Competitive Position & Investment Positives

Part One: Competitive Position 

Question One: Industry Share 

Online Research 

It is a fact that Google has near absolute dominance when it comes to online search in general and by extension revenues made through online advertising. Currently, more commerce is being undertaken online, internet connectivity and speeds are rising so are internet access speeds (Waral & Handrahan, 2017). This has resulted in higher usage on online searches, more so on the mobile platforms. In these platforms, the presence and indeed dominance of the Android system propels the market share of Google. Google Chrome, another software developed by Google also adds to the company’s dominance in online searches. Similarly, YouTube’s numbers continue to soar by the million on a monthly basis (Waral & Handrahan, 2017). Therefore, Google’s market share continues to grow as its online search market also grows. Google revenues on this arena, therefore, continue to soar. 

Cloud Computing & AI 

The need for computers as well as their uses keeps on growing, thus expanding their market. One of the market areas that are exponentially expanding is the Cloud computing and AI segment (Waral & Handrahan, 2017). The public cloud market is expected to grow by 25% annually until the year 2020. Google has invested exponentially in this area but does not enjoy the level of dominance it does in internet searches. Indeed, it's competitor Apple and IBM seem to be having a larger impact than Google (Blankenhorn, 2017). However, TensorFlow, Google’s innovative AI system is one of the most advanced in its market segment and might give Google an edge in the cloud market (Waral & Handrahan, 2017). Therefore, the market itself is expanding and Google has a good chance of having a fair share in the expansion. 

Social Media 

In social media, Google has been made to taste the fate of its competitors in internet searches in terms of absolute domination. Google Plus, which was Google’s venture into social media has made little if any impact on the social media front. Google’s main competitor in the overall internet advertising, Facebook, has been mainly dominant in the social media scene with about 83% of the market (Waral & Handrahan, 2017). Other competitors such as LinkedIn have minor shares but are still outdoing Google. This market is generally expanding but Google is not doing well in it. The company must either decide to invest heavily in this sector or give it up altogether. Generally, Google’s share in the social media industry is diminished and continues to reduce even as that of its main general competitor Facebook continues to grow. 

Second part: Investment Positives 

Google makes most of its money from what it does best and what Google does best continues to thrive. Google provides 99% of the revenue in its parent company Alphabet whose capitalization has passed the US$ 600 million mark and keeps on growing (Pullen, 2017). 83% of this revenue is generated from internet search advertisements which is part of the core business focus for Google (Mogharabi, 2017). 

When it comes to organizing information and availing it on the internet then using access to the same in advertising, Google is the best in the world at it (Mogharabi, 2017). Indeed, Google has managed to overcome competition in this area and dominate the market. Google Chrome and the Android platform are among the most commonly used software packages to access the internet (Edelman & Geradin, 2016). Both have been developed by Google and are designed to give the company an edge over its competition. This ensures that Google’s dominance in this area today will continue into the future. 

Management is another ground for Google’s investment positives. Alphabet Inc. mainly driven by Google has risen to be the largest company by capitalization in the world, yet Google itself is just under two decades old (Mogharabi, 2017). The initial founders of Google Larry Page and Sergey Brin are still directors at Alphabet Inc . Further, Google’s leadership includes some of the best entrepreneurs in the world including CEO Sundar Pichai and YouTube CEO Susan Wojcicki (Barr & Winkler, 2015). This team has excelled repeatedly and would be a good bet for future excellence. 

Google has also shown a great knack for making great acquisitions which have enabled the company to continue excelling in its activities (Mody, 2013). YouTube, for example, is one of the great success stories kindred to Google acquisitions. Currently, Google is working on several probable high-profile acquisitions such as Pinterest . These acquisitions will enhance Google’s profitability (Zack’s Equity Research, 2017). 

However, Google has tried many ventures, yet almost all its success is predicated on one very successful venture of internet searches. The company failed miserably through Google Plus, its venture into social media (Mogharabi, 2017). The only real competitor that Google faces in internet advertising is Facebook thus venturing into social media must have been important for Google, yet the company failed (Ingram, 2017). Several of its hardware-based projects have also been met with some major failures. This creates a possibility of uncertainty in the future of Google but this cannot be in the near future. 

A risk also lies in the fact that the success of Google is mainly premised on only one area . As long as internet searches remain popular, Google will continue to thrive. Yet only two decades ago, internet searches were an unknown entity. A decade ago, social media was only beginning to thrive. The world of information technology is extremely dynamic and Google must create a second success story or its success might be short-lived (Reeves, 2015). 

References 

Barr, A., & Winkler, R. (2015, August 10). Google creates parent company called Alphabet in restructuring . Retrieved October 02, 2017, from https://www.wsj.com/articles/google-creates-new-company-alphabet-1439240645 

Blankenhorn, D. (2017, September 27). Alphabet Inc. (GOOGL) Google is in a world of hurt . Retrieved October 02, 2017, from https://finance.yahoo.com/news/alphabet-inc-googl-google-world-170431638.html 

Edelman, B., & Geradin, D. (2016). Android and competition law: exploring and assessing Google’s practices in mobile.  European Competition Journal ,  12 (2-3), 159-194 

Ingram, M. (2017, January 04). Here's how Google and Facebook have taken over the digital Ad industry . Retrieved October 02, 2017, from http://fortune.com/2017/01/04/google-facebook-ad-industry/ 

Mody, S. (2013, October 25). The most widely held stock in mutual funds is ... Retrieved October 02, 2017, from https://www.cnbc.com/2013/10/24/google-takes-top-spot-apple-loses-juice-among-fund-managers.html 

Mogharabi, A. (2017). Google's dominance in the digital ad market should remain intact. Morningstar Direct 

Pullen, J. P. (2017, April 24). Google's parent company achieves big market cap milestone . Retrieved October 02, 2017, from http://fortune.com/2017/04/24/alphabet-google-market-cap-valuation/ 

Reeves, M. (2015, August 18). Google couldn't survive with one strategy . Retrieved October 02, 2017, from https://hbr.org/2015/08/google-couldnt-survive-with-one-strategy 

Waral, J., & Handrahan, S. (2017). Alphabet company primer. Bloomberg Prime 

Zack’s Equity Research. (2017, October 02). 5 mutual funds to buy on Google's "Compelling" performance . Retrieved October 02, 2017, from https://www.zacks.com/stock/news/266565/5-mutual-funds-to-buy-on-googles-compelling-performance