Google Inc (NASDAQ:GOOG) reported its first-quarter earnings recently, and overall, the business is good. Google continues to grow, and dominates the business of advertising on the web.
Online advertising is expected to continue growing. Online ad spending is expected to increase 14.6% in 2013 to $113.5 billion, meaning that Google Inc (NASDAQ:GOOG)’s core business remains very healthy. But, companies like Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) are increasingly vying for those ad dollars. Google does need to focus on diversifying its business outside of just people clicking on web-based ads, and here are five areas where the company could really expand over the next few years
Fiber services
Enterprise
Most people don’t realize that Google Inc (NASDAQ:GOOG)’s enterprise businesses are doing quite well. In fact, it’s well over a billion dollar business for the company and continues to grow, slowly taking business away from Microsoft Corporation (NASDAQ:MSFT). The division’s flagship product is Google Apps, a web-based productivity suite that includes business class Gmail, word processing, and spreadsheets. Millions of businesses pay $50 per user per year for the service. Other enterprise offerings include Google Drive, mapping products, and the Google Compute Engine.
Google Glass
The Glass Explorers program, a limited test of the wearable Google Glass project, just got underway with the shipment of units to early adopters. Glass offers a glimpse into the world of wearable computing, a technology that offers a lot of promise for Google Inc (NASDAQ:GOOG). Instead of relying on computers and smartphones for information, Glass will enable its users to always be connected. That’s good for all of Google’s business, as it means increased usage of their services, although it might take some time for people to get used to the concept of wearable devices.
Chrome
While Google’s Chrome browser is free, the company benefits from people using it. It is now the most popular browser, overtaking Microsoft’s Internet Explorer. Chrome allows Google Inc (NASDAQ:GOOG) to have much more influence over the web. And while Chrome OS laptops are not selling as well as Google would like, it’s still a competitive alternative to Windows PCs or Macs. Chrome is a complementary business; it allows Google to sell more of its products and services by providing another portal via the browser.
Mobile
Advertising on mobile devices has not been an easy business for Google with competition heating up. Amazon.com, Inc. (NASDAQ:AMZN), a company that knows what consumers like to buy more than its competitors, is ramping up its advertising business. It’s possible that Amazon’s retail growth may slow, but that’s because they have not fully figured out mobile yet. Neither has Google Inc (NASDAQ:GOOG), but they have made some smart acquisitions, mostly notably AdMob, to help them in mobile.
It appears that Google’s main competition is Amazon and Microsoft, two formidable competitors. Amazon appears to be a worthy investment, given that like Google, they are diversifying into mobile and enterprise quiet successfully.
Microsoft, on the other hand, should be concerned. Although the company is still doing well in enterprise offerings, they are in a worrisome spot in regards to mobile. Their main ad generator, Bing, seems to be doing as a solid alternative to Google Inc (NASDAQ:GOOG), but Microsoft’s best days as an investment are probably behind it.
Google CEO Larry Page said it best during the earnings call that “incremental improvement is guaranteed to make you obsolete over time, especially in tech”. Some of these efforts outside of Google’s main ad business will succeed. Some could end up failing over time. But, the most important part is that they keep innovating in new ways to continue to stay relevant.
The article Google’s 5 Successful Businesses Other Than Web Advertising originally appeared on Fool.com and is written by Daniel Cawrey.
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