Google’s Move Will Spark a New Price War

Google (GOOG) has ramped up the competition in cloud computing through the announcement of the general availability of Compute Engine. Google’s Compute Engine was initially launched about one and a half years ago but it was only available to some of its clients. With this push with cloud computing, Google seems intent on drawing large corporate customers as it aims to broaden its revenue base in the long run. Through its powerful brand, aggressive pricing and attractive features, Google believes that it will be able to emerge as a new major player in this market.

Google, however, has a long way to go before it becomes a real threat to the total dominance of Amazon (AMZN). The Compute Engine comes with agreement of performance, which guarantees that through this, the high volume workload will continue working 99.95% of the time, which is significantly above what is generally considered as the industry standard. In addition to that, the company has also cut the prices of its most popular Standard Instances, where clients can use Google’s computing power, by 10% in all regions. Moreover, the prices for Persistence Disks service have also been reduced by a massive 60% per gigabyte.

Besides the price cuts, Google has also added some new features to lure customers such as …. read full article at GuruFocus

Netflix Is Overvalued But Has Enormous Potential: Is It A Buy?

From Seeking Alpha

The rise of Netflix (NFLX), or other companies offering video streaming services such as Amazon (AMZN), is the biggest threat to the status quo of American cable. In its last quarter, Netflix was able to add 630,000 domestic streaming subscribers, which was in line with its guidance of 230,000 to 835,000 additions and an improvement from 530,000 additions reported in the same quarter last year. The company's total domestic streaming base has now reached 29.8 million. Netflix is eyeing 700,000 to 1.2 million net additions in the current quarter. Therefore, we can safely assume that Netflix's domestic subscriber base will easily cross the 30 million mark when it reports its next quarterly results.

Traditional Cable Television On The Back Foot

Essentially, every additional streaming subscriber of Netflix, Hulu or Amazon is a loss to traditional cable television companies such as Cablevision Systems (CVC). I have been a believer in the idea that the future of television lies on the broadband, but to my surprise, the head of Cablevision has also said something to this effect. In a recent interview to Wall Street Journal, James Dolan, the CEO of Cablevision said that "there could come a day" when broadband would dominate the industry. While analysts have been pointing out the changing landscape for a long time, but a head of a cable company has never made such comments. I believe this implies that Cablevision's current business model is approaching obsolescence ….. Read More