Google Financial Performance from Time to Time-Google LLC or commonly known as Google is the king of internet companies in the US, alongside Amazon, Apple, Meta (Facebook), and Microsoft, and one of the biggest in the World. Founded on September 4th, 1998, by Sergey Brin and Larry Page (Both of them are Ph.D. students at Stanford University in California), google grow and become one of the giant technology companies in the World. As of 2021, Alphabets (Parent of Google) has 132 thousand employees and has headquarters in Mountain View, California, United States of America. Now, on the internet, Google search engine or simply known as Google.com become one of the most visited websites in the world.
Google’s business Journey
Google is not a conventional company. The founders of Google / Alphabet, Larry Page and Sergey Brin, want this company to become a special company with an unconventional spirit that has been a driving force throughout our history, inspiring tackle enormous handicaps. In the beginning time, Google is the search engine platform. At that time, they tried to compete with Yahoo as the major player in the search engine of the Internet.
With all of their effort and hardworking, they can grab the market of Yahoo and overtake the position. They dominate the search engine world and with their incredible innovation, they tried to build a new platform for internet business. Some of their innovations are Android, Google Chrome (Browser), Google Cloud, Google Maps, Gmail (e-mail), and some other products. Furthermore, since 2015, the company has invested around $100 billion in R&D. In the Stock market, in 2004, they do initial public offering in the Stock market with the price of around $85 per share. in 2022, the price of Google shares around $2,500 per share. It grows more than two hundred times.
In its business journey since its founding, Google has had some successful and impactful acquisitions to its business revenue and income. They bought Android for $50 million in 2005 and YouTube for $1.65 billion in 2006. Nowadays, YouTube is one of the main sources of Google revenue. Basically, YouTube is a video-sharing website created by three former PayPal employees i.e. Chad Hurley, Steve Chen, and Jawed Karim. Nowadays, many companies around the world used YouTube advertising to help promote their products or services. Basically, YouTube is used by some people to make content independently, and more importantly, they can get the revenue if they upload their videos at YouTube and meet the requirement that they have made. Until now some people interested to become YouTube content Creator with miscellaneous content.
Meanwhile, Android is used in most Smartphone Operating systems. Many Smartphones brands, namely Samsung, Asus, Lenovo, Xiaomi, and others still use android in their Operating systems. Android can let some people make the application in Android. Basically, android gives people to express their idea in making applications. It’s a decentralized application. Some people have the same opportunity to make the applications (apps). They can create and design it freely. That’s why Android is successful in the market now because of its open-minded application to people.
Nowadays, Google is the subsidiary of Alphabet. Besides Google, Alphabet has numerous businesses in different areas of technology. Some of them are Verily (Human health), Waymo (Autonomous driving), Wing (Drone-based delivery of freight), and X Development (Research and development for “moonshot” technologies). In the Future, maybe Alphabet can explore different areas.
As of Now, Along with the development of the company, Google comprises two segments: Google Services and Google Cloud. Google Services aims to serve people to improve their lives and productivity. Google service products and platforms include ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. Furthermore, Google also invests in infrastructure, security, data management, analytics, and AI. The Google Cloud consists of the Google Cloud Platform and Google Workspace products. Google Cloud Platform enables developers to build, test, and deploy applications on enormous scalable and reliable infrastructure. Meanwhile, Google Workspace includes apps like Gmail, Docs, Drive, Calendar, and Meet that are designed with real-time collaboration and machine intelligence to help people work smarter and efficiently.
Google Financial Performance
From Eric Schmidt to Sundar Pichai, now Google still has become the main company of technology. Some people always waited for the next breakthrough and innovation. Because of its radical innovations in technological sectors. It has impacted the financial conditions and performance of this company.
From time to time, Google has shown incredible performance in financial results annually. Based on the Alphabet Annual Report / 10K, In 2014, the assets of Alphabet were just 129 billion US. Dollar with liabilities around 25.3 billion US. Dollar. Meanwhile, in 2022, the asset of Alphabet reached 365 billion US. Dollar and Liabilities around 109 billion US Dollars. It is shown that Google and Alphabet are still in a growing trend.
In the income statement of Google from 2014 to 2022 on the annual report / 10K, Alphabet always has positive growth of income annually. In 2014, the revenue reached 66 billion US dollars and the net income of Alphabets reached 14.1 billion US. Dollar. Meanwhile, in 2022, the revenue of Google has reached 282 billion US. Dollars. It increased more than 3 times compared to the period 2014. Net Income, on another side, becomes around 59 billion US Dollars. Based on the Alphabet annual report in 2022 (10K), Google advertising (Google Search & other, YouTube ads, Google Network), and google cloud still become the main backbone of revenue to Alphabets.
Based on some financial Ratios from Balance Sheets and Income statements, there are some indicators that can be measured, Debt to Equity ratio (DER), Debt to Asset Ratio (DAR), and Net Profit Margin (NPM). Financially, the Debt to Equity ratio (DER) of Google from 2014 to 2022 is around 0.3. This value means every 1 US dollar of equities is equivalent to 0.31 US dollars of liabilities. Based on the Debt asset ratio (DAR), the value of the DAR of Alphabet is around, and the average value of Alphabet’s DAR from 2014 to 2022 is around 0.24. This value means that every 1 US Dollars of Equities, equivalent to 0.24 of liabilities. Meanwhile, in the Net Profit margin ratio (NPM), the ratio between revenue and net income is about 0.21. This value means that 21% of revenue becomes net income for Google / Alphabet.
Nowadays with the positive financial performance of google, some shareholders are happy and their investment can have an impact on the growth of google’s stock price. By the way, some of the biggest shareholders of Google/ alphabet shares are The Vanguard Group, Inc (founded by Jack Bogle) with 7.22% of the stake, BlackRock Fund Advisors (Founded by Larry Fink, Robert S. Kapito, and Susan Wagner) 4.37% of the stake, and Fidelity Management & Research Co 4.12% of the stake.
Bibliography of Google Financial Performance from Time to Time
Alphabet.2022. Alphabet 10-K. Accessed via https://abc.xyz/investor/ on May 23rd, 2023.
Wikipedia. 2022. Google. Accessed via https://en.wikipedia.org/wiki/Google on February 22th, 2022
Wikipedia. 2022. Alphabet. Accessed via https://en.wikipedia.org/wiki/Alphabet_Inc. on February 22nd, 2022.