While the Tech community continues to debate whether or not Google Inc (NASDAQ:GOOG) will remain the lead dog in the search engine race, interest by the company’s investors has also been reignited as shares have hit all-time highs over the past few months. And although there is little argument that Google has posted some impressive financials, the real question is this: Can the company sustain its position in light of its competitors’ up-and-coming new offerings?
Numbers don’t paint the whole picture
This area alone paints a picture of the massive profit potential that stands before Google with Android, which has essentially helped the company’s shares to trade at approximately 20 times its earnings estimates for this year – paling Apple Inc. (NASDAQ:AAPL)‘s much-slimmer, less than 10 times estimates.
Another area where Google has continued to shine – and making its investors even happier – is in online search and display ads. One big factor that has helped to catapult the firm’s success here is the more lax regulatory concerns of late.
In addition, mobile search marketing has also helped Google Inc (NASDAQ:GOOG) to gain share, as mobile advertising has continued to increase in popularity. Likewise, the area of paid clicks has helped in driving Google’s market share too. This area alone increased by 24% over 2012 – adding to the mix of an extremely healthy overall advertising ecosystem.
Google’s increased market share in alternate areas
Although most people think of Google as a purely online entity, the company has ventured into the tangible product arena now too – also with admirable success. For example, Google’s Android OS smartphone sales represented over 30% of overall U.S. smartphone sales in 2012 – with no real sign of slowing down.
Not to be outshined in the tablet market, Google Inc (NASDAQ:GOOG) has also posted solid sales growth here as well; primarily with its two top products, the Chromebook and the Nexus 4/7/10. Last year, the company’s combined revenue from hardware and its related Google Play App store came in at just a tad less than $2.5 billion. A big part of the hardware sales success also came from Google’s acquisition of Motorola Mobility – although the Motorola Home division was eventually spun off.
Technically, the competitors aren’t so far behind
It would be difficult at best to discuss Google Inc (NASDAQ:GOOG)’s market without mention of close competitors like Yahoo! Inc. (NASDAQ:YHOO) and Microsoft Corporation (NASDAQ:MSFT); although at present, Yahoo seems to be rewarding its shareholders more by eliminating non-profitable product lines and excess expenses. Just a few of the areas that have been tossed by the wayside at Yahoo include Yahoo Message Boards and Yahoo Clues, as well as its App Search and even the Yahoo Blackberry App.
There may be some additional changes in store for Yahoo! Inc. (NASDAQ:YHOO) as well, with a new leader at the helm. Since Marissa Mayer took over, she has vowed to position the firm for long-term growth that will benefit both the company itself as well as its faithful shareholders.
On the other hand Microsoft Corporation (NASDAQ:MSFT), the once not-to-be-reckoned-with giant, has actually had a few setbacks over the past few months. At the moment, Microsoft is playing it somewhat safe by holding in excess of 25% of cash per share on hand.
This stash of cash could be being earmarked for payment of a potential upcoming fine levied by European Union regulators due to alleged violations with regard to providing users with a choice of web browsers.
Microsoft’s shares had been close to a 52-week low during the first quarter of this year – although with a per share dividend payment of 92 cents, the company is providing its shareholders with a somewhat healthy dividend yield that is in the neighborhood of 3.3%.
The bottom line
Given Google’s intense forward momentum – due in large part to its growing market share in a variety of areas and a strong balance sheet – it would seem that Google Inc (NASDAQ:GOOG) is very well prepared to take on just about anything. And, while nothing lasts forever, the shares of Google can certainly represent a potentially high-growth opportunity for both the short- and the long-term time frames for its investors.
The article Is Google Being Inched Out as Top Dog? originally appeared on Fool.com and is written by Nauman Aly.
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