Cramer's Blog: Google Makes More of Internet BuzzOriginally published on 7/10/2006 at 11:56 AM You have to be a believer about Google ( GOOG) taking over your phone business. If you don't, check out the story in today's Investor's Business Daily about what Google has done. The company has bought a ton of dark fiber, and it has bought stakes in companies that do broadband over power lines and Wi-Fi. I know eBay ( EBAY) bought Skype, where the sign-ups are hot and heavy. But the switching costs for this kind of stuff are going to be seamless. More important, you know Google wants to be an Internet Service Provider (ISP) -- it needs to do that just to grow, and I think that it is a natural to offer an all-in-one package. I think this initiative, stealth as it is, has hit eBay, along with a slowing in its core business (the company's not saying it is going into the ISP business). I also believe that Google has so much money, it simply isn't difficult to pull off, even as Yahoo! ( YHOO) declined to do it because of its partnership with AT&T ( T). But that partnership was made before it was obvious that phone calls were going to be free and you'd need to monetize it elsewhere. I don't see how eBay can monetize effectively.
Rev Shark's Blog: Stealth Capitulation Draws NighOriginally published on 7/11/2006 at 11:58 AM Capitulation is one of the most misunderstood and badly abused concepts in the stock markets. The word is thrown around with abandon and often just out of hope when the action is particularly miserable. The concept is the cornerstone of contrarian thinking and is an easy one to grasp. Capitulation occurs when emotions become so extreme that people can't stand to hold on to losing stocks any longer, and they want out at just about any price. This is an indication that a bottom is near because everyone who is inclined to sell has already done so, and there is little selling pressure left. Capitulation is most often thought of occurring in the form of a big whoosh down where there is a substantial point loss and then a quick snap back up as new buyers replace the capitulating sellers. The crash in 1987 is probably the best example of capitulation. The market was downtrending rather sharply for a couple weeks. The DJIA had already fallen from over 2600 to around 2200 when on Oct. 19, it crashed 508 points and closed at 1738. The next day the market bounced back 102 points and the following day another 187 points. The market continued in a trading range with a fair amount of volatility for many months afterward, but the bottom was in after the panic selling of Oct. 19. A crash like the one in 1987 is very rare. Much more frequently, capitulation occurs with a whimper of pain, not a crescendo of agony. The market is much more painful and cruel when it drips slowly lower over the course of many weeks. Those who are hoping and praying for a reversal are disappointed again and again, and the primary emotion is disgust. When no one can stand this slow painful process for another day, we bottom with a whimper and then slowly start to recover. The low the Nasdaq hit in October last year is a good example. The low point came intraday on Oct. 13, when the Nasdaq managed a 25-point intraday swing on slightly better-than-average volume. There was never a huge surge of selling, just a steady drip lower and then an intraday swing, from which a new uptrend developed. There never was anything that remarkable about the action. The downtrend simply went on long enough to wear out a sufficient amount of folks and cause them to give up. Capitulation took place with a whimper not a bang. I believe the great likelihood is that we will see a similar turn in this market. We aren't going to have any great dramatic events that will signal the low. It will occur when disgust, dismay and weakness sets up. This market is already starting to whine and whimper, and with earnings season coming up, I think we are getting close to stealth capitulation.
Cody Willard's Blog: Tech's Not a Zero-Sum Game
Originally published on 7/10/2006 at 2:51 PM You need a whole lot more than money
You need more than to survive
You need to keep your Love
Keep your Love alive -- Heart If I hear one more pundit or so-called analyst explain to me how Microsoft ( MSFT) today is IBM ( IBM) 20 years ago, I'm going to pull the bytes out of my hard drive -- er, the hair out of my head. OK, OK, we get it -- someone smart explained at some point how there are some parallels to the Internet wars between Google ( GOOG) and Microsoft and the PC wars that pitted Microsoft and IBM back in the day. The fact is, I think both Google and Microsoft are positioned to be big winners in the next few years, though I plan to own Google longer than I plan to own Microsoft. Specifically, the conventional wisdom (and, seriously, if there was ever a time to call something "conventional wisdom" in technology and the stock market, this is it) goes something like this:
IBM utterly dominated the computing world and was making money hand over fist as it had grown to dominate mainframe and centralized computing. Microsoft, with software purchased from the slums of Albuquerque, N.M. (one summer in college, I lived on the same block where the beginnings of Microsoft were developed), was about distributed personal computers and bringing computing power to the masses. IBM froze and refused to accept the new paradigm, and Microsoft rose to dominate computing so much that it's still being punished for being too successful -- er, for supposedly being a monopoly. Fast forward to 2006, and everyone (as in everyone) can explain to us how Microsoft dominates the computing world and is making money hand over fist as it has grown to dominate the distributed PC world. And now Google and others are coming up with all kinds of ways to distribute software and computing power over the Internet. The commentators then go on to explain how Microsoft is -- and this is where the conventional wisdom falls apart -- frozen and refusing to accept the new paradigm.As Cramer used to title his columns back when I first read him in 1997, "Wrong!" Look, Microsoft gets it. Bill Gates, Ray Ozzie and even the much-maligned Steve Ballmer understand that technology has gone, and is going, through another major paradigm shift that is enabling the masses yet again. And they're actively positioning the company to leverage that paradigm shift. They're rolling out a new operating system that will be the most user-friendly interface they can devise. They're integrating networking capabilities into every possible facet of the software.