to cost-per-click and paid clicks — two metrics that speak volumes about Google’s success in advertising.

  • Cost-per-click, or CPC: The amount an advertiser pays Google when a user clicks on an ad.
  • Paid clicks: The quantity of clicks on sponsored links.

Paid-click growth came in nice, increasing 24% in Q4 from the year-ago quarter. But the real surprise was the changing trend in CPC.

Before Google’s fourth quarter results, investors were looking for a bottom to Google’s declining year-over-year CPC comparisons. In the second quarter of 2012, CPC year-over-year comparisons reached an all-time low of negative 16%. The next quarter brought little improvement, with year-over-year CPC comps coming in at negative 15%. Finally, investors saw a significant upturn in the fourth quarter of 2012, with CPC year-over-year comps declining just 6% (only 4% once adjusted for currency impacts).

Source: SEC filings.

The Street interpreted this smaller decline in Q4 to signal a bottom to the negative CPC trend.

At the time of …read more
Source: FULL ARTICLE at DailyFinance

Rakuten LinkShare Search Marketing Services Deliver Dramatic Results

By Business Wirevia The Motley Fool

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Rakuten LinkShare Search Marketing Services Deliver Dramatic Results


Online Advertisers Reap Benefits of Higher Conversions, Lower CPC

NEW YORK–(BUSINESS WIRE)– Rakuten LinkShare‘s search marketing division reported record-breaking client results for the fourth quarter of 2012.

Online advertisers working with Rakuten LinkShare’s paid search marketing services outperformed the industry average for click-through rate (CTR), cost-per-click (CPC), and return on ad spend (ROAS).

More specifically, Rakuten LinkShare search marketing clients saw the following results on average:

  • Click through rate (CTR) of 2.45% or nine percent higher than the industry average of 1.94%.1
  • Cost-per-click (CPC) of $0.44 or six percent lower than the industry average of $0.54.2
  • Return on ad spend (ROAS) of $9.30 or sixty percent higher than the industry average of $5.78.3
  • Conversion rate of 5.65% or 99% higher than the industry average conversion rate of 2.84%.4

In line with the industry, Rakuten LinkShare clients saw on average a twenty percent increase in sales transactions yet they achieved this year-over-year increase more efficiently and more cost effectively.

“Rakuten LinkShare has enabled us to achieve tremendous results in our search marketing campaigns which can be attributed to their balanced approach to service, technology and strategy,” said Neill Morris, director of online marketing, Murad, Inc. “They’ve also delivered when it comes to staying on top of the latest changes and innovations released by the search engines yet never lose sight of the fundamentals that a well optimized program can deliver.”

Search marketing is a high growth area that reached nearly $23 billion by the end of 2012.5 To accommodate the needs of advertisers, Rakuten LinkShare paid search services also include innovative campaigns for mobile paid search, YouTube advertising, Google Shopping, Google Product Listing Ads, and comparison-shopping engine management.

“While Rakuten LinkShare has been synonymous with performance marketing, we’re also seeing a growing demand for our search marketing and other services,” said Yaz Iida, chief executive officer, Rakuten LinkShare. “These dramatic results speak for themselves as more online advertisers rely on us to uncover new opportunities to …read more
Source: FULL ARTICLE at DailyFinance

Top Gun Grabbers In The House Of Representatives Exposed

By Leon Puissegur

Bobby Rush Official Portrait 112th Congress Top Gun Grabbers In The House Of Representatives Exposed

We as a people seem to now be wondering if our Congress will ever do anything right. We saw the article posted by Tim Brown entitled “Ten New Gun Bills Introduced On First Day of Congress”. We then began reading, only to see names that looked funny doing this, so we looked up to find out just who these people are that have placed such bills on the floor of the House. Strange to say, the first one by Rep. Carolyn McCarthy (D-NY) is purely due to what happened to her life. Her husband was shot back in 1993; and since then, gun laws have come and gone with no difference at all made, except possibly for the worst. It has to be noted that the individual who killed Rep. McCarthy’s husband had already broken several laws, so how are any additional laws going to stop people from obtaining guns or other weapons?

The next two Representatives that introduced bills, Bobby Rush (D-IL) and Rush Holt (D-NJ), seem to have questionable pasts! It seems that Bobby Rush is a member of the Democratic “Progressive” party. Now this, by itself, brings into the picture some very concerning questions about just who is being elected to the House of Representatives. Bobby Rush is a member of a group that has very close ties to the Institute for Policy Studies and the Democratic Socialists of America. The many times-called “Progressive” party is another name for the Democratic Socialist Party of America! Now many people either seem not to be bothered by that, or they are just plain dumb! Here in lies the problem, a group of people who do not have the Constitution at heart and actually wish to destroy the Constitution. We cannot state what Representative Holt is a part of; but if Holt is with Rush, it would seem to indicate that Holt also supports the Socialist Democratic Party.

The Congressional Progressive Caucus (CPC) was founded in 1991 by Bernie Sanders, a self-identified socialist who had recently been elected to the U.S. House of Representatives. Sanders’ CPC co-founders included House members Ron Dellums, Lane Evans, Thomas Andrews, Peter DeFazio, and Maxine Waters. The Institute for Policy Studies (IPS) was also involved in CPC’s founding and in Caucus activities thereafter; IPS continues to advise CPC on various matters to this day.

So let us look at what we have here so far: we see that at least two people here have “special’ interests at heart, and those interests have seemed to make them forget about their Oath of Office in which they swore to uphold the Constitution. Yet they are now introducing bills that are in direct conflict with the Constitution! Maybe this is why our nation is so messed up right now; we have people in office who just do not understand what the Constitution really means.

Now let us get back to Rep. Bobby Rush; now here is a real strange apple in the cart. Let us begin with the following given once again at the only site that shows the Socialists for who they are, www.discoverthenetworks.com; Bobby Rush is shown as:

-Democratic Member of Congress
-Member of the Progressive Caucus
-In 1968, went AWOL from the U.S. Army
-Co-founder of the Illinois branch of the Black Panther Party
-In 1969, served six months in jail for an illegal weapons conviction
-Advocates reparations for African Americans

Here it is shown that Bobby Rush had a 6-month jail term for an illegal weapons conviction in 1969! But this was during the time that Bobby Rush was also, what his “Socialist” friends would call him, the “Deputy Minister of Defense’! We have to wonder if maybe Obama would place him somewhere in his Administration since he has held a high office? Of course, he now disavows his past with the Black Panthers.

Rush was born in November 1946 in Albany, Georgia but grew up on Chicago’s North Side, where his mother was a Republican precinct captain. While serving in the U.S. Army from 1963-1968, Rush became involved with the radical Student Nonviolent Coordinating Committee. In 1968, he went AWOL (Absent Without Official Leave) from the military and co-founded the gangster-ridden Illinois branch of the Black Panther Party (BPP), renowned for intimidating local business people into making “donations” to Panther “charities.” One BPP member recruited by Rush was Fred Hampton, who was killed in a December 4, 1969 police raid on Panther headquarters.

In 1969 Rush served six months in jail for an illegal weapons conviction. In 1971, his comrades were still describing him as the “Deputy Minister of Defense” for the BPP’s Illinois chapter. In 1992, the socialist magazine “In These Times” would praise Rush, who was by then a fledgling congressional candidate, as someone who “has continued to support progressive policies and has never disavowed his Panther past.”

We have to wonder just how could someone with a criminal background like this and with such a deep-rooted and hate-filled past be elected to the House of Representatives where laws are made and discussed? But Bobby Rush shows what he is after in his own words.

As a member of both the Progressive Caucus and the Congressional Black Caucus (CBC), Rush is among the strongest congressional supporters of reparations for the descendants of African-American slaves. “The future of race relations will be determined by reparations for slavery,” Rush once told a congressional hearing.

Now, given Bobby Rush’s own words, it is clear just what he is looking for: reparations for slavery. In other words, he wants money for nothing. He even stated here that future race relations would be about reparations! Is this the kind of man we should have making laws for our nation?

In 1999, Rush’s 29-year-old son Huey Rich was shot and killed. “My son’s death was a senseless death,” he told supporters the following day at Jesse Jackson’s Operation PUSH headquarters. “We’ve got to rid our communities of guns.”

Instead of finding out why his son was killed, he just goes after the guns when guns were not what caused the killing. But wait: he goes before Jesse Jackson’s Operation PUSH. Rush gives a speech to these people; now this shows his connection to the far left of which the Socialist/Marxist/ Communist lay in wait. Jackson is also an open Socialist and proud of it.

Rush’s most noteworthy congressional race took place in 2000, when he defeated then-state senator Barack Obama in the Democratic Primary. During the campaign, Rush said: “Barack Obama went to Harvard and became an educated fool. Barack is a person who read about the civil-rights protests and thinks he knows all about it.”

Is this amazing where he calls Obama a fool? This representative is a prime example of what is wrong with our Congress today! Our nation has gone from being a proud display of the Constitution to one that seems to “tolerate” the Socialists/Communists/Marxists that have infiltrated our government!

During his legislative career, Rush has voted:

-against the development of a national missile defense system;
-against requiring hospitals to report (to the federal government) illegal aliens who receive emergency medical treatment;
-against separate proposals calling for the construction of some 700 miles of fencing to prevent illegal immigration along America’s southern border;
-against a proposal to grant state and local officials the authority to investigate, identify, and arrest illegal immigrants;
-against major tax cut proposals in September 1998, February 2000, March 2000, July 2000, May 2001, May 2003, October 2004, and May 2006;
-against separate welfare reform bills designed to move people off the welfare rolls and into paying jobs;
-in favor of prohibiting oil and gas exploration in Alaska’s Arctic National Wildlife Refuge (ANWR);
-against a proposal to fund offshore oil exploration along the Outer Continental Shelf.

Bobby Rush seems to vote against all that would help the very people he depended upon to get elected!

Sheila Jackson Lee (D-TX) also put forth gun control legislation on the first day of the 113th Congress. She seems to have the idea that people over 21 would not go out and steal a gun and go on a bloody rampage. Now what is wrong with that? First off, it would not matter what age the law would cover simply because should a criminal wish to do harm to anyone, they would not have any problem breaking the law to do it! Her bill has to be one of the most stupid ideas since it would not stop anything at all; and if that would become a law, it would have to be circumvented for the service men and women! How dumb would that be?

Representative Sheila Jackson Lee is:

-Congresswoman representing the 18th District of Texas, downtown Houston
-Member of the Progressive Caucus
-Member of the Congressional Black Caucus

Lee belongs to the Progressive Caucus and the Congressional Black Caucus in the House of Representatives. Americans for Democratic Action consistently rates her voting record as 95-to-100 percent on the left side of legislation.

It seems that this lady is very smart, well, in her own mind anyway, because she has made that statement to her underlings. Per discoverthenetworks.com:

Over the course of her political career, Lee has earned a reputation for having both an entitlement mentality and a volatile temper. In 1998, for example, she was accustomed to having an aide drive her daily, in a government-leased car, back and forth between her Capitol Hill apartment and her congressional office one block away. One day, she told a staffer who had failed to reserve a limousine: ‘You don’t understand. I am a queen, and I demand to be treated like a queen!’

What else has this lady done? What we reveal is not made up; it is factual and on the record. The following all comes from Congressional records and from www.discoverthenetworks.com.

In July 2010, Lee wrongly stated, from the floor of the House of Representatives, that North and South Vietnam had managed to forge a peaceful relationship with one another in the years since the Vietnam War. (In fact, South Vietnam ceased to exist on July 2, 1976, when North and South were merged to form the Socialist Republic of Vietnam.) Said Lee:

Today we have two Vietnams, side by side, North and South, exchanging and working. We may not agree with all that North Vietnam is doing, but they are living in peace. I would look for a better human rights record for North Vietnam, but they are living side by side.

That same month, Lee spoke at an NAACP meeting where she derided the Tea Party movement as a racist phenomenon, saying:

All those who wore [Klansman] sheets a long time ago have now lifted them off and started wearing [applause], uh, clothing, uh, with a name, say, I am part of the Tea Party. Don’t you be fooled. [voices: “That’s right.”, applause] Those who used to wear sheets are now being able to walk down the aisle and speak as a patriot because you will not speak loudly about the lack of integrity of this movement.

In a January 2011 floor debate over a Republican bill (HR2) calling for repeal of the recently passed national healthcare reform legislation, Lee said that such a repeal would violate the Constitution:

The Fifth Amendment speaks specifically to denying someone their life and liberty without due process. That is what H.R. 2 does and I rise in opposition to it. And I rise in opposition because it is important that we preserve lives and we recognize that 40 million-plus are uninsured. Can you tell me what’s more unconstitutional than taking away from the people of America their Fifth Amendment rights, their Fourteenth Amendment rights, and the right to equal protection under the law?

One should ask why this lady is even in Congress, if she cannot understand what she is doing, much less has her history totally out of whack! It is like she and the rest of the Socialists are in a totally separate world and merely pop into ours to introduce laws that would have no bearing upon any sort of action to stop people from breaking the laws to get guns and kill people.

We have shown with just these people here just what Congress is facing today; and if “We The People” do not wake up soon, we will find ourselves being totally dominated by a bunch of Socialist/Communist people who have destroyed the Constitution and replaced it with the Communist Manifesto!

Here is the bunch that offered eight gun control bills on the first day of the new Congress. Yes, they have an agenda!

Source: FULL ARTICLE at Western Journalism