Happy Birthday to the 5th Largest Company!!
indar kumar is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Google's (NASDAQ: GOOG) shares are at an all-time high making it the 5th most valuable company in the United States of America. Riding high on its Android sales and better Ad revenues Google’s market capitalization is around $245 billion just a fraction behind Wal-Mart ($251 billion) and Microsoft ($257 billion) according to experts. A humble 5% more increase would make it the third largest company in the U.S.
What did Google do right?
Google, possessor of the world's principal search engine, governs the internet search market with a 67 percent market share, while Android another of its premium produce controls the Smartphone arena, owning 68 percent of the worldwide market -- closely four times the 17 percent share Apple's iPhone held. Google is likely to become the leader in the U.S. for display advertising this year, including banner ads leaving behind the Menlo Park Giant – Facebook Inc. Part of the fresh increase can be accounted to the fact that Google Maps has been positively mentioned since iPhone 5 buyers revealed how bad Apple's alternative is on their new smart phones The surge has come after 1 and a half years’ time since the founder “Larry Page” returned to his CEO duties. Larry has endeavored to trim Google down, forgoing underperforming projects, reinforcing its core businesses and above all trying to reorient the entire company following a full social tactic
Google vs. Apple.
It’s the Apple (NASDAQ: AAPL) and Google mobile world. But some facts before investing should be considered. Apple isn't satisfied to craft money just from promoting devices that let you tweet and change your Facebook status on the go. It is also slanting for a cut of the potentially rewarding market for advertising tied to mobile applications. Apple recently bought mobile ad firm Quattro Wireless. Shares of Apple hit an all-time closing high of $648.19 recently and the stock has more than doubled in the past year.
Not to be outdone, Google on Tuesday made public its own smartphone - the Nexus. The search engine giant also announced the acquisition of AdMob, another mobile ad provider, in November for $750 million.
Hence it's clear that Google and Apple are gearing up for battle in both the mobile gadget and ad markets and from friendly rivalry are entering into more competitive rivalry eating up each other’s market space.
Who’s the Winner?
Investing in Google and Apple should not be thought of as an either/or scenario. They both are competitive enough and will continue to scalp off market from their rivals. Currently the momentum shouldn’t change as users of both the company derive high value from the products and are quite loyal. It will be a long time before Google makes much of an impact in the device market as it will be a long time before efforts from Apple will make an impact in search and advertising.
However, John Snyder, manager of the John Hancock Sovereign Investor fund, said he'd be buying Google over Apple. He noted that Google is a better value right now -- its stock trades at about 23 times 2010 earnings estimates compared to a P/E of 27 times fiscal 2010 earnings estimates for Apple. Though none of the stocks are a bargain but he feels over expecting might hit Apple.
Therefore, it is clear that both companies have a lot of cash and are high performers. But they are reasonably valued, not cheap. If a new investor is investing in these companies, he has to be careful about when he buys. There is no need to dash in and no need to sprint to get out.
Compare and Contrast
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indarkb has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.