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Google Stock

By Edited Sep 28, 2015 2 4

Google is currently facing situations that many other large corporations have experienced. The way that they will be handled could affect the value and the price of its stocks. [1]


Google has numerous executives on its payroll to oversee different departments and its infrastructure too complicated to explain. Its huge challenge is related to not just attract skilled workers, but also to retain them. They could possibly leave Google for its behemoth competitor for social networking, Facebook, or work for the much appreciated Apple for its technology designs. [1]

Their personnel consists of total number of employees hovering around tens of thousands. They also hired a recruiting firm to search around the globe for skilled workforce. [1]

Another expense that has became eminent is a compensation plan giving cash and large restricted stocks grants with the promise of 100x returns. Employees also can actually have a demonstrable and material impact on company-wide outcomes. [1]

Real Estate

Google has a considerable large campus. That what happens to companies that grow to become a very large company. Thus, their real estate properties also enlarges as if it is a big REIT. [1] The name of the spot that Google has its headquarters is Googleplex. It has four core buildings that totals about 506k ft2 and was actually built for SGI to place their offices. Silicon Graphics sold the property back in June 2006 for $319 million three years after Google started to lease it. [2]

Power Business

The massive infrastructure of the campus directly made Google get involve in the power business. [1] In Spring 2009, the corporation launched a home energy management, Google PowerMeter. It is a free monitoring tool that lets people view their home's energy consumption when logged onto the Internet. A new subsidiary, Google Energy, January 2010 announced that it was planning to buy and sell electricity. It will use the lower energy wholesale cost being bought is meant to cut down its own enormous energy bills. Lastly, Google already owns and operates its own rooftop solar array on the buildings it utilizes. [3]

Payout Dividends

Google does have an option of distributing dividends to its shareholders. They could develop ideas to do that if they see it is difficult to focus on a small number of products. Another reason is to acknowledge that monthly double-digit growth is unable to last forever, Yet, paying dividends could send a message that it is giving up the promise of that growth stock brilliance. The strategy also is a death-knell for many fast-growing companies. Ingrained management dislike paying out excess cash despite the corporate financing logic and investing discipline. Instead they prefer to invest in risky projects, work up other companies, and twist stories to make it seem like the company continues to prosper. [1]

Slower Growth

Other companies such as Intel, Kodak, Microsoft, and Xerox have experienced slower than usual growth. When corporations have attempted to diversify their avenues of earning revenues, they hardly became successful. For any company that was successful when acquiring more businesses that were truly beneficial, then it is likely those were closely related to parts that was capable of enhancing the core IP and culture of the firm. It is common for businesses solve their insecurity of expecting slower growth is to acquire competitors, commence new ways to grow, and get into new businesses. [1]

A prime example of a mishap happened 20 years ago with Microsoft having excess cash to give to shareholders. Instead, they yearned to try and time the stock market and lessen the dilutive impact of employee stock option exercises by using both cash and derivative purchases of stock. It created a cumbersome and often inopportune series of buybacks that received negative reactions from shareholders. Microsoft also invested in companies that sold various different products such as AT&T (T), Comcast (CMCSA), and Nextel (S). The shares that Microsoft bought didn't gave them a voice in any decision-makings. It spent $30 billion for home and entertainment that caused them to lose tens of billions of dollars that may pay off sometime in the future. [1]

Lately, Google has been buying a lot of start-up companies before they have matured into a valuable one. One can see it is a way to recruit entrepreneurial individuals with talents. [1]

Internet is Able to Change Quickly

There are reasons to think Google's dominance on the Internet be lessened for the medium to long-term time frame. It used to be able to get hold of every information on the world wide web. Some media outlets have started to only give paid members of their websites access to their materials. Firewalls are being utilized to thwart any possible abuses. Therefore, Google searching for news has resulted in finding fewer information to gather. [4]

Another trend, which is more troublesome to Google, is people using the Internet for the social aspect of it. In terms of time spent, Facebook is one of the most used websites. It is not relying on Google's search engine or any other of its products for its members to interact with. Thus, with members logging into their Facebook accounts for hours, a large portion of the Internet is out of Google's reach. [4]

A more bigger threat to Google is that Internet users used to surf the World Wide Web to search for information and visit the top websites of the search results. Now that technology has enabled individuals to interact with other people. Users that are sharing links on Facebook is actually helping the social network build its own directory/search engine. [4]

Google should worry that Microsoft's Bing, its main competitor for search engine is a Facebook investor. Both parties has increased their collaborations with each other when Microsoft was letting Facebook's 550 million users have basic access to Bing. It is only the beginning of a relationship. Yet, having access to information on Facebook could affect Google's position. [4]

Google needs to work on something so its future involves being part of the "dominant internet player." It needs to be committed to play a part of social internet. It has enough cash to acquire a major company such as Twitter that can help with the possible evolution. Another option for Google is to go through with a superb marketing push for a product. [4]

Technical Information on Google Stock

Based on beginning of the month prices, Google stocks price reached its highest price at $707.00 per share on October 1, 2007. It is a gain of 691% which started at $102.37 on August 19, 2004 (day of its IPO). It was at $595.47 on November 1, 2010. [5 - 6]

If you want to buy shares of a mutual fund that has Google stocks as part in its portfolio, then take a look at the list of the top mutual fund holders. [7]

1. American Funds' Growth Fund of America - Class A (AGTHX) has about 8.7 million shares of Google stocks, which comprises of 3.54% of its portfolio.
Reported on June 30, 2010

2. Fidelity's Contrafund (FCNTX) has about 6.3 million shares, which comprises of 2.59% of its portfolio.
Reported on August 31, 2010

3. Vanguard's Total Stock Market Index Fund (VTSMX) has about 2.5 million shares, which comprises of 1.04% of its portfolio.
Reported on June 30, 2010

4. Vanguard's 500 Index Fund (VFINX) has about 2.2 million shares, which comprises of 0.91% of its portfolio.
Reported on June 30, 2010

5. T. Rowe Price's Growth Stock Fund (PRGFX) has about 2.2 million shares, which comprises of 0.89% of its portfolio.
Reported on June 30, 2010

6. American Funds' The Investment Company of America (AIVSX - Class A, AICBX - Class B, AICCX - Class C, AICFX - Class F 1, ICAFX - Class F 2) has about 2 million shares, which comprises of 0.82% of its portfolio.
Reported on June 30, 2010

7. Vanguard's Primecap Fund (VPMCX) has about 1.8 million shares, which comprises 0.73% of its portfolio.
Reported on June 30, 2010

8. SPDR's S&P 500 ETF Trust has about 1.7 million shares, which comprises 0.71% of its portfolio.
Reported on March 31, 2010

9. Vanguard's Institutional Index Fund - Institutional Index Fund (VINIX) has about 1.7 million shares, which comprises 0.70% of its portfolio.
Reported on June 30, 2010

10. Fidelity's Growth Company Fund (FDGRX) has about 1.7 million shares, which comprises 0.69% of its portfolio.
Reported on August 31, 2010 [7]


[1] http://wallstreetpit.com/50410-the-challenge-of-being-google
[2] http://clipmarks.com/clipmark/6FC2B707-D5A3-426E-B70A-DA1BC00BA978/
[3] http://venturebeat.com/2010/02/19/google-gets-go-ahead-to-buy-sell-energy-just-like-a-utility/
[4] http://www.intelligentspeculator.net/investment-talking/is-google-goog-being-left-behind/
[5] http://finance.yahoo.com/q/hp?s=GOOG&a=07&b=19&c=2004&d=10&e=27&f=2010&g=m&z=66&y=66
[6] http://finance.yahoo.com/q/hp?s=GOOG&a=07&b=19&c=2004&d=10&e=27&f=2010&g=m&z=66&y=0
[7] http://finance.yahoo.com/q/mh?s=GOOG+Major+Holders



Dec 3, 2010 7:01pm
Interesting and detailed analysis of Google ... and I think you have done a good job with this article!
Dec 3, 2010 9:25pm
Thank for the compliment, reading, and commenting on my article, Deborah Diane.
Dec 4, 2010 11:23am
Informative breakdown of Google's acquisitions. Reminds me of the old adage. If you play the game to long, your eventually going to lose.
Dec 5, 2010 8:24pm
Thank you pwarlick for reading my article and sharing your thoughts.
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