Google Hangs On To China, but It's Too Late to Make up Profit Losses

Google Inc. (Nasdaq: GOOG) announced Friday that China renewed its Internet license to operate a Web site, but the previous months of tension have already damaged Google's chance at mainland profitability.

Google's chief legal officer David Drummond posted the announcement on the company's blog Friday morning.

"We are very pleased that the government has renewed our ICP license," Drummond wrote, referring to Internet content provider license. "And we look forward to continuing to provide Web search and local products to our users in China."

The license renewal should dissipate - at least, temporarily - months of tension that started earlier this year when Google claimed China was the source of cyber attacks on its databases and user e-mail accounts. Then the company said it would stop censoring search results in compliance with China's government regulations. China prohibits Internet users from accessing offensive and politically controversial material.

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Will Extreme Volatility Actually Stabilize the Markets?

Stocks tumbled across the board last week like a pair of dice rumbling around a craps table, rocked by extreme volatility.  Just when it looked like they were rolling up the unnerving loss of the critical 200-day average on Thursday, bulls' returned to the fray and pushed the major indexes just barely back into safe territory.

But is the market really safe? It's currently at the bottom of its multi-week range, so this is the time to get bullish again if you think the range will remain in force. The S&P 500 Index actually touched its February 2010 low on Friday before rebounding, which will give all the range-traders a green light.

Click Here to Find Out What Last Week's Extreme Volatility Means for the Markets...

Pacifying the Panda: U.S. Companies Must Take a New Approach to China

There's no question about what kind of profit opportunities the Chinese market offers. Moreover, the willingness of U.S. companies to partner with China in the pursuit of profit is equally blatant.

So why is it that more U.S. businesses feel less welcome in China now than they did four years ago?

The fact is that in the past four years, China's economy has continued to grow by leaps and bounds, while a humiliating financial collapse and soaring debt have tarnished much of the shine that once adorned the U.S. market.

Indeed, for the first time in perhaps more than a century China has the upper hand. How long that will last is a difficult question to answer, but right now, China wants to use its leverage to support domestic companies - and it's doing so unapologetically.

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Google Unveils Another Surprise Twist in China Drama

For the first time in two months there is a new development in Google Inc.'s (Nasdaq: GOOG) feud with China. The search engine today (Monday) began redirecting traffic from its China page,, to its uncensored Hong Kong page,

Google said the move is "entirely legal," and said it will continue research and development activities in China. Some market observers had expected Google to announce its total withdrawal from the country today, as the company's disagreement with Beijing had reached a standstill. But Google's new approach is another surprise development.

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Bulls Overcome Market Tug of War to Send Stocks off to Strong March Start

Stocks rose briskly last week, resulting in a big week for the major market indexes. Weekly and monthly index charts improved, and such major U.S. stocks as The Boeing Co. (NYSE: BA)Hewlett Packard Co. (NYSE: HPQ), American Express Co. (NYSE: AXP), Google Inc. (NASDAQ: GOOG), Apple Inc. (AAPL), Goldman Sachs Group Inc. (NYSE: GS) and General Electric Co. (NYSE: GE) emerged from flat-lining or faltering price patterns on decent, if not outstanding, volume.

Just two weeks ago, every one of the afore-mentioned stocks looked terrible, exhibiting intense apathy amid slow, grinding declines. Then the skies parted, and suddenly the sun is shining on these shares once again.

That's why U.S. stocks are off to a strong March start - already up 4.1% from the end of February. And don't forget, a year ago at about this time (March 9, 2009), the market reached its nadir: The Standard & Poor's 500 Index is up 69.98% since that time.

Here's why the shift seems so abrupt. The markets are now in a tug of war between two forces:

  • On the plus side are good fourth-quarter earnings reports related to an improving economy.
  • On the negative side - as a friend at a major macro hedge fund described it last week - are "frigid winds blowing across the credit icebergs."
To find out who’s winning the stock-market tug of war,

please read on…

Buy, Sell or Hold: JDS Uniphase Corp. (Nasdaq: JDSU) Is Yet Another Rising Star in the Broadband Revolution

We keep getting good news with respect to the broadband revolution. If you have not read my prior posts, do not miss this special report on it. These developments are revolutionizing the tech world right now and we are at the very inception of an explosive and highly profitable trend.

For starters, both the U.S. economy and the global economy are faring much better than most of the market expected. In fact, last Friday we saw February's retail sales blow away even the most optimistic forecasts. Sales excluding autos did particularly well, which is good news for Internet sales.

We also saw Cisco Systems Inc. (Nasdaq: CSCO) launch its new "super-router” which is many times faster than existing devices. This will speed up network traffic, enabling faster video, teleconferencing and downloading. More traffic means more bandwidth, and that means more infrastructure.

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Apple Goes "Island-Hopping" in its War Against Google

Apple Inc. (NASDAQ: AAPL) on Tuesday took aim at rival Google Inc. (NASDAQ: GOOG) and its Android operating system by filing a patent-infringement complaint with the International Trade Commission (ITC) against smartphone manufacturer HTC Corp.

Taiwan-based HTC is the largest maker of phones that use Google's Android operating system, such as the Nexus One. Apple involved the ITC in hopes of banning U.S. imports of HTC devices made with the technology in question. However, that filing was paired with a suit filed in federal court in Delaware that claimed infringement on 20 patents.

"We can sit by and watch competitors steal our patented inventions, or we can do something about it. We've decided to do something about it," said Apple Chief Executive Officer Steve Jobs. "We think competition is healthy, but competitors should create their own original technology, not steal ours."

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Profit From the Broadband Explosion With Cisco Systems Inc. (Nasdaq: CSCO)

Last Friday I unveiled my two most compelling stock ideas to the readers of my Money Map VIP trading service. They are the best ways to hop onto an exploding trend that I recently discovered and researched extensively - the exponential explosion in broadband traffic.

To learn more about this broadband explosion - and the two top stock picks I isolated from my research - check out this new report. It's a huge issue - with the potential to cause the kinds of network breakdowns and outright outages that could cost the economy billions of dollars and that could even cost people their lives.

In the course of my research, I discovered a third company that's perfectly positioned to benefit from this broadband paralysis. My conclusion: Cisco Systems Inc. (Nasdaq: CSCO) is going to see a lot of upside from this trend, too.

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China Can Stonewall Google, but Its "Great Firewall" is Really a False Front

China has been eager to portray itself as the winner in the recent global dustup with Internet-search giant Google Inc. (Nasdaq: GOOG). At the very least, however, China wants it made clear that it wasn't the loser.

Experts quoted in such state-run media outlets as Xinhua and The People's Daily have derided Google for abandoning the largest and fastest-growing online community in the world, and forfeiting $400 million and $600 million in annual revenue.

And while China's top officials have mostly avoided the topic, government spokesmen have defended the country's censorship practices as "consistent with international conventions."

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What China Can Learn From its Dustup with Google

If you're keeping score in the contest between Google Inc. (Nasdaq: GOOG) and China's central government, you should be aware by now that everyone involved loses.

  • Google stands to lose anywhere from $400 million to $600 million in annual revenue, as well as a considerable foothold in the world's largest and fastest growing Internet community.
  • Chinese netizens lose access to a search engine that is vital to the free transportation of online information.
  • China's online market loses the innovation and competition that is unique to one of the world's most dynamic companies.
  • And Beijing has been robbed of the illusion that it has enough economic muscle to strong arm the West into playing by its rules.

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Investment News Briefs

Alcoa Narrows Loss, Misses Estimates; Financial Services Fee Part of Obama's Budget Plan; China's Exports Grow For 1st Time in 13 Months; Google Slammed With Complaints on Nexus One Phone; Femsa Sells Beer Franchise To Heineken; IRS Set to Audit Harvard's Investments

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Buy, Sell or Hold: Google Inc. Sure to Surprise After Adapting to New Technology

When Google Inc. (Nasdaq: GOOG) reports its fourth-quarter and full-year earnings on Jan. 21, the Internet search giant is poised to once again surprise Wall Street by beating expectations and reporting an increase in market share.

It is awe-inspiring to think about what Google is and what it has accomplished in such a short period of time. Just this week, German Justice Minister Sabine Leutheusser-Schnarrenberger told the weekly magazine Der Spiegel that Google has already become a "giant monopoly" like Microsoft Corp. (Nasdaq: MSFT).

Google invented the very best search engine and now it is reaping the benefits.

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Investment News Briefs

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.

Kraft Raises Cash Bid for Cadbury; Google Phone Sales Begin; Automakers See Strong U.S. Sales Gains; Whitney Slashes Goldman Forecast; Gulf Infrastructure Gets a Boost; Construction Collapse; IT Obstacle

  • Kraft Foods Inc. (NYSE: KFT) has agreed to sell its DiGiorno and Tombstone pizza brands to Nestle SA (OTC ADR: NSRGY) for $3.7 billion, using all the net proceeds from the sale to boost the cash portion of its offer for Cadbury PLC (NYSE ADR: CBY) . In related news, Warren Buffet's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) voted against Kraft's offer to issue up to 370 million shares for the Cadbury acquisition, saying it would change its vote if the transaction doesn't "destroy value for Kraft shareholders." Berkshire's stake of more than 9% in Kraft makes it the food maker's largest shareholder. Nestle, meanwhile, formally took its name out of the running of any possible bidders for Cadbury in a terse statement.

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Hot Stocks: Apple's Acquisition of Quattro Puts It on a Collision Course with Google

With its acquisition of Quattro Wireless, Apple Inc. (Nasdaq: AAPL) has opened the door to competition with Yahoo Inc. (Nasdaq: YHOO), Microsoft Corp. (Nasdaq: MSFT), and especially Google Inc. (Nasdaq: GOOG) in the mobile advertising market.

And Apple's venerable App Store will play a key role in the company's expansion.

All Things Digital, a tech blog affiliated with The Wall Street Journal, reported the deal's value at $275 million, citing several anonymous sources. It is the 24th acquisition in Apple's 34-year history, and is characteristic of the previous 23: buying a small company that can easily be integrated into its existing projects.

In this case, Apple can use mobile web ads developed by Quattro to generate income from outside advertisers.

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Investment News Briefs

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.

Sovereign Fund Attempts to End $7.5 Billion Citi Share Purchase; Credit Suisse to Pay U.S. $536 Million Penalty; Cohen: U.S. Economy to Slow in 2010; Roy Disney Dead at 79; Former TPG, Lazard Employees Sued by SEC for Insider Trading; Galleon Group Founder Indictment Alleges Fraud, Conspiracy; Comcast Launches Online TV Service

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