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A Top Down Approach To Stock Valuation For Google Stock

2901 words - 12 pages

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A top-down approach to stock valuation for Google StockSection 1: Investment summaryI would recommend the buying of Google stock. The company's current strategy would probably increase their chances of gaining strategic alliances, and make them a more attractive partner. As other companies see that Google is no longer going head on with partners, they may be more willing to cooperate with Google as well. Especially in developing markets, such strategic partners can offer Google a huge advantage, which will translate to increased value of Google's stocks.Section 2: Overview of the companyGoogle inc. is a company that offers a wide range of products and services to online users. The most popular service the company renders is their search engine named Google. The Google search engine uses PageRank, Algortihms, Link Measurement, and Profiling as part of its objective to deliver the most accurate and most relevant results to the searcher. Google also offers a very successful email product called Gmail. Gmail is unique in that it allows the email account holder much more free space (7GB) than the average free email client. In my experience, Gmail is an exceptional email client as it provides many more services than the standard email.Google Maps is another successful application in that it is not just an average web mapping system. This advanced mapping system offers satellite imagery of most urban cities in the US and around the world. It also can be integrated with many mobile phones, which allows for a GPS mapping system directly on the phone. These features allow its users to find information and easily share it to anyone in the world. With the amount of traffic Google receives on a daily basis, Google has to have some kind of strategy to generate its revenue. One of Google's main sources of revenue is advertising. In 2007, advertising accounted for 99% of Google's revenues. Google implements two main advertising products which are AdSense and AdWords.AdWords is Google's flagship advertising product and main source of revenue ($16.4 billion in 2007). AdWords offers pay-per-click advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution.Section 3: The macroeconomicsGoogle competes to attract and retain relationships with users, advertisers and Google Network members and other content providers in different strategies. Google competes to attract and retain users of its search and communication products and services. Most of the products and services that Google offer to users are free, so they do not compete on price. Instead, they compete in this area on the basis of the relevance and usefulness of their search results and the features, availability and ease of use of their products and services. Google has been an outstanding company in the marketplace ever since its inception and it continues to be and deliver exceptional service to the global...

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