This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Forget Apple -- It's Google's Turn Now

BOSTON ( TheStreet) -- In a tech world fixated on everything that Apple (AAPL - Get Report) does, it's easy to forget that Google (GOOG) is still in business -- and reporting quarterly earnings today.

Apple hogged the media spotlight this week, first on word that CEO Steve Jobs would take another health-related leave of absence and then on a blowout earnings report.

Google, on the other hand, hasn't been in the headlines, aside from its struggle with China over censorship and for its mishandled introduction of the Google TV set-top box.

The key question for investors ahead of Google's fourth-quarter earnings results, due for release at the close of trading Thursday, centers on a big salary increase for workers. In November, Google took steps to retain employees by awarding $1,000 tax-free cash bonuses for the holidays as well as 10% salary increases across the board, effective Jan. 1.

Google rewarded its employees richly in the fourth quarter, but what about the Internet search giant's shareholders?

For investors concerned about the spending habits of Google, the reports of salary increases appeared to be more bad news. Google devoted $1.47 billion toward capital expenditures in the first nine months of 2010 -- $757 million in the third quarter alone. The fear is that Google's commitment to its employees and the costs of funding its projects will lead to less revenue trickling down to the company's bottom line.

Philip Tasho, co-founder and chief investment officer of TAMRO Capital Partners, and Jerome Dodson, manager of the Parnassus Workplace Fund (PARWX), are less worried than most investors about Google's spending habits.

Tasho, who runs an Alexandria, Va.-based firm with $1.4 billion in assets, says Google demonstrated that, while the company did spend more money to retain key employees in the third quarter, the company delivered big profits.

"They realize it's a balancing act and that they need to invest in their own people to be as good as they are, but they also have to deliver for shareholders, too," Tasho says. "The lag in the stock price probably gave Google more of an impetus to put in more financial controls. They need to invest in the future, which is their employees, so I don't view it necessarily as a negative."

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $124.24 0.00%
GOOG $555.17 0.00%
YHOO $44.47 0.00%
FB $83.01 0.00%
TSLA $190.41 0.00%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs