Okay, so we already know that it’s likely to be a better investment than Microsoft Corporation (NASDAQ:MSFT) over the next few years, but Apple Inc. (NASDAQ:AAPL) might be a different story.
A social butterfly
Google Inc (NASDAQ:GOOG) wasn’t always into the social scene. Though it tried to make an impact, it just wasn’t working out. However, Google Inc (NASDAQ:GOOG) eventually found a way to compete and users have responded. The numbers below, provided by janrain.com, indicate social login preferences for the second quarter.
Facebook Inc (NASDAQ:FB): 46% (bouncing back after two quarters of declines)
Google: 34% (increasing in popularity)
Yahoo! Inc. (NASDAQ:YHOO): 7%
Twitter: 6%
According to searchmetrics.com, Google Inc (NASDAQ:GOOG) might exceed Facebook in social-sharing activity by 2016. If Google continues to improve in social, then brand recognition will increase and more doors will open.
Searching for gold
Google has dominated the search market for many years, and this trend isn’t going to change anytime soon. The numbers below, provided by comscore.com, indicate search market share for June, 2013.
Google: 66.7%
Bing: 17.9%
Yahoo!: 11.4%
Ask: 2.7%
AOL: 1.3%
According to Alexa.com, Google Inc (NASDAQ:GOOG) ranks No. 2 in the world and No. 1 in the United States for Internet traffic. As long as those numbers remain in place, Google’s potential should remain high.
Operating well overseas
Most investors might not realize that 55% of Google’s revenue comes from overseas. Therefore, it’s important for Google to at least maintain its market share for its Android operating system.
Over the past year ending in June, Google has substantially improved its Android market share. The information below, provided by StatCounter GlobalStats, indicates global operating market share for Google’s Android operating system and Apple Inc. (NASDAQ:AAPL)’s iOS.
Android: 37.93% (from 26.53% last year)
iOS: 25.09% (from 25.41% last year)
However, in the United States, it’s a different story.
iOS: 54.5%
Android: 39.36%
Google notes
Google saw Chrome and Android as massive risks at the time of their development and launch, but they turned out to be home runs. This is a clear indication of highly intelligent management and a more-than-effective workforce. Google’s timing has also been superb.
Looking forward, you should expect Google to be one of the most innovative companies in the world. This is an easy prediction based on past successes and the company’s $50 billion in cash. With this amount of cash on hand, even a product or innovative failure won’t significantly hurt the company.
Moto X isn’t likely to be one of those failures. Based on information from a leaked YouTube video (since removed), Moto X’s features will include hands-free command, sensors, voice-activated search, and smart push notifications. The voice-activated search is expected to be similar to Apple Inc. (NASDAQ:AAPL)’s Siri voice assistant.
While some of the other features are seen as gimmicky, according to the Wall Street Journal, its plan to spend $500 million on a marketing blitz, could lead to strong sales momentum. Moto X will also be the first smartphone made in the United States, which also has the potential to boost sales. Based on Google’s history, you wouldn’t want to bet against Moto X. Its expected release date is sometime next month.
Google is working on improving other technologies, including Google Fiber and Google Glass, and it’s even in the early stages of developing a self-driving car. One final “Google Note” is that Google Inc (NASDAQ:GOOG) Chromebook sales increased 300% over last year, which should come as no surprise considering its affordable price, heightened speed, built-in antivirus, and cloud backup.
Google vs. peers
Microsoft Corporation (NASDAQ:MSFT)’s revenue has consistently improved, but at a much slower pace than Google and Apple Inc. (NASDAQ:AAPL). Microsoft had been growing, but it failed to grow profits in 2012, and its profits are not even in the same ballpark as the other two.
Microsoft also just missed expectations on the top and bottom lines and suffered its worst stock decline since 2000 (11.40%). It announced it took a write-down for the Surface Tablet and Windows 8 hasn’t made a big splash. Microsoft’s reorganization will lead to increased costs, which might then lead to subpar stock performance. Over the long haul, costs should be reduced thanks to the reorganization, but we don’t know if it will lead to stock appreciation. The good news is that Microsoft has more than $70 billion in cash, and it won’t hesitate to reward shareholders via buybacks and dividends.
As far as Apple is concerned, it’s yet another cash-rich company ($39 billion) that is more than willing to return capital to shareholders. It currently yields 2.90% compared to Microsoft’s 2.60%, Google doesn’t pay a dividend. However, the difference between Apple Inc. (NASDAQ:AAPL) and Microsoft is like night and day.
Conclusion
When you think of Apple and Google Inc (NASDAQ:GOOG), think of The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP), or the New York Yankees and Boston Red Sox. They’re two top-tier names that have heated rivalries. And this trend isn’t likely to change, which makes both Apple and Google quality long-term investments. Perhaps it’s time you take a harder look and decide which you like best.
The article Is Google a Better Bargain Than Apple? originally appeared on Fool.com and is written by Dan Moskowitz.
Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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