...GOOGLE Financial Analysis Report Prepared for: Financial Management Class – Florida Institute of Technology February 2011 TABLE OF CONTENTS EXECUTIVE SUMMARY 3 COMPANY INTRODUCTION 4 FINANCIAL ANALYSIS 5 Summary Financial Analysis Report 6 WEIGHTED AVERAGE COST OF CAPITAL (WACC) 10 FUTURE CASH FLOWS 12 ANALYSIS OF CASH FLOWS 13 Sensitivity Analysis of Google’s 2011 Future Cash Flow 14 Sensitivity Graph for Google’s 2011 Future Cash Flow 15 Sensitivity Graph for Google’s 2011 Future Cash Flow 15 Inflation Analysis 15 Google Inc. Discounting Future Cash Flows for Inflation @ 1.7%: 16 Footnotes effect on future cash flows 17 Analysis of Google Competitors 19 ANALYSIS OF CASH FLOWS 20 Footnotes effect of future cash flows 21 Analysis of Google Competitors 23 Major Project “post audit” 24 HISTORICAL STOCK PRICE 26 SECURITY ANALYST’S REPORTS 28 DIVIDEND and CAPITAL STRUCTURE 29 CORPORATE GOVERNANCE 30 MERGER and INTERNATIONAL STRATEGY 32 EXECUTIVE SUMMARY This report provides a detailed analysis of Google, an Internet search engine, which will offer information in order to make an informed decision as to whether to invest in Google. This report will also provide information regarding debt securities. The financial report shows that Google is in a stability strategic focus. During the years of 2007 – 2009 their Gross Margin continued...
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...92billion (2013) Employees: 40, 829 Of the thousands of stocks one can invest in, there is only a handful that you can rely on. Google is one of those companies. Introduction Google is an American Multinational Corporation founded by Larry Page and Sergey Brin. Google has a wide range of products and services including search engines, software, advertising and cloud computing. The company gets most of its profits from a service called ‘ADWords’ which is an online advertising service that places ads on search queries. Google’s total advertising revenues amount upto $42.5 billion which is a significant chunk of the total revenues. Google was initially set up as a private company in in September 1998 and later it went public in August 2004. Even though the company went public and the founder’s only own 14% of the company now however they still control 56% of the stockholder voting power through super voting stocks. Google has grown rapidly since it has been incorporated. Google initially just offered its flagship search engine however a series of mergers and acquisitions has triggered a chain of products. Google handles more than 1 billion search requests every day making it a leader in the online industry. Analysts from Alexa Internet, a company that provides commercial web traffic data have confirmed that Google is the most visited website in the world. Company Analysis Google’s financial ratio analysis depicts that the company is in sound...
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...Company Analysis | GOOG | An Analysis of Google Inc | Chelsea Moore 5/4/2015 | Company Analysis Company: Google Google is a well known search engine created by Larry Page and Sergey Brin in 1998. The idea of Google was once described by Page as "the perfect search engine that understands exactly what you mean and gives you back exactly what you want". Since then, Google has developed tremendously into more than just a search engine. The company offers Google Chrome, a freeware web browser, Gmail, Google Books, Play, News, Video, Image search, Maps, and dozens more. Google also works with businesses and offers several products to attract customers and build domains. Google's mission statement is to "organize the world's information and make it universally accessible and useable". Google reports four segments: The Google Website, Adsense Google Network websites, total advertising, and other revenue. The website and Adsense Google Network competes with Yahoo, AOL, Microsoft, Bing, and several other companies. In the advertising segment, Google competes with the previous mentioned along with Monster Worldwide, Expedia, Scripps Interactive, Ebay, and others. In the other revenues segment, Google competes with Oracle, Intel, Hewlett-Packard, and others. In fiscal year 2014, Google has not lived up to expectations. Growth was not disappointing, but Google missed estimates during the first three quarters. In Q4, profitability improved because of the holiday seasons...
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...Google Company Analysis Paper Abstract In this paper, I perform business analysis for Google Inc, the leading internet search engine provider in the world. Google Inc., a technology company, maintains index of Web sites and other online content for users, advertisers, Google network members, and other content providers. Its automated search technology helps users to obtain instant access to relevant information from its online index. The company provides targeted advertising and Internet search solutions, as well as hosted applications (Google profile, 2010). Mission, Goals & Objectives Google, the name of the company, reflects the immense volume of information that exists, and the scope of Google's mission: to organize the world's information and make it universally accessible and useful (Google’s corporation information, 2010). Google’s goals and objectives include the following: The company • Wants to have an improved infrastructure to make their engineers more productive. • Wants to be the best in search in the world. • Wants to push their ad system. • Wants to push their communities and content. • Tries to make sure their tools are running everywhere. • Google is always focusing on innovation (Google’s Internal Company Goals, 2010). Overall, Google wants to make the internet searching experience best for its customers and search results more accurate. Overview of the External...
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...for everyone to access the desired information. They designed a web based search engine that delivers users the relevant result entering the key words. First they gave a name website as BackRub then they changed it into Google. Now, Google is a worldwide company with more than 30,000 employees that takes place in the technology sector and Internet industry with lots of products working on search, operating systems and advertisement areas primarily. There is a long list of Google’s products but the most well known products of are; search engine itself, Google Chrome, Google+, YouTube, Orkut, Android, AdWords and Google Maps. For example, Google Chrome is a powerful and fast web browser with more than 300 million users. Moreover, by using AdWords companies can easily create text or web based advertisements that will appear at both sides of the browser when someone searches some key words related to that company. Google is a multinational corporation and a member of index NASDAQ. Also regarding to the Google’s official website there are more than 70 offices in more than 40 countries and as a result of that scope of the Google is extensive. Aim of the company is to help people all around the world to get what information they want exactly in the easiest way. Google makes money mostly by the advertising. According to the data of 2012, revenue of the company is $49,96 billion (“Annual Financials for Google Inc.,” n.d.). In the first quarter of 2013, they made $14 billion, which shows...
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...Investor Relationship Institute, 84% of the companies who provided earnings guidance, said that they do so in order to “ensure sell-side consensus and market expectations are reasonable (NIRI Member Survey, 2009).” By setting expectations for investors through guidance reporting, reporting companies believe that they are mitigating any potentially negative effects on the company (i.e., a lowering of stock price) due to the possibility of missing target earnings. However, opposing business views believe that offering guidance actually has a negative effect on reporting organizations, causing companies to focus on short-term thinking while neglecting strategic and tactical management decisions that could have a bigger impact on the shareholder’s long-term upside. Many publicly traded companies, such as Costco, Ford, UPS, Coca-Cola and AT&T, agree with this opposing view of no guidance and have decided not to provide forward earnings. They too assert that it “promotes short-term thinking and does little or nothing to increase the company’s long-term value (Delloite, 2009).” Google’s management decided to not provide earnings guidance due to myriad reasons, including their commitment of continuing independence of Wall Street. Google believes that remaining independent of Wall...
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...Google Inc. Company Analysis Paper FINA 3301 Wenxin Nie Introduction of Google Inc. Google Inc. is an American multinational corporation and specializing in internet-related services and products. It is in the leading status in the industry and covers almost 70% of market share compared to other searching engine. Google’s major competitors in the industry of Internet information providers are Yahoo and Facebook; as well as two Chinese corporation Baidu.com and Tencent.. In this case, I would discuss the competitors of Yahoo and Facebook in the following ratio analysis. Google Inc. is well known as an internet base searching engine, it also provides an integrated package of content and services, such as news, e-mails, instant messaging, maps, calendars, music downloads, video streaming and more, all in one place in Google. For the type of Google corporation, it generate revenue primarily by attracting very large audiences, charging advertisers for advertising placement, collecting referral fees for steering customers to other sites, and charging for premium service. The online advertising service has evolved into a primary source of revenue of Google. Furthermore, on August 15, 2011, Google announced an agreement to acquire Motorola Mobility, which is a leading company in the industry on mobile innovation and development. The acquisition of Motorola Mobility enables Google into a higher level of technology innovation development as well as generates more revenue and...
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...SWOT Analysis One of the earliest activities the enterprise performs in developing a strategic plan is a ‘Strength, Weakness, Opportunity, Threat’ (SWOT) Analysis. This analysis looks at internal and external factors to determine areas that the enterprise should focus on to increase its survivability and success as well as areas that the enterprise should avoid or decrease its exposure to. Strengths: • One of Google's major strengths is that its cofounders developed and have continued to foster. It follows a business model based on flexibility, foresight, and a willingness to adapt. [i] • The company is the number one search engine and has established a brand name, in which its users trust. [ii] • Google needs very little end user marketing as the name itself is getting word by mouth publicity.[iii] • Google has a simple interface and it gives comprehensive results without confusing its users.[iv] • Google has low operation cost as it uses low cost hardware and develops advanced software to maximize the performance.[v] • Google provides an interface to 129 languages to make it comfortable to search for its users in different countries.[vi] • According to Fortune magazine, in 2010 Google is ranked 4th in the list of 100 best companies to work for. [vii] • Google also has a range of innovative additional services like Images, Groups, Directory, and News. Google didn’t complicate its website by making itself a portal; rather it kept tabs...
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... “Our mission is to organize the world’s information and make it universally accessible and useful (Google, 1).” The mission can be broken down into two parts. First, the purpose of the company is to “organize the world’s information.” This objective is made possible through Google’s vast indexing over the Internet. Second, and perhaps most importantly, the company makes the information universally accessible and useful. Google’s technologies sort through a vast and growing amount of information to deliver relevant and useful search results in response to user queries. When the company started in 1998, the index contained 30 million documents, whereas today the index includes billions of web pages. Industry Google operates in the Internet Information Provider industry within the Technology sector. Its focus is on “building products and services that benefit [their] users and enable them to find information quickly and easily (Google 2005 Annual Report, 5).” In order to do so, the company follows a development philosophy which differs from other industries. Google initially makes products available early in the development stages by posting them on Google Labs, located on Google’s website. Based on user’s reaction to the product, the company will then promote the product to “beta” status for further testing by users. After about a year or so, Google will decide if the product is of high quality and utility. If the company is satisfied with it, the beta label...
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...media network. Google’s founders built the company around 10 core principles. The on that stands out the most number 6: “You can make money without doing evil” (Thompson, Peteraf, Gamble, & Strickland). Since its IPO in 2004, Google has been a stock market success, consistently performing above the S&P 500 Index, even during the financial crash in 2008. Overall, the company’s financials are solid, with consistent growth in revenues, net income, assets, and stockholders’ equity. However, Google may have grown too rapidly, and it will be difficult for the company to maintain its high stock price and revenues growth while abiding by principle number 6. It follows logically that straying from this principle will result in Google also straying from principle No. 1: “focusing on the user experience instead of the company’s bottom line” (Thompson, Peteraf, Gamble, & Strickland). Primary Issue The primary issue facing Google was that the company was not keeping up with its core principles, specifically, number. 1: “Focus on the user and all else will follow”, number 2: “It’s best to do one thing really, really well” and number 6: “You can make money without doing evil” (Thompson, Peteraf, Gamble, & Strickland). Google is branching off into areas far from its core competency of an internet search. While this is obviously violating their principle number 2, as the Internet grew and changed, it was necessary for Google to the same. However, not all of Google’s new products...
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...Assessment 1: Individual Assignment Written Case Study Report Financial Analysis 1. Use the databases discussed in Tutorial 1 and locate the following information for Google Inc. (5*2 marks = 10 marks): 1.1. Number of outstanding shares for Google Inc. (current stock data): 286, 938, 352 1.2. List of stock exchanges that Google Inc.is listed at: * NASDAQ National Market * Boerse Berlin * Boerse Duesseldorf * Boerse Frankfurt * Boerse Hamburg * Boerse Hannover * Boerse Munchen * Boerse Stuttgart * Bolsa Mexicana de Valores * Bucharest Stock Exchange * Swiss Exchange (SWX) * XETRA Stock Exchange 1.3. The list of top 3 shareholders of Google Inc.: * Mr Lawence Page * Mr Sergey Brin * FMR LLC 1.4. Net income for Google Inc. as at 31/12/2014 (US$): 14, 444, 000 1.5. Total assets for Google Inc. as at 31/12/2014 (US$): 131, 133, 000 Use the information provided in the case and answer the following questions: 2. Identify two key factors behind Google’s early success and provide explanation as to why you believe these factors are Google’s strategic advantages. (2*4 marks =8 marks; word limit: 300 words max) 1. Google decided to implement a modified version of Overture’s cost-per-click model. Google looked at the cost-per-click bids by the relation of an ad’s actual click through rate. This ensured that relevant ad’s got top of the list positions, and ad’s that didn’t receive much exposure incurred less...
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...External Analysis of Google Inc. External Environment Global Internet search is applicable to most cultures all over the world freeing Google from geographic dependence. In fact, the company now has 20 offices in the U.S. and international locations in over 30 countries working on research, sales, and marketing. Google offers a personalized search engine for more than 115 countries, and as language support improves, the company is likely to gain market share. As computers become more affordable, many people in economically disadvantaged countries are gaining access to the internet for the first time and Google would like to route them through its search and productivity products, like Gmail, Docs, and Sites. Google’s web applications are now bundled into the operating system on low-cost Linux-based computers. Demographics Google is well positioned in demographics because it has a relatively young user base. This means that it will be less affected as the Baby Boomers age in comparison to other companies that depend on the 50 to 60 year-old demographic group. Internet search is also not a gender-specific issue, and would not be hurt by changes in the ratio of female to males. The company will however benefit when some traditional and paternalistic societies begin using the internet more frequently. Technology Technology is obviously always improving and Google has taken specific measures to make sure it does not fall behind. Google can use commodity computer parts (cheap...
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...Date and time: November 29, 5pm Name of the Company under study: GOOGLE, INC (Text pages 712-715) Where Headquartered (city/state): Mountain View, Ca Part I: Comprehensive Case Analysis – Developing HR Business Partner Competencies in this Case Analysis 1.0 Background on your Company (Type the Company’s background in 3 paragraphs.). Tip: See the “about us” or company information portion of the company’s website or other source. Keep track of all your sources. They are to be included in Section 10 of this report. The creation of goggle’s company starts in 1996 between two smart students of Stanford University, Larry Page and Sergey Brin. They first try to understand the importance of web pages for people. Their aim was to find the best and faster way to connect people with all information. The company was founded in September 1998, they offer results from a huge amount of Web pages. The results are based on a proprietary algorithm. Google’s technology for ranking Web pages is called PageRank http://www.hoovers.com/company/Google_Inc/hsrfri-1-1njht4-1njfaq.html The company growth gradually because of the index of the Websites and other online content that they made it accessible through their search engine to everybody who has access to internet. The company offers different types of useful search. Today, Google operates the leading Internet search engine, by offering very precise search results from actually billions of Web pages. The company is...
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...Google, Inc. Definition of the problem: Google’s initiative to enter the Chinese market has been the topic of many arguments from different parties, from shareholders to Human Rights organizations and the actual Chinese government. Google’s image and reputation in the media, investors and users’ minds has been deeply harmed in 2006 at the launch of Google.cn. Google core mission is to make the world’s information available to the greatest number of people possible. And offer this service freely & easily. But Google also strongly stands behind the importance of user privacy. Although their refusal to provide the mandated user information to the U.S. Justice Department created a contradiction to what consumers now perceived of Google after its entry in the Chinese market it did not protect the company from suffering a staggering fall in their stock prices (-7.5% on January 11, 2005). This situation and the unprecedented disappointing fourth quarter final numbers had numerous financial specialists thinking about the possibility that Google had at last lost its exponential growth and momentum since its conception in 1998. Moreover, investors were pondering whether their mantra of “Don’t Be Evil” would have the ability to uphold their beliefs and company values while developing internationally or not. The company’s executives and founders also have to face the issue of the services that they provide in China (Gmail, blogging services, etc.) as the Chinese government...
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...marketing programs embedded in its search engine. The largest portion of Google’s revenue comes from advertising and marketing. To be more specific, Google provides third party entities with the means to display ads targeted to specific users depending on factors such as search criteria, online viewing content, and residency. The company uses a system called the cost-per-click basis, requiring the creator of the ad to pay Google when a consumer clicks on an advertisement. Google not only provides services for the common user, but also designs specific products for corporate settings, such as non-profit organizations, government, businesses and schools. Most of its online products are free to use and are supported by text ads that are displayed within the interface. This begs the question of whether Google has a sustainable business model if in the future people begin to ignore internet-based advertisements. For my report, I used two different reports to financially analyze Google Incorporated, which were the 2012 10K form filed with the Securities and Exchange Commission and the Annual report which is posted on it’s website and sent to it’s investors. The 10K report is a document that contains a more detailed explanation of business activity. The 10K is generated annually and has the same financial statements as the annual report, but it is much more detailed and business oriented. Therefore, most of my analysis came from the 10K report. The main purpose of the 10K is to provide...
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