My Take On All This Google Stuff Going On.....

I recently added exposure of GOOG back under $590 and I likely won't let this China issue knock me out of it. However, the breach of the 50 day may hold me back from purchasing shares right away so I can gauge the reaction and see how much cheaper I can acquire shares. Don't get me wrong, I'm an aggressive buyer on weakness but sometimes you have to sit back and see what the market gives you.

Back to GOOG and my take on the financial ramifications:

* My estimate is that GOOG is only getting $240-350mm (per annum) in revenues from China. And I may even be high with that on the midpoint.

* I don't know what GOOG is making in EPS from China but I suspect it's not much.

* I did a lot of work on this years ago (2-3 years) and if this is still the case -- much of the GOOG searches are essentially taken from them and/or routed to BIDU. This was one of the reasons for owning BIDU early back in the day.

* Holistically I like the hard line stance from GOOG.

* I think this will hurt the share price short term, far more than any real damage to business -- both short and long term.

* Long term the implications are potentially powerful as this engenders a lot of powerful positive emotions to potential Chinese users....

* Does this tell us anything about how its quarter is shaping up, or how it feels about internal business growth?

* Does this also curry some favor with the US government in that GOOG may find info to help with trade negotiations? Jury is out on this one....

* Before BIDU totally uncorks the champagne -- GOOG isn't out of China yet and had been slowly grabbing some share.

* Lastly, I do see BIDU as a potential short should it ramp parabolic... say a $65-80 move higher.

Bottom line, I don't think this changes the story with GOOG at all. It certainly doesn't hinder nearer term revenues and eps generation and any damage to the stock is likely short term but also unknown.

However, as stated, it's hard to know how much they'll take out of GOOG due to this story. So I'm on sidelines until either; 1) the technical's clear up, 2) we get a few days closer to earnings (which will be huge), or 3) the stock falls below $575......

long GOOG