Google Inc.

Company Overview History Google Inc. is an Internet/computer software company which hosts many internet based and software services and products. At its core is google. com –the world’s top search engine. Google’s stated mission is “to organize the world’s information and make it universally accessible and useful”. Google was founded by two PhD candidates at Stanford University –Larry Page and Sergey Brin. It was incorporated on Sept. 4, 1998 and went public on Aug. 19, 2004.The company’s head courters are in Mountain View, California. Since its inception Google has experienced explosive growth and quickly emerged as the world’s premier search engine. The word “Google” has been listed as an English Verb (-to search the internet) in Merriam Webster and Oxford Dictionaries since 2006 – a testament to its widespread popularity. Aside from the company’s web search engine it offers a variety of other online applications meant to enhance how people acquire information and connect online.The following are some: Gmail (email), Google Buzz (Social networking), Google Docs (document collaboration), You Tube (video sharing), Google maps, Google News, and many more. For advertisers Google has Google AdWords which allows advertisers to bid on having their ads appear alongside specific Google word searches. In addition Google AdSense enables advertisers to have their ads displayed alongside relevant content on other private websites. In addition Google developed a smart phone operating system (called Android) to compete in that segment of the web-search market.Competitors While Google has thus far won the battle of search engines -being far more popular than Yahoo and Bing, it still faces fierce competition from e-commerce sites such as Kayak (travel), Monster (Jobs), WebMD (Health), Amazon, and EBay. Consumers often turn directly to those sites in search of their services or products. Social networking sites such as Twitter and Facebook are also increasingly being used as gateways for information. Google earns 96% of its revenue via advertisements as such it is in ompetition with other online and offline advertising venues including radio, TV, magazines and billboards. There are also many general providers of online products that compete with other services Google provides such as Gmail, YouTube, and Google Docs. For the most part Google is ahead of its competitors, and well positioned to compete with new developments in the industry. Risks Approximately 67% of Google’s voting power is in the collective hands of Larry Page, Sergey Brin, and Eric Schmidt.General shareholders thus lack influence which carries an inherent risk Ninety six percent of revenues are generated thru advertisers who can generally terminate their contracts at any time, this carries obvious risks. There has recently been concern and public criticism regarding the privacy practices of Google. There is a significant risk that public opinion or legislation will limit Google’s ability to deliver ads targeted to individual user profiles. Regulatory authorities around the world are currently considering legislative and regulatory proposals in this regard.Despite these risks Google is a strong company known for its carefully structured and innovative corporate culture Ratio Analysis From 2008-2010 Revenue has increased at a faster rate than Cogs and the Gross Profit Margin has increased. This indicates that Google has been able to generate more revenue per dollar spent on input. Net Income has grown at a faster pace than revenue and Return on Sales has also grown. This illustrates that Google has been able to bring down its costs in relation to revenue. Google’s assets have increased at a far greater rate than its Revenue; its Asset Turnover ratio is thus lower.However, since Google has been able to Increase its Gross Profit Margin and its Return on Sales, its Return on Assets has only dropped one percentage point in 2010. Current liabilities have increased at a far greater rate than Current Assets, and in 2010 Current Liabilities was 17. 3% of the (condensed common sized) balance sheet up from 6. 8% the previous year. This has resulted in a lower Current Ratio. The Debt Ratio has also risen as a result. Despite this negative change, Google is still very liquid/solvent at a Current Ratio of 4 and a Debt ratio of 20%. Overall Google is a solid company and a good investment.