Google has been doing very well with YouTube, its mobile advertising and the introduction of the Pixel phone, which some forecast to sell 7 million units this year. Google's share price is expected to reach $1,000 this year by some forecasters but Thursday's earnings report will add some more light. Stay tuned!
Google's revenue rose 21% from last year to $21.5 billion, resulting in a net income of almost $6 billion, itself an increase of 28%. This reflects the company's success with mobile advertising as well as its gains with such projects as Nest, Verily, Fiber and Google's driverless cars. According to CEO Sundar Pichai, "The strength of the quarter is about mobile, (which has) changed the way people consume information. Our investment in mobile underlines everything we do…[from] search and YouTube to Android and advertising. Mobile is the engine that drives everything. (With our) deep investments in machine learning and [artificial intelligence], we're building the engine that drives our future."
Apple closed at $104.21, giving it a market value of just over $569 billion, compared to Google's $538+ billion. Google certainly has a lot of momentum after this past week and it will be interesting to see if it will overtake Apple in the coming weeks. Stay tuned!
November 20, 2015:
Alphabet's share price rose more than $18 on Friday to close at $756.60. This is an all-time high and gives a company a market valuation of $526.8 billion, second only to Apple.
As the chart shows, the company's share price has steadily increased (with a couple of dips) since its IPO back in 2004. The stock split once, so those who bought the shares in the company at the initial price of $85 have seen an 1800% return.
After changing its name to Alphabet, Google had a busy week in October. Some highlights included:
1) Net revenue for the 3rd quarter of 2015 were up 13% from last year to $18.7 billion. Net income was up 44% to $3.9 billion.
2) Mobile ad clicks were up 23% from the same quarter from last year. Mobile advertising has become an important source of revenue as people increasing rely on smart phones for their internet use.
3) Alphabet will buy back $5,099,019,513.59 in Google stock, which will lead to a surge in the stock`s value
4) Chief financial officer Ruth Porat was quoted as saying, `"With six products now having more than 1 billion users globally, we're excited about the opportunities ahead of Google, and across Alphabet,". Other highlights included a figure of one million Apps for Work customers being reached and schools activating an average of 30,000 Chromebooks every day.
4) To compete with companies such as Netflix and Spotify, Google announced YouTube Red which lets viewers watch videos ad-free for $9.99 per month. You can read more at their official blog.
October 2, 2015 marks the official day that Google becomes 'Alphabet', It will trade under that name on Monday as the company will wait until the markets close on Friday before making it all official.
Forming a parent company called 'Alphabet' allows Google to let its independent businesses have more freedom and move faster in today's fast-paced world of technology. Nest and Google X, for example, can follow their own separate trajectories while Android, YouTube and Google Search will remain as Alphabet's core business.
Monday will definitely be an interesting day as Alphabet makes its debut.
Google's statement about today's news can be find at its Investors Relations page.
Google had another memorable day on Monday, August 10 with the creation of Google Alphabet, which is basically a collection of companies with the largest one being Google itself. 'Alphabet' is even used as a basis for the company's URL, which is now abc.xyz.
Why did the co-founders of Google take this radical step? Larry Page writes about it in his blog at:
Google has branched from being simply a search engine company into one that has ventured into such technologies as self-driving cars and Google Glass. Calico was formed by Google to literally cure death while Android and YouTube have transformed the way that we use phones and watch videos.
What does this mean for Google? As Larry Page writes:
"We are excited about...
- Getting more ambitious things done.
- Taking the long-term view.
- Empowering great entrepreneurs and companies to flourish.
- Investing at the scale of the opportunities and resources we see.
- Improving the transparency and oversight of what we’re doing.
- Making Google even better through greater focus.
- And hopefully... as a result of all this, improving the lives of as many people as we can."
Google had a memorable day on Friday, July 17 as its stock surged more than $100 in early morning trading to cross the $700 barrier for the first time. The company's quarterly report exceeded Wall Street's expectations and allayed fears about declining revenue from Google's desktop search or threats to YouTube from Facebook.
Google's Chief Financial Officer Ruth Porat is well-known for keeping corporate expenses in check and industry experts have confidence that she will continue to keep a close eye on Google's balance sheet. There is a question about whether Google will one day pay dividends to its shareholders but that has been put aside for the time being as investors enjoy the huge increase in the value of their shares.
Brokerages such as JP Morgan predict that Google's share price could exceed $800 within 12 months, which would make Google worth more than $500 billion, joining Apple as the only two corporations with a market cap of more than half a trillion dollars.
YouTube is still YouTube (viewing hours increased 60% from last year), mobile ad revenue is catching up to desktop and Google's desktop search is still extremely strong. These factors along with items such as its self-driving cars will keep Google a vital and newsworthy corporation for a long time to come.
Google's initial share price was at $85 back in August of 2004. According to a CNN article at the time, "The company's timing isn't ideal... Tech stocks have tumbled this summer, despite their recent mini-rally, on concerns that profit growth may have peaked. Internet stocks have been hit especially hard due to questions about extremely high valuations."
The CNN article makes reference to other companies such as LookSmart, FindWhat.com and AskJeeves. Investing in those companies back in 2004 would definitely not have had the return enjoyed by those who took a chance on Google. Back then it was seen as a search engine, great for finding items on the internet, while now it's involved in many ventures such as Google Glass, Google Fiber, Google+, Hangout, Play and much more.
As the chart shows, Google's share price have enjoyed significant gains since its debut in 2004. The future does look to hold a lot of promise for those willing to hold onto their shares. Look for more news at this site in the upcoming weeks.
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