Google: Many Ways to Beat Apple
Helen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Google (NASDAQ: GOOG) is a technological titan that has pretty much dominated the contemporary cyberspace. After trampling on former all time competitor Yahoo!, It has set its eyes on higher altitudes and currently rests on a $206 billion market cap. Competitors in the field like AOL extend no formidable threat with its dwindling $0.12 earnings per share- a mere fraction of Google's $29.7. Even the formidable Microsoft - seemingly invincible in other fields of business - has failed to out-fox Google in its chosen niche. As a careful investor, I am compelled to overlook the numbers and delve deeper to see if Google's future is as promising as its current market cap and quarterly revenue growth suggest.
Larry Page, the chief executive officer of Google, jump started his career with a dauntless move- a move that will forever change the face of Google. Towards the end of fiscal year 2010, Google's imminent plans to acquire Motorola Mobility (NYSE: MMI)were put to light. In person, I have an unwavering conviction that the $12.5 billion acquisition will have a notable effect on Google's stock. I foresee an inevitable growth in Google's portfolio.
This growth will open up multiple doorways and possibilities. On one hand, the share value may increase leading to an upsurge in demand. On the flip side, the acquisition may kill any plans for diversification that are scheduled for the near future. All the same, I am more inclined towards the former. If the enhanced share value triggers an increase in demand, a shoot in price is an imminent likelihood.
This will spell good business for bullish investors. Recent updates suggest that the two technological big wigs are placing their final touches on the much awaited acquisition. Larry Page, the 38 year old CEO, rallied a very optimistic spirit on the matter. I believe that the predominantly optimistic spirit in Page's demeanor with regards to the Motorola acquisition is a reflection of the spirit that trickles throughout the whole Google team.
Page stated that Google intends to keep the Android operating system open. He also went on to add that Google purports to launch incredible devices once it seals the deal with Motorola Mobility.
Rumor mills have been buzzing on about Facebook's possible entry into NASDAQ. It is now official, as the deal is cemented. Facebook will list its shares on NASDAQ. The effects of this news have been felt all through the stock market. Big wigs like Google however, find themselves in a tricky position. Facebook is growing at an incredibly fast pace and analysts say that it could pose a great threat to technological behemoths in the already flooded NASDAQ stock market.
In my line of thought, Apple (NASDAQ: AAPL) is the only competitor that gives Google a run for its money. Apart from extending a rival operating system for smart phones, Apple also has strong anchorage in hardware and mobile devices. I believe that this is reason enough for Google to double its efforts. If I were to tread within the realms of reality it would be in order to say that Facebook's impending entry may take some of the heat off of Apple. All said there is an exception to every rule.
I am confident that Google already has a strategy to deal with Facebook. This is reflected in the fashion through which Google is swelling its portfolio to emerging markets in Asia and Africa. I conceive that these two markets have infinite potential. If Google plays its cards well, which it usually does, Facebook's entry will be a blessing under the guise of a genius grim reaper. Unlike Yahoo!, which filed a lawsuit against Facebook, Google has chosen to maintain a calm and relaxed standpoint. This suggests that Google is surefooted in its stock. A move that will greatly fortify confidence levels in current and prospective shareholders.
Motorola Acquisition: A bridge too far for Google?
Going back to the Motorola acquisition, it is quite clear that it is not the first high profile acquisition in Google's books. I can compare this acquisition to the Adsense acquisition back in 2003. It will act as a great boost to Google. This is chiefly because it will create a platform for Google to stage its much awaited onset into the hardware front. This will give it the much needed edge in combating shrewd competitors like Apple.
Google's CEO has expressed his confidence in Motorola's proven track record and tremendous innovations. Critics, however, exhibit contrasting opinions and don't give positive comments the time of day. They say that Motorola was on the hedges of failure and that Google has taken an unnecessary and seemingly uphill task. In as much as their inclination bears some shred of logical sense, it is completely void of practicality. Google's management boasts of an exceedingly high degree of prowess and tact. In addition to that, Google has the software to support Motorola's hardware. This acquisition will reap a lot of benefits for Google shareholders and I believe that demand for its stock will swell.
When it comes to litigation, Google is an elusive player. It tactfully handles its legal issues and constantly maintains a positive face, one that greatly maintains the stability of share prices. The prevalent Gaos vs. Google case has failed to spark substantial shifts in the stock market. Gaos states that Google allows web owners and other third parties to have a transparent view of the search terms inputted by users.
As a round up, I strongly believe that Google has a promising future. It knows how to maintain its balance in the current dynamic technological environment and oozes an incredible degree of ambition.
QueenBC has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. 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.