Monday, December 21, 2009, 6:54PM ET - U.S. Markets Closed.

What's Next For Google? Trillion-Dollar Company Or Toast?

Posted Nov 06, 2009 11:42am EST by Henry Blodget in Investing, Internet, Media

Microsoft still has dreams to the contrary, but Google has won the search game.  With an estimated 70 percent market share worldwide and nearly $25 billion of revenue, the company has left the rest of the industry in the dust.

But what's next?  Search growth is slowing, and there's not much more market share to gain.  So unless Google wants to have all the sexiness of a utility, it needs to find another growth engine.

There are three possibilities, says Ken Auletta, author of the new book Googled: The End Of The World As We Know It:

  • YouTube
  • Mobile
  • Internet-based applications (like email)

None of these businesses is as profitable as search, and Google has been trying to build all three for years.

But YouTube's new emphasis on professionally produced content has radically improved the unit's financial performance.

And as evidenced by the advertising blitz accompanying Motorola's new "Droid" phones, the mobile business is finally gaining traction.

Again, neither if these businesses currently have economics that look anything like those of the search business.  But people didn't think much of search economics in the early days, either.

45 Comments

- Friday November 06, 2009 11:50AM EST

Again maybe they'll provide free government that doesn't cost us all $Trillions. Mostly mis-allocated tax dollars. No Senator should be in office more than 2 terms (12 years) and no Congressmen/women should be in office more than 3 terms (6 years) otherwise they do too much harm to us all. VOTE OUT the INCUMBENTS in 2010.

Yahoo! Finance User
Yahoo! Finance User - Friday November 06, 2009 11:52AM EST

Google is having a hard time to get into other markets. They should stick with what they do best. Search and advertisement. Mobile adventures may survive but is not a blockbuster. When the entire market collapses, Google will be one of the survivors, but do not expect the stock price to go up to the multiples it is trading at now. Overall, stocks will become cheaper, even for those whose business is sound and growing. And one day Google will pay dividend too. http://www.tradingstocks.net/html/near_bottom.html

- Friday November 06, 2009 12:03PM EST

Follow the trend: www.originalturtletrader.com

- Friday November 06, 2009 12:09PM EST

Google's just getting started. The disruptive character of the business involves radical efficiencies in every area it gets into, with Google a winner - not necessarily the only or even biggest winner. Imagine a future in which one could have access to, say, TV channels whose programs were financed solely by advertising, thus killing the rip-off cable comapnies: call it Googlebacktothefuture.com.

- Friday November 06, 2009 12:09PM EST

Yahoo! Finance User - Friday November 06, 2009 11:58AM EST No TT report on 10.2% x 2 Unemployment today? ////////////////////////////////////////////////////////////////////////////////////////////////////////////// Yes, they are thus far avoiding the most important topic of the day. Keep ignoring it as it's only 10.2% reported and about 18%+ actual.

- Friday November 06, 2009 12:13PM EST

It's amazing how some clueless analyst can lift the market with a GE projection that has as much chance of becoming reality as not materializing. This is especially not credible since GE lied to all their investors earlier this year concerning their dividend. Many investors like myself will never buy GE again when they can so blatantly lie to us. GE gets pumped up to keep the market artificially higher than it should be based on a terrible 10.2% unemployment report.

- Friday November 06, 2009 12:16PM EST

They better buy some share in Facebook. Google will be tomorrow's Microsoft.

- Friday November 06, 2009 12:17PM EST

This guy is a complete idiot. I don't know how he even wrote a book about something which he has no idea about. If he gets a question he doesn't understand, which is a lot, he just sidesteps it.

- Friday November 06, 2009 12:25PM EST

Terry: Yes, I've been burned twice by GE and I deal with the stock now only as a trade. Until they spin off the finance arm they'll never realize the underlying value of the other assets - why the big shareholders put up with this is anyone's guess. Buy it on good economic news, sell it on bad financial news.

- Friday November 06, 2009 12:26PM EST

Google is what the American dream is all about!!! Isn't??? Anyone want to enlighten me???

- Friday November 06, 2009 12:26PM EST

If knowledge is power, then Google is the most powerful company on the planet!

- Friday November 06, 2009 12:30PM EST

goo goo....

- Friday November 06, 2009 12:31PM EST

goo goo go bye bye

- Friday November 06, 2009 12:33PM EST

Is this all advertising for Google? The Net never reported us buying TP, when we had a business?

- Friday November 06, 2009 12:35PM EST

The Google people don't seem particularly worried. They are still at it, flaunting their wealth, waving thousand-dollar bills out their car windows at Mountain View police for blow jobs, masturbating in public areas of the Tech Center, etc., etc. It's going to be a real shame when they die in the earthquake -- other than that, though, they're doing fine, thanks.

- Friday November 06, 2009 12:37PM EST

I don't normally use Google for search (loyalty to Yahoo, right!) - the various engines seem about the same to me, plus the Google interface is primitive looking and the smart-alecky way they address you (I'm feeling lucky, etc) just rubs this ol' widow the wrong way. The G-men can stick it. "you tube" is fun however - so much old TV is available there (forgot how much I liked Johnny Carson, for example), but it doesn't seem this makes them any money.

- Friday November 06, 2009 12:42PM EST

Google has billions in cash and no debt. Combine that with the young, visionary people in charge and you may have the next-generation Warren Buffett.

Yahoo! Finance User
Yahoo! Finance User - Friday November 06, 2009 12:52PM EST

Yes, wheat toast, please. Eggs scrambled, bacon crisp, hash browns crisp – cooked on both sides, small orange juice and coffee. Thank you.

- Friday November 06, 2009 01:05PM EST

Google is a joke. Cuil, Yahoo and Bing have much better search algorithms. Just pump and dump. Insiders have been selling. The chumps are the ones buying the stock.

Yahoo! Finance User
Yahoo! Finance User - Friday November 06, 2009 01:17PM EST

Yea, The Dows at 10,000 and unemployent is at 10.2%..... Happy days are here again......

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