Google Getting Really, Really Good at Tax Avoidance

My dad was a tax / estate attorney and he said there’s different kinds of folks who don’t like to pay taxes. Those who evade (work outside the law) and those who avoid (use the tax law to their benefits). Turns out the folks at Google are getting great advice from their accountants. According to Bloomberg Business Week Sergei, Larry, Eric and the gang are only paying 2.4% in taxes to Uncle Sam due to an elaborate structure of offshore companies that somehow allow Google to move their profits to Bermuda where there is no corporate income taxes.

Google Testing Robot Cars? Taking the Fun Out Of Driving?

The New York Times reported that Google was out testing robot cars. I guess this is an outgrowth of their participation in the Darpa Challenge, a US government funded competition to encourage the development of “an autonomous vehicle capable of driving in traffic, performing complex maneuvers such as merging, passing, parking and negotiating intersections”.

We at Observer Publishing feel that the US is on the verge of becoming a ‘nanny state’ that’s already trying to legislate away our enjoyment of fried food (trans fats & obesity) and our economic independence (health care reform and punitive taxes on small biz owners). If you subscribe to our theory, you should enjoy while you can the ability to pilot a sports-tuned automobile down a twisty road with no one in sight (other drivers, pedestrians or police).

So why this political diatribe? What does it have to do with Google? Because the Intellectual Property around cars that drive themselves will be REALLY, REALLY valuable due to governmental regulation of our driving habits. If the brains within the GooglePlex can capture this IP, the company will stand to make OODLES over the next decades from this technology. The insurance companies are already lobbying regulators to install 24/7 monitoring devices in your car to measure speed and driving behaviors. Why not take this a step further and mandate automobile technology that automates the process very politely and uninterestingly to your destination without you, the driver, ever touching the steering wheel. In the process Google would get a sliver of the value of every new auto transaction and possibly every older car retrofit as demanded by state and local government.

I can see a few bits of upside to this. Now you can spend all your traveling time to the office reading the paper, eating your McDonald’s drive-thru with two hands and no more distracted driving – text or read facebook all you want! Also, if you have young children who are approaching driving age, one could sleep easier at night knowing that your Ford Taurus is guarding their safety.

However, if you’re like me, watching Top Gear religiously, always looking for a reason to drive across town to the hardware store and enjoying spirited but safe driving in a vehicle that uses a bit too much gas but is a hoot to manuver both around town and on a 70MPH highway, the thought of an autonomously guided car is one more reason to head to the old folks home and dream of winning that day’s ‘Bingo’ pot.

Facebook Looking To Compete with Google’s Android Phones?

The stories keep coming about Google’s efforts to dominate the smartphone market with their Android Operating system. Well itturns out another internet media powerhouse is trying to make a play for stardom and riches in the world-wide mobile market.

TechCrunch (no relation to Observer Publishing LLC) reported this week that Facebook may be trying to develop its own smartphone OS and accompanying hardware.

Specifically, Facebook wants to integrate deeply into the contacts list and other core functions of the phone. It can only do that if it controls the operating system.

Two high level Facebook employees – Joe Hewitt and Matthew Papakipos – are said to be secretly working on the project, which is unknown even to most Facebook staff.

Its a novel concept to hear about Facebook trying to find a deeper connection with its userbase. Back in 2006, I often referred to Facebook as an online operating system and that was before they opened the platform up to developers and proved that FB was more than an “app” but a network for its customers to connect via a number of applications. If you’ve ever used Facebook you’d realize how hard they make it to export contact info into other e-mail applications. This would allow FB to have a stranglehold on their customers information and relationships.

Personally, we don’t see this being successful if it happens at all. Its a lot easier to integrate Facebook into a smartphone UI like HTC’s ‘Sense UI’ than it is to have a stand-alone phone operating system. Some carriers may want to distribute a FB branded phone, but to think that they could capture a meaningful share is a bit of a stretch.

More to come as the story unfolds….

Industry Analysts Predict Tablets To Eat Into PC Industry Volumes

Two significant reports came out today from PC industry watchers which suggest that the exploding tabletform-factor, popularized by the Apple iPad and pending Google Android powered devices, will eat into traditional computer volumes.

Maynard Um with UBS Investment Research issued a note to investors this week, in which he increased his price target for AAPL stock to $350, up from $340. He said there is no evidence that the iPad is having a negative effect on Mac sales, but it is “adversely affecting the PC industry.”

“Sales of traditional notebooks appear to be feeling pressure from the iPad, causing a scramble by vendors to launch iPad-like tablets,” Um wrote. “We believe that a majority of this impact is occurring on the lower end of PC sales as the iPad is priced close enough to this range that it becomes attractive to consumers looking to make purchases within this segment.”

He continued: “We are not sold that the iPad is purely cannibalizing PC sales, as the functionality of the iPad cannot yet deliver the functionality of notebook PCs. However, consumers who purchase iPads may be more willing to delay purchases and upgrades of existing PCs.”

In the second report, Ben Reitzes an industry analyst from Barclay’s Capital, lowered his sales estimates for regular PC’s and raised his expectations for Tablets.

Reitzes tweaked his tablet estimates in the opposite direction, raising his 2010 forecast to 15.85 million units (up from 15.2 million earlier) and his 2011 forecast to 31.2 million (up from 28 million earlier). He cites three main factors for the increase: greater availability of the iPad; upcoming international launches of the device; and imminent tablet launches from other manufacturers. Though the tablet category remains relatively new, Reitzes points to “strong initial demand” as evidence that sales will rapidly increase over the next two years.

Introducing ‘The Google Observer’

Welcome to Day 1 of ‘The Google Observer’.  Produced by Observer Network Publishing, LLC (Observer Network), our network of sites are based around familiar companies in the technology space.

We’re looking to provide a different blogging experience than you’ll find at other sites. Sure, we plan to provide scoops on new products, highlight controversies, and speculate on industry trends. What we seek to do differently is provide you the reader an industry-insider perspective on how these companies think and help you understand and anticipate why they make the decisions they do.

Please let us know how we’re doing. If there are posts you like, let us know. If you have feedback and suggestions to improve we really want to know and hope you’ll use our contact page.