iDisrupted author claims that, Google’s not really bothered about its performance in the stock market, in fact, the worse it performs the better.
London, UK (13 April, 2015) - iDisrupted - In this article, author of iDisrupted John Straw explains why Google isn’t bothered by its stock performance.
In 2014 there was much talk around the Google advertising monopoly in Europe and, to a lesser extent, the USA. Calls for Google to be ‘broken up’ were frequent and loud in the European Parliament. John Straw, author of iDisrupted claims that ‘underperforming’ Google stock allows Google to deflect its strategic critics by simply stating that market reflects its performance not government.
John states; “Google has made a number of moves recently which made it look as if it had lost the sharpness it is reputed for. As an example; Google ‘failed’ to secure deals with Apple and Mozilla Firefox to be the default search engines for those browsers. If it had retained those deals it would have around 75% of the search market for desktops - easily enough to reawaken the ‘monopoly’ calls from the US and European markets. So it would seem that losing those deals is good PR for Google.”
In the background lies a different story.
Google has north of $55 billion in cash. It’s spending vast amounts of money in new data centres (for the long term plan to store all of the world's knowledge). In 2014 Google Ventures, its VC arm, had 16 exits and made a record number of investments.
Indeed its $3b acquisition of Nest looks cheap when taken in the light of Nest’s opportunity to own the home automation market.
Its $1 billion investment into Elon Musks SpaceX project looks like a cheap way to provide global wireless internet access free of charge for the planet (making Google more money through more advertising) and makes the BT/EE merger look a little out of date.
John continues; “You can then look at the longer term efforts to grow the whole advertising market. Investing heavily in life sciences (36% of its investments from Google Ventures) Google would like to help us extend our lifetimes. So they can expose us to more advertising. Then there is Google Driverless cars. If we all spent the average 60 minutes in car hunched over a tablet and being exposed to Google ads, it grows the market.”
The author of iDisrupted is aware however that it’s not all perfect surfing for Google through. Facebook is proving a tough and ultrasmart competitor and is virtually guaranteed to bring out a deep learning powered search engine in the next two years (based around the life experiences of 700m users).
When you piece it all together, something that it would appear Google’s PR machine would rather we didn’t do, the future looks very rosy indeed for your favourite massive data company.
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