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Analysis before buying or selling Google shares

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The Google Company is nowadays known by individuals and professionals around the world. Google shares were introduced onto the stock market in 2004 and immediately scored a success with investors. It should be said that right from their launch the Google search engine achieved incredible success with the internet surfers thereby making a fortune for its two creators, Larry Page and Sergey Brin. At the time of its entrance onto the stock market, Google shares were sold on the technologies market, the Nasdaq, at the rate of 85 U.S. dollars. In only a few minutes this price rose to 100.01 U.S. dollars, enabling the company to rise to a value of 1.67 billion dollars in one single day. Since this time, Google company shares have not stopped attracting attention from numerous investors that speculate on the durability of the Internet sector and the development of new technologies and functions that this company offers. The Google Company share price has been quoted for a number of years on the NYSE (New York Stock Exchange) in the United States. Although this asset recently changed its name to become ‘Alphabet’, Google shares have an interesting history that is important before buying or selling to understand in order to comprehend the fundamental dynamics of this asset on the stock markets.

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Elements to consider before selling or buying Google shares

Analysis N°1

Firstly, it should be remembered that since 2015 the Google Company has been integrated into the Alphabet Group with other companies such as Life Science and Calico from various different activity sectors. Due to this new organisation Google can therefore continue to concentrate on its principal activities relating to the internet habits of its users.

Analysis N°2

Still on the subject of future opportunities, the Google group could also benefit from the current growth in the tablet and smartphone market for which demand is expected to continue to increase over the coming years.

Analysis N°3

We know for instance that the Google group is exposed to various risks relating to its search engine from certain applications. In fact, an increasing number of consumers use specific applications for their online search.

Analysis N°4

Another threat that needs to be taken into consideration relates this time to administrative procedures that could lead to problems for the Google brand reputation. It should be remembered that Google has been subject to accusations regarding abuse of power for several years now.

Analysis N°5

Finally, another threat to take into account before buying or selling and during for your fundamental analyses this time relates to the major competition that is present in this activity sector.

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General presentation of Google

Similar to Apple, Google appears to portray a true American success story to experts. This is all due to the creation of a tool that has become just about irreplaceable to us nowadays, the famous search engine, that the company managers have built their reputation upon.

We can underline the performance of the Google company with the fact that with despite starting with few means it has grown to become one of the major American companies.

The company Google Inc. was created in 1998 in Silicon Valley by its two founders; Larry Page and Sergey Brin who originally created this famous Internet search engine. Although competitors have since come to nibble at the market such as Yahoo or Bing, Google Inc. have successfully diversified their offer by proposing services such as Google Earth, unique in its sector. 

Since its creation it has grown to be valued at 210 billion dollars on the market and has no less than 20,000 employees. 

Since its beginning this company has not stopped increasing its revenue due to a highly efficient and particular style of management. Today it is one of the major Internet companies and possesses around 900,000 servers, the higher volume worldwide. Its famous search engine alone is responsible for nearly 6.4% of the worldwide internet traffic, a share that is constantly increasing.   

To summarise, if you are interested in computer technology, the Internet or the general New Technology sector then Google Inc. is definitely a company to follow over the coming years and it would be judicious to invest on a rise in its share price.

Analysis before buying or selling Google shares
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The major competitors of Google

Although Google is one of the giants of the web market and operates in various segments, it also faces other companies that are trying to take market share from it. Here is a detailed presentation of the main opponents of this group:

Microsoft

With its search engine Bing, Microsoft is a direct competitor of Google in this segment. It was launched in 2009 with the aim of competing with the number one Google. Currently, the Bing search engine is the second largest in the world in terms of search volumes.

Yahoo

This American web service company was founded in 1994 and is partly owned by Verizon Media. It is based in Sunnyvale, California. It used to be a simple web directory but now offers more free and paid services including a search engine, email boxes, instant messaging, web hosting and news portals.

Netflix

This US multinational company was founded in 1997 and competes with Google's video-on-demand service, YouTube. It is a company specialising in the distribution and exhibition of film and television works via a dedicated platform. This video-on-demand service was launched in 2007 and since then the company has been distributing numerous films and TV series, original creations and other videos.

Oracle

The Oracle Corporation is an American company that was founded in 1977 and offers, among other things, the Oracle Database database management system, the Oracle Weblogic Server application server, the Oracle E-Business Suite enterprise resource planning system and a cloud computing offering called Oracle Cloud Infrastructure. Several of these products and services are therefore in direct competition with those of Google. The Oracle Group is currently the second largest software company in terms of revenue and market capitalisation.

Cisco Systems

The American IT company Cisco Systems is a company that used to specialise in network hardware with routers and ethernet switches and has since specialised in servers. The company was founded in 1984 by a couple of computer scientists and has been very successful ever since. Cisco became the most expensive company in the world before the dot-com bubble burst in 2000. Today, it is the world's leading designer, developer and seller of network equipment for the Internet, which is the largest part of its business. Cisco Systems is therefore a company that can compete with Google.


The major partners of Google

Concerning partners of Google, it appears that the Google Company has not formed any type of official alliances with other companies apart from the Sanofi Company. In fact, Google and Sanofi collaborated in the 2016 launch of a combined business specialised in the fight against diabetes. The objective of this company is to develop connected devices that particularly enable control of the blood glucose level and the administration of insulin for diabetics undergoing treatment.

This company was actually created between Sanofi and the mother company of Google, Alphabet, through its health based subsidiary Verily. It should be remembered that Google actually became Alphabet a few years ago.

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Positive factors for Google shares
The factors in favour of a rise in the Google share price:

Before taking any long term position on the Google share price on the stock markets, particularly when using CFDs with online brokers, you should of course take the time to check the possibility of a rise or fall in this asset over the long term. This is why we offer you the opportunity to learn more here about the strengths and weaknesses of this company that could exert an influence on the financial results of this group over the medium and long term that could indirectly affect the movement of this company’s share price. Firstly then we shall examine the principal strengths of this company.

Initially, we can of course note as a major advantage the dominant position held by the Google search engine worldwide.  In fact, in the specific area of online search Google remains the uncontested leader that holds the major market share far ahead of its competitors. To hold this position the American giant relies on constantly improving the technology used by its online search engine which leaves little opportunities for the other market players to take a larger share of the market.

Still on the subject of the Google’s strong points, we can also cite the major success enjoyed by its Android operating system. The Android operating system for mobile telephones was purchased by Google a few years ago and now this high tech group benefits from the massive rise in the use of smartphones worldwide many of which use this operating system. Due to the support of Google, and its well designed marketing strategy, Android is currently at the top of the market ahead of Apple, Microsoft and even Blackberry. The Android operating system in fact currently represents over 80% of the market and includes over a billion active users. To achieve this objective Android particularly relies on certain advantages such as the fact that it works on numerous telephone brands such as HTC, and Samsung, as well as cheaper mobile phones, which means it can reach a wide range of consumers contrary to its main competitor Apple of which the iOS system only works on certain brand devices which are relatively expensive to buy and therefore inaccessible to those with a smaller budget.

Negative factors for Google shares
The factors in favour of a drop in the Google share price:

After reviewing all the different strong points of the Google group we now offer you the opportunity to learn about the weaknesses of this company that could contribute to a negative influence on this company’s share price over the medium to long term. 

Firstly, we can of course highlight the fact that the profitability of the Google group depends greatly on advertising. In fact, it should be remembered that 90% of the Google revenue is generated by corporate and private advertising. The budget that these companies spend on advertising depends greatly on the economical situation and other factors such as the habits and spending power of consumers as well as the companies’ budget strategies. Therefore, all the elements that have a negative effect on the general economy could influence the advertising market and consequently the income of the Google group.

Finally the last negative point relating to Google relates to the lack of any great success achieved by the social networks the company tries to develop. In fact, although the Google group occupies first place on the online search market through its search engine of the same name, the company has experienced several setbacks concerning the social networks sector. In fact, since 2003, Google has tried to position itself in this market against the main player, FaceBook, but without experiencing any great success. Google has even been overtaken in this sector by several outsiders that have cropped up recently and implemented themselves in this highly popular sector.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How to complete a financial analysis of the Google Company?

To complete a comprehensive and optimal financial analysis of the Google Company you will certainly need a number of elements including the turnover figures of the group of course as well as other data. We notably refer to an analysis of the profits per share, an analysis of the profitability of Actions on Google including the profitability and margins of the Alphabet Group, an analysis of the returns on this Google asset with its history as well as an analysis of the Google treasury.

How to complete a comprehensive analysis of the Google share price?

To analyse the Google share price you will need to implement two types of analyses, a technical and a fundamental analysis. For the technical analysis we advise you to use the stock market charts available from your online broker. Concerning the fundamental analysis you will need to take into account all the events and news that could influence the financial results of this company and thereby lead to a change in the share price and an increase or decrease in investor interest.

What is the relationship between Google and Alphabet?

Since the month of August 2015 the Google Group has reorganised its activities and Google has become a subsidiary of a larger group called Alphabet. Alphabet is therefore the parent company of Google. Since this change Google no longer exercises certain activities that do not directly relate to the Internet or IT which have become subsidiaries of the Alphabet Company. Google shares are therefore completely independent assets from Alphabet shares.

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