Google (GOOG) is one of the most innovative companies in the world, with the resources to make nearly anything happen. For those who watched "The Internship," you know how different Google is. They have a piece of nearly every industry, and if they don't, they are coming fast. Just look at some of Google's current services:
I plan on analyzing some of their upcoming ventures, which are sure to make an impact on the company. Already, analysts think Google's revenue will grow 17% next year, and profit will exceed $17 Billion, putting them at a forward P/E of less than 17 - but this might be undercutting their potential...
Google Glass might be Google's next "big thing" - in fact, when you google "the future of Google" one of the first things that comes up is Google Glass. Google Glass is reported to cost Google around $225 - much less than the $1500 it charged its early adapters. It is estimated that they will charge between $300 - $600 for the device at the time of the release - even if they sell for just $300, it leaves them with a nice 25% gross margin on the device (but that's just the beginning). IHS predicts that the shipments of head mounted displays to increase 150% this year to 124,000, ahead of its predicted launch in 2014. Google can harness this growth for the coming years, being one of the first to the competition.
They now have the product, but many consumers are still skeptical. Just recently, Google announced that they plan on renting up to 6,000 Square Feet at every Best Buy (BBY) store to help promote their new product. This space can be used to promote the likes of Google Glass, as well as the multiple new products that Google is launching.
Like most everybody in the technology industry, including Apple (AAPL), LG, and Samsung (GM:SSNLF), Google is reportedly working on a 'smartwatch' of its own. Google is already one up on the competitors, with the most popular operating system in the world behind it. Once more, Google can connect both their watch, glasses, and smartphone to create a super connected ecosystem of devices.
Google Video Game
The newly released Ouya is a $99 open source device that runs on android. For $99, the device allows you to open all android apps (for free), undercutting almost all the other gaming consoles out there - but Google won't let that happen. It was recently rumored that Google is creating a console of its own. Though it is unlikely to directly compete with Xbox (MSFT), Wii (OTCPK:NTDOY), or Playstation (SNE), it could follow a similar business model to Ouya (but on a much larger scale).
Why is this important to investors, and what does it all mean for the future of Google? Google used to be known as a search engine, similar to Bing and Yahoo - but it has become much different. ALL of the services above are powered by Android! Google is not just adding to its search engine, but it is creating a universal network of Android users. As of the last quarter (Q2 2013) there were more than 900 Million activated Android phones, while adding more than 1.5 Million every day. With the devices above, Google will be able to pass a Billion users within a few months - and keep in mind that 2/3rds of the world's population, or 5 Billion people, are not yet connected to the internet. Google recently created Project Loop to help connect the world through internet, and was followed by FaceBook.
Users on Google's Android system also use their other services like YouTube, adding to Google's more than $10 Billion in service revenue last quarter. Google is not only expanding their services for existing customers, but are also adding even more.
Google is also going into the television and streaming space, offering shows and programs with YouTube. They are also considering offering sports programs, and have recently reached out to the NFL. They have nearly 1 Billion android users, and a pre-established base for their programs. DirecTV (DTV) is paying $1 Billion a year for NFL rights, while charging $45 - $60 a month for their 20 Million users. Google can charge just $1 a month for each of their 1 Billion users and make roughly $11 Billion on $12 Billion in revenue (as part of a streaming package which could come with Android - this is hypothetical as not everyone would sign-up).
Google is not a search engine, but a new way of life. Through multiple new ventures and services, Google and Android are able to capture even more users, connecting their lives like never before. The likes of Google have never been seen before, but the impact that it will have will last for decades.