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A federal jury here ruled that Google’s use of Oracle Corp.’s Java software didn’t violate copyright law, the latest twist in a six-year legal battle between the two Silicon Valley titans.

Oracle sued Google, a unit of Alphabet Inc [stckqut]GOOGL[/stckqut] [stckqut]GOOG[/stckqut]., in 2010 for using parts of Java without permission in its Android smartphone software. A federal appeals court ruled in 2014 that Oracle [stckqut]ORCL[/stckqut] could copyright the Java parts, but Google argued in a new trial this month that its use of Java was limited and covered by rules permitting “fair use” of copyright material.

A 10-person jury on Thursday agreed.

Google acknowledged using 11,000 lines of Java software code. But it said that amounted to less than 0.1% of the 15 million lines of code in its Android mobile-operating system, which runs most of the world’s smartphones.

Source: Google Wins Java Copyright Case Against Oracle

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Google parent company Alphabet [stckqut]GOOGL[/stckqut] has taken away Apple’s title as the most valuable company in the world by reaching a market value of about $544 billion in after-hours trading today.

Alphabet closed Monday at around $518 billion, but its after-hours stock spike means that it’s bigger — for now. We’ll see if it maintains that at tomorrow’s open.

Apple [stckqut]AAPL[/stckqut] passed Exxon Mobil [stckqut]XOM[/stckqut] in 2011 to become the most valuable public company in the world, worth around $350 billion, before falling to about $538 billion at today’s close.

The changing of the guard here has less to do with an ascendant Alphabet and more to do with Apple’s iPhone sales, which are beginning to slow down. When Cupertino released its earnings report last week, it posted its slowest growth in phone sales since Apple introduced the iPhone in 2007.

Source: Google Surpasses Apple as the Most Valuable Company in the World | Re/code

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When Google-parent Alphabet Inc. [stckqut]GOOGL[/stckqut] reported eye-popping earnings last week its executives couldn’t stop talking up the company’s investments in machine learning and artificial intelligence.

For any other company that would be a wonky distraction from its core business. At Google, the two are intertwined. Artificial intelligence sits at the extreme end of machine learning, which sees people create software that can learn about the world. Google has been one of the biggest corporate sponsors of AI, and has invested heavily in it for videos, speech, translation and, recently, search.

For the past few months, a “very large fraction” of the millions of queries a second that people type into the company’s search engine have been interpreted by an artificial intelligence system, nicknamed RankBrain, said Greg Corrado, a senior research scientist with the company, outlining for the first time the emerging role of AI in search.

RankBrain uses artificial intelligence to embed vast amounts of written language into mathematical entities — called vectors — that the computer can understand. If RankBrain sees a word or phrase it isn’t familiar with, the machine can make a guess as to what words or phrases might have a similar meaning and filter the result accordingly, making it more effective at handling never-before-seen search queries.

Source: Google Turning Its Lucrative Web Search Over to AI Machines – Bloomberg Business

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While Google’s moves of late may suggest an identity crisis, the Web search giant’s third-quarter results should provide a clear affirmation of what exactly it is.

Namely, Google is a $60 billion-a-year advertising business that is still growing at a double-digit rate, even if it now reports results under the moniker of its new parent company Alphabet [stckqut]GOOGL[/stckqut]. Ad revenues of $16.8 billion in the third quarter were up 13% year over year. Notably, paid clicks jumped by 23%, well ahead of the 18% gain projected by analysts. That’s the best growth shown by that measure in more than a year and was chalked up to strength in mobile search and the company’s YouTube business.

This all drove a 45% surge in net income, which soundly beat Wall Street estimates. The company also threw in a surprise in the form of a $5.1 billion share buyback—its first significant cash return program on record. Alphabet’s shares jumped in response, and built on its 13% gain since its last quarterly report.

Source: What Google’s Alphabet Spells for Investors – WSJ

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carly fiorina photoCarly Fiorina is currently a candidate for President of the United States of America. She is campaigning for the nomination of the Republican Party to run in the general election of 2016. According to her, one of her strengths is her business background. Most notable she speaks of her background as the first CEO of a DOW30 company: Hewlett-Packard [stckqut]HPQ[/stckqut].

This site is purposefully non-political. While I tend to be a conservative and have voted for a Republican candidate more times than not, I do not want this site to reflect my personal political thoughts. I will occasionally point out a law or regulation that is tough on investors or the business community, but success at investing must be an apolitical activity. In fact, I have written that investors should probably ignore politics and political turmoil when investing.

I am writing this article simply to analyze the success of Ms. Fiorina or the lack thereof. I am fairly hard on companies and their management. It takes a lot to make my Watch List, and most companies cannot achieve that level of performance. I doubt that HP would have made that list while Ms. Fiorina was CEO, and it certainly cannot make that list today.

donald trump photoIronically, her record at HP is one of the criticisms of Ms. Fiorina. Donald Trump is famous for criticizing her as a failed CEO, and he often cites the writings of Jeffrey Sonnenfeld. It is virtually impossible to compare the success of Donald Trump as CEO with Ms. Fiorina as CEO since Mr. Trump’s businesses are not public entities while most of Ms. Fiorina’s career has been with public entities. It is possible to dig into Ms. Fiorina and see just how lousy she was as the leader of a massive corporation.

I will point out that there is an incredibly different scale in Ms. Fiorina’s career with Mr. Trump’s career. It is unlikely that in 1999-2005 (the time when Ms. Fiorina was CEO of HP) that Mr. Trump’s combined businesses would have cracked the Fortune 500 in revenue. In comparison, Ms. Fiorina was in the DOW30, which the Dow Jones company creates to give the best representation of the overall health of the stock market. In other words, Ms. Fiorina was in the big leagues while Mr. Trump was making a lot of personal money in the minor leagues.

So how did Carly Fiorina do as CEO?

It is probably best to take a look at her critics. Mr. Trump is fairly light on details, but he cites Mr. Sonnenfeld, so let’s look at his criticisms as revealed in Politico.

  • In the five years that Fiorina was at Hewlett-Packard, the company lost over half its value.
  • During those years, stocks in companies like Apple and Dell rose.
  • Google [stckqut]GOOG[/stckqut] went public, and Facebook [stckqut]FB[/stckqut] was launched.
  • The S&P 500 yardstick on major U.S. firms showed only a 7 percent drop.
  • At a time that devices had become a low margin commodity business, Fiorina bought for $25 billion the dying Compaq computer company, which was composed of other failed businesses.
  • The only stock pop under Fiorina’s reign was the 7 percent jump the moment she was fired following a unanimous board vote.
  • Fiorina countered that she wasn’t a failure because she doubled revenues. That’s an empty measurement.
  • She hasn’t had another CEO position since her time at HP

Let’s look at each of these accusations.

In the five years that Fiorina was at Hewlett-Packard, the company lost over half its value.

This is true and is a great reason that it was probably foolish to purchase the stock of HP in that time period. However, to accurately gauge the failure we must look at the reasonable peer group of HP. I contend that the reasonable peer group was Dell, Apple [stckqut]AAPL[/stckqut], Oracle [stckqut]ORCL[/stckqut], IBM [stckqut]IBM[/stckqut], Cisco [stckqut]CSCO[/stckqut], and EMC [stckqut]EMC[/stckqut]. I choose this group for several reasons. They are all quite large and, for the most part, they got their revenue at that time from either selling personal computers or from selling large and complicated systems to the IT departments of major companies.

Unfortunately, Google Finance only shows a weekly price for that long ago. While Ms. Fiorina joined HP on July 19, 1999, and left on February 9, 2005, those dates are not exactly available on Google Finance. The exact dates may be available on other sources but using Google Finance makes it easy for my readers to play with the dates as well as throw in other comparison companies.

HP comparison chart

 

If we look at the above chart it goes from July 9, 1999, to February 18, 2005. This is a very close approximation to Ms. Fiorina’s joining and departure dates. A quick appraisal shows that only Apple and Dell increased in value during this time frame. The other companies decreased in stock value, and most of them decreased in the same approximate range as HP.

In fact, you can see that several of these companies, including HP, had peak prices shortly after Ms. Fiorina joined HP. Many of the companies had significantly bigger drops than HP during the period. If we move the start date to March 2, 2000, you will see that most of these large enterprise-IT sellers had much larger drops in stock value than HP. Obviously, this was a major challenging time for companies that sold in the same market as HP. Even Apple dropped over 70% by the end of 2000. Remember, Apple at this time was not the amazing gadget, phone and entertainment content seller of today, but instead a computer company that was quite reliant on selling personal computers.Read More →