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Google, Facebook ‘Digital Duopoly’ Seen With 67% Of Mobile Ad Market

Alphabet ( GOOGL ) unit Google and Facebook ( FB ) hold a firm grip on the digital advertising market, especially mobile advertising, says a MoffettNathanson report. Google and Facebook drove over two-thirds of the industry’s growth in 2015, says the MoffettNathanson report.  Alphabet-controlled Google and Facebook now hold 54% of the U.S. digital ad market, up from 43% in 2010, said Michael Nathanson, an analyst at MoffettNathanson, in the report. “We can’t think of any other media market place with this level of dominance,” he added. Facebook and Google have 67% of the mobile advertising market, says Nathanson. The analyst has buy ratings on Alphabet and Facebook and a neutral rating on Twitter ( TWTR ). Twitter has gained little ground in social media advertising, said Nathanson. Privately held Snapchat and Pinterest have emerged as competitors to Facebook, he says. Nathanson’s conclusions are based on the Interactive Advertising Bureau’s 2015 Internet advertising revenue report. “Given Facebook’s and Google’s domination in key digital verticals like mobile, social, and search, it’s hard to imagine the digital ad engine meaningfully slowing anytime soon,” said Nathanson. “Social advertising comprises over 70% of all of display’s growth… and Facebook has 65% share of social,” he added. Alphabet, Facebook and Twitter were all down modestly in pre-market trading in the stock market today , reflecting weaker stock futures.

Will Commvault Hit Another Home Run With Earnings Report?

On the heels of a company transition, Commvault Systems ( CVLT ) is set to report earnings before the market open Tuesday, with the stock up sharply from its previous quarterly earnings report. The provider of data management services is expected to post revenue of $157 million, up 4% year over year and marking the second quarter in a row of revenue growth after three previous quarters of declines. The consensus on earnings per share minus items, based on analysts polled by Thomson Reuters, is 25 cents, down from 27 cents in the year-earlier period, for its fiscal fourth quarter ended March 31. After reporting fiscal Q3 earnings after the close on Jan. 27 that beat estimates, Commvault stock soared 16% the following day. From that point, the stock is up 21%, about where it was one year ago. Commvault stock was trading near 43.50, down a fraction, in midday trading in the stock market today . Commvault has an IBD Accumlation/Distribution Rating of A+, suggesting heavy institutional buying and little selling of late. Pacific Crest Securities analyst Brent Bracelin said in a research note that much of Commvault’s turnaround is now behind it, giving the company a “line of sight to a recovery.” This, he said, was further proof of Commvault’s success in enabling businesses to migrate to cloud services from providers such as Amazon ( AMZN ), Google parent Alphabet ( GOOGL ) and Microsoft ( MSFT ). “We see new products driving a return to double-digit license growth in the coming year,” Bracelin wrote.

Facebook, Microsoft Capital Spending Good For Data Center REITs

In their Q1 earnings reports, Apple ( AAPL ), Microsoft ( MSFT ) and other big Internet companies have signaled continued strong spending on cloud infrastructure — and that bodes well for data center operators, says Pacific Crest. “The five largest cloud companies ( Amazon.com ( AMZN ), Microsoft, Alphabet ‘s ( GOOGL ) Google, Facebook ( FB ) and Apple), which account for 80% of the capital investments by top-20 cloud companies, showed an acceleration in capital investments during Q1,” Brent Bracelin, a Pacific Crest analyst, said in a research report. Data center operators have been among the best-performing real estate investment trusts in 2016. REITs are essentially portfolios of income-producing properties. They bypass the standard corporate income tax obligations by distributing at least 90% of their income to shareholders in the form of dividends. Among the top data center companies, Equinix ( EQIX ) reports Q1 earnings on Wednesday after the close, while CyrusOne ( CONE ) reports on Thursday. Equinix stock, which has a so-so IBD Composite Rating of 64, is up 9% in 2016. But  CoreSite Realty ( COR ) stock has shot up 32% and leads its group with a highest-possible CR of 99. DuPont Fabros ( DFT ) is up 25%, while Cyrus One has jumped 17%. Digital Realty ( DLR ), meanwhile, has climbed 16%. Still, IBD’s 50-company Finance-Property REIT group overall is up just 3% this year and ranks No. 53 out of 197 groups tracked. Bracelin said Facebook’s capital spending jumped 125% to $1.1 billion. Microsoft’s capital spending rose 66% to $2.3 billion, while Amazon.com’s increased 35% to $1.2 billion. “Because many of these cloud operators use custom software and white-box infrastructure, there are few direct beneficiaries across the traditional technology landscape beyond some of the data center REITs,” said Bracelin.