Google Inc. (NASDAQ:GOOGL), Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASDAQ:NFLX) have been a disappointment for the better part of the year, recording drops that CNBC’s Jim Cramer attributes to competition. While the overall industry has registered double-digit growth, Google has only been able to salvage a 3% drop on a year to date. Amazon is down by 21% with Netflix coming in second with a 5% drop on a year to date.
Google Inc. (NASDAQ:GOOGL) was the darling of the tech space in the past where it enjoyed impressive success on any business it touched. Fast forward, the company is facing immense pressure in terms of competition in all its bases of operation. Expansion away from search remains a key play for Google Inc. (NASDAQ:GOOGL) according to Cramer going forward.
“Google needs to expand beyond search into a profitable enterprise but the company seems too diffused to do so. Wall Street wants results, results now. Results to show management cares about the bottom line and is trying to generate as much earnings with this little expenses as possible,” said Mr. Cramer
Complacency might be creeping in at Google according to Cramer seen by the recent conference call where management spent a lot of time talking about hiring instead of plans intended to generate more value. Cramer believes Google Inc. (NASDAQ:GOOGL) should pay more attention to its YouTube channel that has the potential to generate more value instead of spending more time on driverless cars, air balloons, and Google Glass
Google Inc. (NASDAQ:GOOGL)’s stock is facing stiff competition on the business side of things as more money management firms shun the stock for other companies that are paying attention to quarterly earnings. The fact that Wall Street evaluates stocks based on quarterly earnings has mostly affected Google, which maintains that its current plans are intended at generating value in the long run
Cramer believes the giant search engine needs to pay more attention to its quarterly earnings if it is to regain favor from Wall Street.
“Google had been the internet stock of choice for years, didn’t have much competition among money managers. […] Now though we have so many other stocks competing with Google as cheats on the internet game that it has to fight to get a word in edgewise into the money management conversation. Facebook Inc. (NASDAQ:FB) and Yahoo! Inc. (NASDAQ:YHOO) have become more fashionable as stocks; they are viewed as companies that play by the quarterly rules unlike Google,” said Mr. Cramer.
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