Is Apple Losing Popularity?

Tyler 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) recently released its Zeitgeist report which shows the top trends and most searched queries of 2012. I was interested to see if this report would remind me of high school where the "most likely to succeed" are coincidentally the most popular kids as well. Yellow press thrives in America, so I would expect some of the most Googled stocks to be filled with drama.

It is no surprise that Google made the top ten list. With revenue increases every year since 2009, 2012 was no exception. Just one decade ago Google was clearly inferior to Yahoo!, but recently those roles have switched. Users have even coined the term "Google it," despite Yahoo having four more years of experience. Google has seen free cash flow (FCF) levels increase for the past three years - including an increase of 14% this year, matching the performance of the stock.  Investors should note that over the past three years, Google's FCF increased, while its capital expenditures have been adversely affected each year. 

Though its not shell shocking, Facebook (NASDAQ: FB) was the most Googled stock of 2012. Amazingly, Facebook has acquired virtually non stop coverage the whole year. It started with the announcement of going public, moved to how horribly the stock performed, and most recently to the disappointing announcement from Mark Zuckerberg. The stock was down nearly 22% for last year, although it has actually recovered nicely from the time of the 46% spiral shortly after the IPO. Capital expenditures more than doubled this past year. Yellow press may have helped Facebook with popularity, but its FCF yield is just .3%. If there is any good news out there, Instagram was the second most Googled mobile/tablet application. Instagram was bought by Facebook for $1 billion in April. 

Though social media outlets are showing dominance in popularity by acquiring the top three positions on the list of most Googled stocks, there were a couple surprises that didn't make the list. Amazon (NASDAQ: AMZN) was not in the top ten companies, though its application was number nine on the list - one above Facebook's. Though Amazon's app store has grown quickly, and boasts 'hundreds of millions of downloads,' it fails in comparison to the 20 billion downloads of Google Play. Many people would argue that Amazon has been the most disruptive force in the retail business. 

Amazon's stock soared in 2012, increasing nearly 49%. Amazon's revenue has steadily grown for several years and continues to do so. In 2008 Amazon struggled to clear $19 billion in revenues, yet boasted over $63 billion in 2012 - more than triple the revenues in just five years. Possibly Amazon's largest advantage is their low-cost operations. Because their business model is all online, they don't have to hire employees to manage physical stores. With approximately 190 million users, Amazon is able to market very cheap products. 

Another major surprise that did not make the top ten list was Apple (NASDAQ: AAPL). Apple has received so much media attention, one would think it would have been Googled more than it was. However, don't let this fool you. Apple had two of the top three, and three of the top ten Googled tech gadgets in 2012. The iPad 3 and the iPad Mini held the top two positions while the iPhone 5 held down the number nine spot.

Amazingly, Apple's revenues have increased more aggressively than Amazon. In the past five years, Apple's revenue have increased approximately 408%. Boasting over $163 billion in revenue last year, its up from just $40 billion five years ago. Though Apple's stock has plummeted recently, it has still increased nearly 19% in 2012. With 2006 being the only year in the past ten years that Apples FCF hasn't increased, capital expenditures have grown every year since 2003. That's an impressive performance. Apple's FCF yield is 8.7% as well. So, even without the company's name being as popular as Facebook, its products are Googled more than ever.

The Foolish conclusion...

To my surprise, some of the most googled gadgets, applications, and companies were not all negative. Yes, there are social media companies such as Facebook and Zynga, however, Apple, Amazon, and Google all seem to be growing with more of a durable competitive advantage. While Facebook might be the most popular company on Google, and Apple and Amazon weren't even in the top ten, always look at other factors. For bargain investors, Apple may be your best option; however, Amazon, Google, and Facebook might currently attract more interest from growth investors.  

 


tlwofford has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, Facebook, and Google. The Motley Fool owns shares of Amazon.com, Apple, Facebook, 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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