Friday File: Facebook, Alphabet, Amazon and other portfolio updates

By Travis Johnson, Stock Gumshoe, July 28, 2017

This week I’m breaking up the Friday File into two parts — there was a clamor of request to cover the latest “Code of Life” teaser pitch from Michael Robinson, so I did that for you in a separate piece today…

And I’ve also got some comments about recent earnings updates and some other news from my Real Money Portfolio companies, so I’ll share that with you here:

Yatra (YTRA), the Indian travel company I wrote about a few weeks ago, announced a pretty substantial acquisition this week as it tries to gain a real foothold in the corporate travel market and scale up to compete with giant MakeMyTrip — Yatra is buying Air Travel Bureau, which will add that company’s 400 large and medium-sized business clients and about 15 billion INR in gross bookings to Yatra’s top line.

The price for the deal was not disclosed, so they must be using cash (they have plenty), and it’s not necessarily huge.  We have no idea what the margins are, and “bookings” is a strange number because it doesn’t really represent revenue (the real revenue is just the commission they get on the bookings, they don’t really process the cash that goes to the hotel, or to the airline), but it is a measure of the level of business being done, and on that metric it’s a meaningful but not earth-shattering deal.  Yatra for their past fiscal year had gross bookings of 69 billion INR, so adding 15 billion to that does provide some additional scale and at least some growth potential — but it’s not a game-changer, which is probably part of the reason why the stock popped up temporarily and then came back to earth a day or two later as investors had time to actually look at the numbers.  This makes the company marginally more valuable, and it gives them some differentiation from their larger rivals perhaps, but it’s probably not going to be a big deal in ten years — the big prize is market share in mass individual bookings, not corporate accounts.

Alphabet (GOOG) disappointed a little bit with their earnings release this week, so that means they’re now 4% below their all-time highs.

Yawn.

It’s still a duopoly (with Facebook) in global internet advertising and mobile advertising and, increasingly, video advertising thanks to YouTube’s continuing dominance… and it is still vastly more diversified than Facebook thanks to its many ...

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