Google (GOOG)

History of the Company

Google began in 1996 as a research project. Larry Page and Sergey Brin, students at Stanford University, developed their search engine with the unique PageRank algorithm, designed to translate the backlink data for a specific web page into a measure of importance, thereby returning more relevant search results. 

Andy Bechtolsheim took a gamble and provided the first $100,000 funding for Google in August 1998, for a company that did not yet exist. Google was incorporated in September 1998, and the gamble paid off when people quickly realized that Google returned better results than existing search engines. 

The company continued to grow, with the first IPO taking place on August 19, 2004. Today, Google is everywhere. The phrase “to google” has become a commonly used verb in several languages. Google has launched its own web browser, operating system, and line of smart phones. Google Earth, Google Drive, Google Voice, Adwords, and Gmail are just a few of the Google services dominating the market today. 

Trading Google: What You Need to Know

  • Google trades on the NASDAQ exchange. In 2004, the IPO price was $85 per share. Google was added to the S&P 500 on March 31, 2006, and its share price immediately rose 7%. In October 2013, the share price closed above $1,000 for the first time. Google does not pay dividends to shareholders, but its rapid growth and high share price make it a very popular investment. Google’s annual report and quarterly earnings reports are important things to look at when evaluating stock performance and predicting price movements. 
  • Google’s advertising business model centers on AdWords and AdSense, which use search history to show targeted ads to consumers. Revenue also comes from its smart phone technology and other products, but the majority of its earnings are from advertising. Google’s ability to develop other revenue streams will determine its future success.
  • Google has made several acquisitions in recent years, with the acquisition of Youtube.com in 2006 being the most memorable. The company continues to provide innovative and practical technology solutions, and shows no sign of slowing down. Most analysts consider Google stock a strong buy. 

Google continues to expand and dominate, but for how long remains to be seen. Anyone who wants to trade Google stock should carefully analyze the market conditions before trading.

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