It's no secret that Google makes its living from advertising, both display and search-related. How much of Google's $15.42 billion in revenue generated in the recently completed 2014 first quarter is attributable to search? That's not something CEO Larry Page chooses to share, but it's safe to say Google search still drives a significant portion of overall sales.

Research firm eMarketer estimates that Google will earn $15 billion in net search advertising revenue this year, a jump of about $1 billion from 2013. Yahoo! earned over one-third of its $1.13 billion in revenue last quarter from search. And the ancillary revenues derived from search likely make up an even bigger portion of each search giant's total advertising pie. But what if online search started to decline drastically, or, worse yet, disappear altogether?

What's the problem?
The long-term concern is the growing number of online users who are shifting from desktops to all-in-one mobile devices. Mobile users don't use search as often as PC users, they're too busy running their apps. According to one mobile industry pundit, on average Android smartphone users search the Internet with a browser, such as Google or Yahoo!, a mere 1.25 times daily.

Though Yahoo! was able to buck the declining search revenue trend last quarter compared to its 2013 first quarter -- sending it up 5% to $445 million on a generally accepted accounting principles basis -- CEO Marissa Mayer can read the writing on the wall. Not only is Yahoo! aggressively building out its content offerings in an effort to transform itself into a destination site, in addition to a portal like Google, both companies are laser-focused on boosting their respective suite of mobile solutions.

According to eMarketer, Google's new mobile-friendly enhanced campaigns -- which essentially force advertisers to go mobile if they want to bid on desktop ads -- as well as product listing advertising alternatives, are helping to offset the trend of fewer mobile searches. Product listings include pictures and are historically more effective for Google's advertisers.

But neither Google nor Yahoo! are out of the woods, and both think they've found the solution. This shouldn't be surprising considering Mayer's history as the head of Google's products division a few years back.

The solution
A steady drop in mobile search should spell big trouble for the two search giants, right? It would, except for something called "context," or what Mayer referred to in 2010 while with Google as "contextual discovery." According to Mayer four years ago, contextual discovery was "a little like getting search results without having to actually perform the search." Though she's since updated her term to contextual search, the concept's the same. With so much data at the fingertips of these search giants, the idea is to provide you with the information you need, before you ask for it.

Mayer cited a couple of examples, including your smartphone automatically loading the menu of a restaurant you just arrived at, without requiring a search of the web. That was four years ago, and Mayer still loves the idea. At a tech conference a few months ago, Mayer echoed her same theme from 2010 regarding context.

Not surprisingly, Google has been hard at work developing the right way to substitute mobile context for search, too. Google introduced a watered-down version of context search when it rolled out its voice recognition search a year ago. But a lot has changed in the past year, which is confirmed by last year's hands-free "upgrade," which Google targeted exclusively for PCs. A truer version of the future of search is Google's Now solution. Google Now isn't the end of its search for context, but it's getting closer.

Final Foolish thoughts
Mayer remains "long on search," and hopes to continue growing revenue from the division, particularly via mobile. Nor has Google given up its search efforts, there's simply too much on the line to do that. So the "death" of search may be slightly exaggerated, but Ellison and Mayer both recognize that search as we know it today won't be the search of tomorrow. Is context search too much of a good thing? Some might find it a bit unsettling to learn their smartphone knows what they want before they do. But ready or not, here it comes.

Having a strong network is key to an airline's success, and European routes are becoming highly sought after by non-European airlines. Actions taken by Delta Air Lines and Etihad Airways are shaking up who competes for the money spent by European travelers.

Airline regulation
Through the latter half of the 20th century, most nations moved to deregulate their airline industries, thus allowing carriers to pick new routes, new times, charge different prices, and compete with one another.

However, compared to most other industries, airlines still remain highly regulated when it comes to international routes and ownership. Most nations have restrictions on the ownership and control of airlines that operate within their aerospace, and the European Union is no exception. According to Reuters, to obtain an operating license in the E.U., carriers must be at least 50% owned and "effectively controlled" by an E.U. member state or citizens.

International airline management
With similar restrictions existing in the U.S. and Canada, airlines have used alliances of partner airlines to form strong international networks. Sometimes, to create a special partnership deal, airlines will purchase minority stakes in other airlines.

In Delta's case, the airline wanted to increase its presence at London Heathrow Airport, which is particularly popular with high-revenue business travelers. But with Heathrow being a highly popular, slot-restricted airport, Delta pursued a joint venture with Virgin Atlantic to increase its presence. By purchasing a 49% stake in Virgin Atlantic from Singapore Airlines, Delta and Virgin Atlantic established a joint venture to boost Delta's presence at London Heathrow.

Etihad Airways, a state-owned Middle Eastern carrier, has also been looking to compete in Europe but is subject to the same ownership laws as other non-European carriers. To get around this, Etihad has been establishing partnerships and buying stakes in European airlines, including Air Berlin and Aer Lingus.

Now, Etihad is eying Italian flag carrier Alitalia. Alitalia has had a long and mostly unprofitable history, with its most recent cash call resulting in the dilution of Air France-KLM's 25% stake down to 7% as the Franco-Dutch carrier declined to inject more money into the unprofitable airline.

As Alitalia is still looking for cash, Etihad is considering the airline as a way to expand its reach in Europe. Air France-KLM left talks concerning additional funding for Alitalia after Alitalia refused to more aggressively restructure debt and cut unprofitable operations. In February, Air France-KLM noted it was still interested in Alitalia if its conditions were met. This raises the possibility that if Etihad can extract better terms from Alitalia, both Air France-KLM and Etihad could move in to partner with and recapitalize the Italian flag carrier.

Investing in European skies
Etihad Airways is not open to outside investment because of its state ownership by Delta Air Lines and Air France-KLM are both publicly traded. Delta offers exposure to the U.S. airline market, parts of international markets, and a specialized joint venture between North America and London Heathrow.

Air France-KLM offers more direct European exposure along with the potential upside of a deal with Alitalia if an agreement can be reached. For U.S. airline investors, gaining some exposure to European airline operations can help round out an airline portfolio, making these carriers worth a look.

After opening lower this morning, U.S. stocks finished ahead on Monday, with the benchmark S&P 500 gaining 0.1%. Meanwhile, the narrower Dow Jones Industrial Average rose 0.2%, while the technology-heavy Nasdaq Composite Index was up 0.3%. In company-specific news, shares of the world's most valuable company, Apple closed above $600 for the first time in over a year and a half. That level in itself isn't particularly meaningful, but it's an opportunity to examine some of the factors that are underpinning the recovery in the share price -- and one that isn't!

Split happens
First, here's one reason Apple's stock didn't break $600: the imminent 7-for-1 stock split the company announced along with its fiscal second quarter results on April 23. The announcement may have had a (very) small, (very) short-term effect on the stock price, resulting from buying by short-term momentum "investors." Fundamentally oriented fund managers, on the other hand, won't have bought the stock on that basis. As far as making Apple's stock "more accessible to a larger number of investors," per the stock split FAQ on Apple's website, that wouldn't have any effect until the stock begins trading at its split-adjusted price on Monday, June 9. At this stage, the aggregate effect is zero.

Another bad argument I have read relating to the stock split is that it will enable Apple to be considered for inclusion in the Dow Jones Industrial Average and that this is positive for the share price. The Dow is price-weighted, so, at $600, Apple's stock would have a lopsided weighting in the index -- roughly 15 times that of Microsoft, for example. The original observation is correct: The stock split does remove a barrier to inclusion in the Dow. However, the conclusion is false, as the total amount of assets that track the Dow is insignificant.

(For an even more wonkish discussion of Apple's split, I recommend this post from the Financial Times' Alphaville blog -- registration may be required.)

Here's matters for Apple's stock price
Instead, the April 23 fiscal second-quarter results have clearly been the catalyst for a re-rating in the shares (from close just before the announcement, the stock is up 14.5%). Specifically:

• Growth matters: In its March quarter, Apple soundly beat Wall Street's expectations on revenue and earnings-per-share (by 5% and 14%, respectively), proving that it still has the capacity to genuinely surprise investors and that its growth engine is not stalled, let alone reversed.
• Cash matters: Simultaneously, Apple announced that it is raising its dividend by 15.5% and adding $30 billion to its existing share repurchase authorization, to be put to use before the end of 2015.

What's missing from this picture? As legendary activist investor Carl Icahn -- one of Apple's top shareholders -- tweeted on April 23:

Agree completely with $AAPL's increased buyback and extremely pleased with results. Believe we'll also be happy when we see new products.

— Carl Icahn (@Carl_C_Icahn) April 23, 2014

Indeed, Apple CEO Tim Cook has promised a new product category this year; Apple has not launched a new product since the introduction of the iPad in January 2010. Will a new product be the catalyst for the next significant share gains? In the short term, it's the most obvious one, yes. Reuters ran a story this morning according to which the company is on a hiring spree in the area medical technology, which suggests a wearable technology device could be in the pipeline.

Longer term, a successful new product category will be instrumental in fueling Apple's future growth. At 12.2 times forward earnings per share, however, the growth hurdle for shares doesn't look excessive, particularly when one takes into consideration the beneficial effect of repurchasing shares that are undervalued. Naturally, however, the margin of safety is smaller today that it was on April 23, with the shares at $524.75 -- on that day, both Cook and Icahn declared they were still undervalued. The $600 level is another reminder that Apple shares are getting closer to fair value.

The stock market held its ground on Monday, ending with modest gains on a day that didn't bring much in the way of economic data. Wall Street's sole focus now is on earnings season, a fact that worked against shareholders in Whole Foods Market , Pfizer, , and The Clorox Company . One of these companies hasn't even reported earnings yet, but the mere anxiety surrounding the impending results was still enough to dent shares. The S&P 500 Index , for its part, added 3 points, or 0.2%, to end at 1,884.

Source: company website

Whole Foods Market is the only one of today's three laggards that hasn't yet announced earnings. Still, the market seems confident that the company will disappoint, an opinion evidenced by Whole Foods' 2.8% drop today. I think skepticism over its long-term prospects is well-founded: While Whole Foods has been remarkably successful to date, there's no stopping competitors from cashing in on the organic food craze. The stock was downgraded today by Wolfe Research and its price target was cut by Oppenheimer ahead of tomorrow's second-quarter results.

Shares of Pfizer lost 2.6% today, as the pharmaceutical giant reported sales significantly below expectations. While net income jumped 12%, revenue actually fell by 9% in the first quarter to $11.35 billion. Sales of the arthritis drug Celebrex, which could lose its patent protection at the end of this month, missed Wall Street forecasts by more than $75 million. Clearly demand for Celebrex was more elastic than expected, as those in need of arthritis medication showed their willingness to wait for a cheaper, generic alternative.

Finally, Clorox shares continued their recent slide, losing 2.5% on Monday. The stock has now lost ground in four of its last five sessions, including last Thursday, when the international consumer goods company reported subpar quarterly results. Investors don't look at Clorox stock and think, "Sign me up for some of that blowout growth!" but interestingly enough a major part of its investment appeal is tied to emerging markets. That's because overseas markets are, in a nutshell, the only place a company like Clorox can grow, given its saturation in the U.S. But with new markets come new risks, and Venezuela's recent decision to devalue its currency hurt Clorox, as proceeds from its operations in the country -- measured in bolivars -- converted more harshly to U.S. dollars, the language of Wall Street.

"Beware those who seek constant crowds, for they are nothing alone."
-- Charles Bukowski

"The United States stock market, the most iconic market in global capitalism, is rigged."

So says Michael Lewis. His most recent book, Flash Boys, has drawn a huge amount of scrutiny to what really isn't a new problem: high-frequency trading, or HFT. It's a debate that's been going on for some time on Wall Street, and we should be grateful for Lewis' storytelling ability to make such an arcane topic accessible to the general public.

The attention and scrutiny given to Flash Boys has resulted in the definitive answer to one question: "How can an author sell a lot of books?"

On other questions, there is unlikely to be a definitive answer, in part because of what is the most fascinating revelation of the debate so far: No one really knows how the stock market actually works.

To me the question is whether HFT is a malevolent force -- and I believe that it is. Further, I believe that the actions of the players are much more important than what they say. So while this debate will certainly focus on what Lewis got wrong (and make no mistake, he did get things wrong), those who profit from HFT will attempt to use those errors to extrapolate that Lewis' entire premise is wrong. In classical rhetoric, that's known as a "fallacy of stupidity."

Here's my own primer. It is basic and also certain to be wrong in parts (see "no one really knows," above).

1. The markets are, and have always been, about speed. There's a reason traders don't stand around the Buttonwood tree anymore, and why the stock market scene from Trading Places now looks so anachronistic. Electronic trading has made the buying and selling of stocks (and other financial instruments) more efficient, lowering spreads, and trading costs for everyone. HFT is a kind of electronic trading, but the two are not the same thing. I don't think that things like sub-second trading add much to the market (where "much" equals "liquidity"), but I sincerely doubt that this is the source of many problems, either.

2. Market participants have always accessed the market at different speeds. Some people traded by telegram while others went to telegraph. Others had phone access, then dial-up modem access, then broadband, then direct fiber collocated at the exchange. No competent argument should posit that access speeds to the markets should be identical for all participants because this is impossible. And dumb.

Market participants have similarly always used these speed differentials to their advantage. It's why companies set up massive day-trader pits in the 1990s. In our business of running mutual fund portfolios, we have certain algorithms that we use to trade to maximize efficiency. In a pari-mutuel system, maximized efficiency has always and will always come at the cost of the inefficient.

But a few years ago something changed, and to me it is at the center of the argument. The exchanges themselves (NYSE, Nasdaq, etc.) started providing information faster to those who paid for it, and also gave them the ability through their own algorithms to jump in front of other participants. By "faster" I mean that we're measuring in tiny fractions of seconds, but it's enough.

Those who insist that HFT is no big deal and actually adds efficiency and liquidity to the market have a hard time describing why this is cool. The fastest traders could simply make money by being the fastest, by having preferential access at the exchanges themselves. They don't care what they're trading -- Apple stock, frozen concentrated orange juice futures, whatever. They take advantage of their latency advantage to jump in front of other market participants -- and that latency is provided by the exchanges themselves.

That's what's different about HFT. The exchanges have sold certain participants privileged access and in turn pay those same participants to create volume, creating a situation in which HFT firms can pretty much make a guaranteed profit on every trade. A super-tiny profit, yes, which is why the HFT firms must make millions of trades a day. That's why they're called "high-frequency traders." HFT firms are investing hundreds of millions of dollars, and paying the exchanges enormous sums to get in front of the line, and we are to believe that this is a benign market function?

Basic business sense should tell you what's up here. The HFT guys are not stupid. The algorithms they create are mind-bendingly complex. And if they are going to invest such huge sums for preferential speed and access, they will demand (as they should) a satisfactory return on their investments.

I don't even blame the HFT guys here. The real villains, in my mind, are the exchanges themselves. I've argued a few times in these pages (most recently in Question Authority, Jan. 17, 2014) that one of the most dangerous things that's happened over the past 20 years in investing is that the exchanges themselves converted from private partnerships to publicly traded entities.

In my mind, having a quarterly number to hit to satisfy stockholders has given exchanges an almost irresistible incentive to compete with one another to maximize profits. And on occasions where you're just lowering your standards a little bit (See "reverse merger," "Chinese," "small caps," almost all of them as an example), then shareholder protection and fairness become that much more expendable. Self-interest does a strange thing to people. It corrupts.

So this leads to two questions:

• "Is the market rigged?"
• "Does this hurt me?"

As to the first, my answer is an unequivocal "yes," followed by "and this isn't new." HFT, as practiced by the exchanges' selling of asymmetric access to certain market participants, simply isn't fair. The HFT algorithms essentially attempt to influence the price of the market through tactics like "quote stuffing," which is about like it sounds. What we don't know is how far these market participants are willing to go to distort the market to their advantage.

The second question is much more important. Systemically, things that cause market participants to lose faith in that market are probably bad. But there are lots of things that manipulate stock markets. Federal Reserve policy is all about influencing investor behavior. So is capital-gains tax policy. It's possible that you've had a few pennies harvested from you during a trade.

There is an obvious solution to combat this: trade less. Be a long-term holder of businesses. Focusing on HFT as a reason to be in or out of the market is absurd. The stock market isn't Vegas or some crooked numbers game. It's a tool that allows ordinary folks like us to buy pieces of businesses, which, if you're doing it right, tend to appreciate in value. Some lose, yes, but ultimately your investment returns are overwhelmingly going to be driven by what investments you hold.

It's the Joshua Principle: "A strange game. The only winning move is not to play." Worrying about HFT as an individual investor is like worrying about sunspots. Yes, they might be bad for you, but not nearly as unhealthy as your three-chalupa lunch was. Frankly, out-of-control management compensation is a far, far bigger drag on your long-term investment returns than HFT could ever dream of being. Worry about that.

Returns in investing come from buying something for $1 and selling it for a lot more. If HFT causes you to buy it for $1.00000001 instead, is that really, truly harmful when you sell it for $2.63 years from now? Trading has both overt and hidden expenses to it, and those expenses can add up over time.

Speaking of "over time," in aggregate, stocks go up in value, over time. If you're buying and selling stocks in a hurry (or holding mutual funds that frequently turn over their asset base), you're leaving yourself more susceptible to the machinations (and manipulations) of the stock market. If you aren't, you aren't. Simple.

And read Michael Lewis' book. Whether it has wrongness built into it (and it does), it will give you an idea why our stock exchanges are threatening to surpass both Congress and the NCAA on the cravenness scale. They're the villains in this story, because they're supposed to promote fairness.

Despite facing intense competition and a tough economic environment, US restaurant chains Burger King Worldwide , Wendy's , and Chipotle Mexican Grill remained some of the most valuable buys in the restaurant industry during the last 12 months.

In this article, I will analyze why investors are betting on Burger King and examine what's in store for the restaurant chain in the future.

What drove Burger King's profits?
On April 25, Burger King announced its first-quarter earnings. The company posted earnings of $0.17 a share, up 69% from $0.10 a share a year earlier. However, revenue slipped 26% to $240.9 million. Excluding the impact of currency fluctuations and refranchising, total revenue grew by 6.9%. Same-store sales were up by 2%, including an increase of 0.1% in Canada and the U.S.

One of the major reasons for this remarkable earnings growth was a sharp decline in the company's expenses. The restaurant's expenses dropped by a staggering 86% to $15.5 million during the quarter. Last year, Burger King refranchised a net of 360 restaurants, which is why it's continuously incurring lower expenses.

More recently, Burger King's new food items such as Satisfries and the "Burger King" burger have done really well. With Satisfries doing a great job, the fast-food chain has replaced the standard fries with Satisfries in its popular Kid's Meal. Satisfries have 40% less fat and 30% fewer calories than standard fries.

In the last year, Burger King opened 670 net new restaurants around the world. In North America, the company continued reimaging and remodeling its existing restaurants. Burger King remodeled around 600 stores last year, or 30% of its 7,400 locations in the U.S. and Canada. By year-end 2015, the fast-food chain has a goal of remodeling 40% of its restaurants in the region.

In such a competitive market where consumers have so many restaurants to choose from, brand image plays a vital role. Alex Macedo, president of Burger King's North American business, said:

We recognize that when our guests drive down the street today, they have many dining options. In a competitive market, having a fresh new image is one of the main ways we can differentiate ourselves.

Recent developments
While Burger King is enjoying success from its international operations, it continues to expand its restaurant portfolio worldwide. It recently opened its first restaurant in the Kingdom of Brunei where it chose Sinofood Express as its franchisee. Apart from this, Burger King and ADM Food Services have collaborated to establish three Burger King restaurants in Martinique. The restaurants will be opened in Le Lamentin, Fort-de-France, and Guadeloupe.

Recently, Burger King partnered with AT&T to launch AT&T Wi-Fi services for its U.S. restaurants. The new platform, "WHOPPER Wi-Fi," which is easier to use and has enhanced connectivity, will replace the company's old Wi-Fi system. Numerous customers use the Internet while dinning at Burger King restaurants, and the new service will help in improving the overall customer experience at the fast-food chain.

Wendy's and Chipotle Mexican Grill
In March, Wendy's completed its system optimization initiative by selling 104 restaurants in four U.S. markets -- Phoenix, Los Angeles/Palm Springs, Hawaii, and Albuquerque, N.M. The system optimization initiative, which started last July, targets a transition into a franchise-based model. Its goal is to reduce the total system ownership from 22% to 15%. Under the initiative, Wendy's sold 418 company-operated restaurants in the U.S. The program also involves expansion plans, shutting underperforming stores, and reimaging its restaurants. Wendy's year-over-year capital appreciation stands at 46%.

After missing Wall Street's expectations in the first quarter, Chipotle's share price fell by more than 6% in after-hours trading. However, the company's earnings grew 8.5% from the comparable quarter of last year, as it reported earnings per share of $2.64. The company plans to open 180-195 new restaurants this year. It has also said that it will raise its prices by 3% to 5% in the coming weeks. Chipotle has given a year-over-year return of 38% to its investors.

Bottom line
Burger King's strategy of refranchising continues to pay off for the company. By reducing its expenses substantially, the fast-food chain is posting heavy profits. The company's new items, especially Satisfries, have also contributed to these profits, as they have enjoyed success of late. After doing pretty well in international markets, the company is expanding its brand, which will give a further impetus to its earnings in the coming years.

As the restaurant industry is inundated with many food companies, Burger King's decision to reimage its North American restaurants will prove to be a wise one. Given the fact that many customers these days use their smartphones and tablets to log on to the Internet, an improved Wi-Fi service will give Burger King a further edge over its competitors.

Burger King will continue to post incremental earnings in the coming days, largely due to its refranchising strategy. In short, buy Burger King.

This morning, it looked as though Monday would be a horrible day for the stock market, as worries about the health of China's economic growth and ongoing turmoil in Ukraine combined to send stocks falling at the open. Slowly but surely, though, stocks clawed their way back to small gains, and King Digital Entertainment , Intermune , and Pharmacyclics had some impressive moves higher in their share prices today.

Source: King Digital Entertainment.

King Digital Entertainment gained 8.5% after the maker of Candy Crush Saga got favorable ratings from several analyst firms. The firms pointed to the King Digital's potential to continue monetizing Candy Crush Saga and the company's other game offerings well into the future, with King Digital well-poised to keep profiting as mobile devices get more common not just in the U.S. but worldwide. The analysts' arguments attempt to counter the market's perception that King Digital is too dependent on its primary game, raising fears that it will flare out like other mobile-gaming companies before it. It's important to remember, though, that among the analysts making positive assessments on the stock were the lead underwriters on King Digital's IPO, and while the recommendations are supposed to be independent of the underwriting relationship, you'll want to draw your own conclusions about how much weight you give them.

Intermune rose 7%, adding to its 2% rise on Friday after the biopharmaceutical company impressed investors with its first-quarter earnings report. Intermune's losses were slightly larger than in the year-ago quarter, but sales of the company's idiopathic pulmonary fibrosis treatment Esbriet almost tripled from last year and rose 18% sequentially from the previous quarter. Although Esbriet is available in Europe, Intermune plans to resubmit an application for approval from the Food and Drug Administration in the U.S. after mid-year. If the FDA approves the drug, then Esbriet could launch as early as next spring. Although widening losses are always troubling, the fact that Intermune has demonstrated success with Esbriet is a positive sign for its future.

Pharmacyclics climbed 8%, regaining every bit of the ground it lost last Friday after its own earnings report failed to inspire the same confidence that Intermune's did. The maker of mantle-cell lymphoma treatment Imbruvica saw total sales soar as a result of the drug's approval and milestone payments associated with its success, turning a year-ago loss into a substantial profit. On Friday, investors seemed disappointed by Pharmacyclics' revenue guidance for the full year, which fell far short of what analysts were expecting. But given the demand for promising treatments, investors might well have decided Monday that Pharmacyclics has potential not just in its own right as an independent company but also as a possible takeover candidate.

Online retailer Overstock.com  and its big cousin Amazon.com  reported their earnings for the first quarter of fiscal 2014 the other week. It is clear from both online retailers' financial results that more and more consumers are choosing to shop online.

While Overstock.com reported modest growth for the first quarter with a 9% increase in net sales, Amazon.com reported much stronger growth of 18.3% over last year's first quarter despite its larger size. Although Overstock.com is experiencing impressive online sales growth which gives it an edge over traditional bricks-and-mortar retailers, it still has a long road ahead to catch up to Amazon.com.

The basic facts from the quarter
Overstock.com is off to a good start for fiscal 2014 with net sales climbing $29.2 million from the first quarter of 2012 to $341.2 million. This jump in revenue resulted partly from an increase in the average order amount from $153 to $165 as well as a 5% growth in the number of orders placed on the company's site.

Unfortunately, Overstock.com's profit fell to $4.0 million, or $0.16 per share, in the first quarter while in the year-ago quarter its net income totaled $7.7 million with earnings of $0.32 per share. A 25% increase in sales and marketing expenses for the quarter contributed to this decline in profit. For Overstock.com's sake, hopefully this increased spending will lead to higher sales volume in the future.

Just can't keep up with big brother
Overstock.com has done fairly well for itself over the past year. Despite the stiff competition from Amazon.com and the bigger company's reputation among consumers, Overstock.com has put up a good fight. However, its annual revenue is still no match for that of Amazon.com, as this online retail business continues to dominate against the rest, stealing sales left and right from all retailers. To see how Overstock.com and Amazon.com compare in terms of annual revenue over the past three years, see the chart below.

It would be one thing if Overstock.com was much smaller than Amazon.com but growing much faster. However, this is not the case. For the past three years, Amazon.com has experienced double-digit growth in revenue, and it brought in $74.4 billion in fiscal 2013 alone. In comparison, Overstock.com just saw its first year of double-digit sales growth in 2013 on much smaller revenue than that of Amazon.com.

In fact, Overstock.com earned $73 billion less in net sales than Amazon.com did in fiscal 2013. All in all, Amazon.com is growing much faster than Overstock.com, and it's taking the next step for its long-term success by trying out its luck with video streaming. This latest move by Amazon.com will carry its business even further up the ranks from that of Overstock.com.

Foolish takeaway
Foolish investors should take note of everything Amazon.com is doing to transform its company from solely operating as a retailer to operating in the world of entertainment as well. While Overstock.com is growing its sales year after year, it's not making the kind of sales made by Amazon.com. For this reason, Amazon.com remains the king of online retail. Investors would be wise to do more research on Amazon.com to see what else it is currently working on to keep its business high above the rest.

How is hybrid travel business Allegiant Travel faring in today's competitive landscape? In a word: great. The discount airline portion of the business can easily feel the pinch of increased expenses, but luckily it has a travel-booking segment to lend some relief to margins. The stock has booked a two-year gain of roughly 100 %, yet its run may still have legs. In its fiscal first quarter, the company reported healthy jumps in unit-level metrics and, even as the No. 2 low-cost carrier in the U.S., maintains one of the chunkiest operating profit margins in the business. The stock isn't the cheapest in the game, but investors still have plenty of reasons to get on board Allegiant.

Flying high
With the wind at its back, Allegiant is finding success on all levels of its business. The company has been firmly in the black for 45 consecutive quarters. In the first quarter, revenue climbed more than 10% to $302.5 million on the back of an all-time high in average fare and a 1.6% gain in PRASM, which is passenger revenue per available seat mile. Ancillary revenue, which includes the travel booking website, grew 4.1%.

Margins remain a strong point for the company, even though Allegiant saw continued cost bumps from maintenance and training during the first quarter. As reported last quarter, Allegiant's fleet is relatively old, and many of its MD-80s will be in service throughout this year. The company is also, wisely, upgrading other parts of its fleet to generate higher PRASM. In the first quarter, Allegiant brought into service two Airbus A320s, in addition to two more MD-80s reconfigured with 166 seats.

An 8.8% drop in fuel expense per available seat mile helped to keep the company's operating margin around 19% for the quarter.

Everything about the business is growing: 12 new routes were added this past quarter, while car rentals from the website grew by double-digit gains. The company has nearly 13% more full-time employees than it did one year ago. Growth often comes at the expense of margins, and Allegiant is certainly paying its dues to scale up its business, yet the margins remain intact and healthy. The bottom line came in at $1.86 per share -- almost a 13% gain over the prior year's $1.65 per share.

Will it stay up?
Allegiant is in the midst of substantial growth, but the company doesn't quite fit the profile of an asset-laden grower. For one thing, its balance sheet looks phenomenal with more than $300 million in cash and just $149 million in debt. This isn't a legacy carrier by any stretch of the imagination. Second-quarter PRASM is expected to rise 2%-4%, while full-year 2014 capacity could grow as much as 13%. How does this translate to sales and earnings growth? Analysts expect an average of $5.86 per share for this year (a 21.5% jump over 2013's earnings), and an additional 18% gain for the fiscal full year 2016 to $6.92 per share. Whether the company hits or exceeds these estimates can largely depend on factors beyond the company's control -- weather, fuel costs, etc. Investors are best off monitoring the unit level growth measures, as mentioned above. 

The travel and services booking business complements the airline nicely, as deal-seeking customers are eager to bundle and save money. Allegiant understands its customer -- a small-town, value-focused individual looking to get where he or she is going as efficiently as possible. While the leader of ultra-low-cost airlines, Spirit, is also the worst-reviewed airline in the industry, Allegiant has maintained its reputation beyond low prices. Allegiant has a three-star rating, according to airline ratings website Skytrax while Spirit comes in at two stars.

At roughly 16 times earnings, this certainly isn't the cheapest pick in the airline bunch. Delta, which has also found success recently, trades at just 10.7 times earnings. Investors should note, though, that these really are different businesses. Investors are paying up for Allegiant's projected growth, and with the way it looks now, that premium may be worth it.

Out of the gate, Monday was an ugly day for the stock market, which suffered big losses early in the session. But even though violence in Ukraine showed few signs of letting up and even though investors worried about new data pointing to potential weakness in the Chinese economy, favorable news on the domestic economic front helped pull stocks back from the brink to post modest gains on the day. Still, shareholders in Plug Power , BroadSoft , and Universal Display couldn't escape losses Monday.

Source: Plug Power.

Plug Power dropped almost 10%, adding to its losses over the past couple of weeks. After a secondary offering of 22.6 million shares two weeks ago, Plug Power stock has lost more than a quarter of its value, as investors not only question the fuel-cell company's future prospects but also actively sell the stock short. Short-sellers can note that Plug Power has gone through similar patterns in the past, with bouts of optimism causing temporary surges in share price that have eventually given way to disappointment. However, with roughly 30% of the company's outstanding shares sold short, Plug Power could make bullish investors happy if future positive news from the company creates a short squeeze, as the high short interest could send share prices much higher.

BroadSoft sank 19% after the company's latest quarterly report included both disappointing results for the first quarter and troubling guidance for the current quarter. BroadSoft makes software and provides ancillary services that help enable communications across its customers' platforms, and with the rise in enterprise demand for data analytics and cloud-related applications, BroadSoft's industry has plenty of potential. Yet adjusted earnings and revenue fell short of what investors were looking for, despite an 11% gain in revenue compared to the year-ago quarter. Moreover, although revenue guidance for the second quarter looked solid, BroadSoft sees earnings per share coming in well short of what investors wanted to see. Without working harder to take advantage of opportunities in the space, BroadSoft won't be able to convince investors of its long-term promise.

LG Display curved OLED television. Source: LG Display.

Universal Display's losses amounted to nearly 10%, with the maker of organic light-emitting diodes seeing its share drop in response to reports that television manufacturer Samsung might not go forward with initial plans to expand its production of televisions making wider use of OLED technology. Universal Display has looked forward to greater demand for OLED products from television manufacturers like Samsung and LG Display for a long time, so if the reports on Samsung are true, then it could mark a big step backward for Universal Display. Already, investors had shown signs of impatience with the company's progress, and without a high-profile success story when Universal Display reports its first-quarter earnings later this week, the stock could see even further declines.

Proofpoint shares soared after the cloud data protection software provider reported better-than-expected earnings. However, it's worth noting that shares of security stocks have been badly beaten, and had continued to trend lower prior to Proofpoint's report. So, should you buy Proofpoint or peers Palo Alto Networks and FireEye ?

What did Proofpoint say?
Proofpoint saw gains of nearly 14% following its first-quarter report. The company saw revenue of $42.7 million, beating expectations with growth of 38.8% year-over-year. Moreover, its loss per share of $0.12 was also better than the consensus.

Lastly, the company's guidance was solid, expecting full-year revenue of $179 million and a loss of $0.43 per share, both of which were slightly better than expectations. Essentially, the company beat on all metrics, although the beats were marginal compared to expectations.

High expectations and great volatility
As it appears, Proofpoint's earnings eased some fears that security providers are facing increased competition from larger companies that are building their own security networks. Specifically, Proofpoint's Targeted Attack Protection program, which protects customers against malicious links and emails, saw year-over-year growth of more than 100%. It is this performance that has investors of other cybersecurity stocks excited.

Nonetheless, all security-related companies sell different types of software, including FireEye and Palo Alto. For example, FireEye sells appliances to prevent advanced persistent threats, or APTs, alerting customers, but not actually preventing or eliminating the threat. Palo Alto, on the other hand, operates in the advanced firewall space, combining other services such as intrusion prevention.

With that said, investors know that companies of all sizes have bulked up their security, and as a result, shares of security-related stocks have soared in years past. In the five months prior to March, Palo Alto soared more than 65%, Proofpoint increased 225% in the year prior to March, and FireEye, with its IPO late last year, appreciated by 150% in the initial five months following its debut.

As a whole, this is an industry that has had enormous expectations built in to valuations, and even with large losses since March, these stocks are still expensive. So, are Proofpoint, FireEye, or Palo Alto good buys?

Is there a buying opportunity?
According to Proofpoint's guidance, the stock trades at 6 times guided full-year revenue, with operating margins of negative 20%. FireEye is growing a lot faster, with 152% expected revenue growth this year, in part thanks to an acquisition, and 46% growth is expected in 2015. However, FireEye trades at 9.5 times 2015's expected sales, and has a negative 100% operating margin, meaning $2 is spent for every $1 in earned operating income. Therefore, FireEye is still a big risk.

However, Palo Alto might be a different story. It trades at 10 times trailing 12 month sales, but the company is expected to grow 45% and 34%, respectively, over the next two years. Moreover, the company should be profitable in the process.

In 2012, Palo Alto had seen four consecutive years of operating margin improvements, including profits in 2012, but then took a step back in 2013. However, Palo Alto is expected to earn $0.38 and $0.60 per share during the next two years, respectively, to complement its impressive growth rate. Lastly, the company's upside looks solid beyond 2015, as Palo Alto estimates that its total addressable market will rise from $15.8 billion to $19.5 billion over the next three years, and will continue to grow.

Final thoughts
If you want to invest in the cybersecurity space, you're going to pay for it. But, in the process, it's important to remember that you're not comparing apples to apples, as these companies all offer different services and are priced differently in the market.

With that said, there are dozens of cybersecurity-related companies, and while different, investors can still compare valuations and growth rates to find a good opportunity. In this particular case, Palo Alto operates in a large market, it's attractively priced, profitable, and has a good risk-to-reward ratio, meaning it appears to be the best.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Interactive Intelligence Group Inc. fell 19% Tuesday after the customer experience software provider turned in a surprising first-quarter loss.

So what: Quarterly revenue rose 8% year over year to $79.4 million, which resulted in an adjusted net loss of $0.4 million, or $0.02 per diluted share. By comparison, analysts were expecting net income of $0.01 per share on sales of $79.67 million.

Now what: Interactive Intelligence Group CEO Dr. Donald Brown explained: "As we increasingly shift to a higher proportion of cloud-based orders and have more revenue deferred to future quarters, our reported short-term profitability is affected. But we look beyond this and remain committed to making investments that drive the growth of our business, particularly with our cloud-based offerings targeting the highest growth segment of our market."

To be sure, Interactive Intelligence doesn't recognize cloud-based revenue upfront, which affects its profits over the short term as the company shifts to a more predictable recurring revenue model. Considering cloud-based orders jumped 165% year over year and accounted for 59% of total orders -- compared with 31% in the same year-ago period -- that should bode well for Interactive Intelligence shareholders down the road.

Still, the stock doesn't exactly look cheap, trading around 114 times next year's estimated earnings. But if you already liked Interactive Intelligence Group before today, I don't think its surprise loss should change your opinion of the stock.