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The Zacks Analyst Blog Highlights: Google, Facebook, Amazon.com, Microsoft and KB Home

Zacks Equity Research

For Immediate Release

Chicago, IL – March 20, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Google Inc. (GOOG), Facebook (FB), Amazon.com Inc. (AMZN), Microsoft (MSFT) and KB Home (KBH).

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Here are highlights from Tuesday’s Analyst Blog:

Google Acquires Infrastructure Startup

Internet search giant Google Inc. (GOOG) has acquired an infrastructure startup company, Talaria Technologies for an undisclosed sum to boost its cloud offerings.

Palo Alto-based, Talaria Technologies was founded by Austin Robison in 2011. It develops web application servers that add support and scalability to some of the most popular websites. After the acquisition, the Talaria team will become a part of Google’s Cloud Platform team.   

Talaria claims that its technology increases the efficiency of websites by allowing developers to use easier, high-productivity languages like Python and Ruby with the scalability advantage of a compiled language.

Facebook (FB) is also doing a similar exercise by removing its existing PHP code with Hip Hop, which easily transforms codes. This exercise is expected to reduce its hardware costs and boost its applications.

Amazon.com Inc. (AMZN) was one of the major pioneers of cloud computing. It modernized its own data centers and launched a cloud-computing business for external customers called Amazon Web Service (:AWS) in 2006. Recently, Microsoft (MSFT) also acquired cloud-monitoring startup MetricsHub to boost its cloud-based services.

Google’s acquisition may prove to be beneficial for the search giant, as the apps hosted on the Google cloud platform may now perform more efficiently. With Talaria’s technology, Google can run the apps using less hardware, thus giving it a cost advantage.

IDC predicts that the cloud market may grow 130% to $43.0 billion by 2016. Further, Gartner predicts that around $677.0 billion may be spent on cloud services within the 2013–2016 timeframe. Thus, Google should be able to tap this opportunity, which may boost its top-line going forward.

In the fourth quarter of fiscal 2012, Google’s gross revenue (including TAC) touched a record $14.4 billion, representing sequential and year-over-year increases of 2.3% and 36.2%, respectively. Excluding the $1.5 billion contribution from Motorola, revenues were up 21.9% from the year-ago quarter.

Google has a Zacks Rank #3 (Hold).

KB Home Closes Revolving Credit Facility

One of the leading homebuilding companies in the U.S., KB Home (KBH) recently closed a new unsecured revolving credit facility worth $200 million. The company intends to use the proceeds from the offering to support its growth plans.  

The credit facility included a clause where the commitment may be increased to up to $300 million, subject to other conditions.

Its growth plans include aggressive investment in land, activating communities, which were held for future development, increasing revenues per community, and strengthening management teams with additional resources.

Of late, KB Home has been involved in aggressive investment in land assets and communities. The rising demand for new homes has led to a favorable situation in the housing market, where inventory levels are dropping and prices are moving up. This has necessitated the building of adequate number of new homes to maintain the required level of inventory to meet growing demand. Acquiring lots and lands will help the company to capitalize on the increasing housing demand.  

KB Home intends to open more than 120 communities in 2013, with more communities slated to come up in the later half of the year. As such, the community count is expected to increase by at least 15% to 20% by the end of next year. The company expects profitability for fiscal 2013. The proceeds from the offerings will support the company in meeting its targets.

KB Home carries a Zacks Rank #3 (Hold).

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