What does Alphabet do better than Google

What Google makes so much money on

If someone wants to look up something, the location of a restaurant or the name of the capital of Honduras, then it is common to “google” the matter. When a brand or company stands for a whole set of products or an activity with its product, this is called “deonyms”. The same thing happens when someone asks for a Zewa or a Pritt pen.

If you have a question, almost every internet user uses the search engine Google. Experts estimate that Google processes at least 64,000 search queries per second. But with what income exactly did the company, which is only present as a search engine for many, become the most valuable company by brand value in 2017 with $ 245.58 billion?

First and foremost, Google makes its money through advertising revenue. In the first quarter of 2018, Google had a turnover of 26.6 billion dollars in this area, only 4.3 billion come from other areas such as hardware sales, app sales and others.

The use of the search engine and other Internet services from Google are free of charge for its users, and yet these users are the key to Google's high turnover. Because they watch the advertising that Google places for advertising partners.

Placing ads is expensive - and all the more profitable for Google

Such advertisements can basically be placed by anyone who wants to advertise something. If you want your ad to appear on a specific search term such as 'television', bid on the relevant search term. If you get the bid, your own ad appears when the user enters 'television' in the Google search engine.

The more popular a search term, the greater both the competition with other interested parties and the number of clicks by the users. The costs can vary greatly depending on the search term. But you can imagine how much money can be generated by numerous companies competing for the same advertising terms.

Personalized advertising through Google's data collection

For companies, on the other hand, Google ads are particularly attractive because Google can use its various services to place very targeted, personalized advertising, which in turn is more successful than conventional advertising.

The division, which Google simply titled "Others" in addition to advertising income and not explained in detail, should include income from a wide variety of areas: The Google Playstore, the sale of hardware such as smartphones or Google Home systems, as well as license income should only include one give a few examples.

In order to counteract the declining value of clicks on ads, Google is also constantly developing new technical solutions, which, however, are largely kept secret. However, it is becoming clear that Google is trying to make itself future-proof through additional pillars.

Google became a subsidiary of Alphabet Inc. in 2015.

This multi-billion dollar and successful company is unquestionably attractive to investors. However, one has to understand how Google is structured and what the American holding company Alphabet Inc. is all about in this context.

Google was founded by computer scientists Lary Page and Sergey Brin in September 1998 as "Google Inc." and went public in 2004.

In 2015, Google decided that the company should subordinate itself to Alphabet Holding and is now more of its subsidiary. In addition to Google, Alphabet also includes a number of other corporations, including Waymo, which develops self-driving cars, and Calico, which deals with biotechnology and genetic engineering.

The holding company was created in order to improve the business areas of Google and to be able to better link them with the progress of the other companies. Larry Page and Sergey Brin have risen to the top of the alphabet as CEO and President of Google. Sundar Pichai has risen to the top of the still existing Google LLC.

The existing Google shares were automatically converted into Alphabet shares at a ratio of 1: 1. They are also listed under their old names in the S&P 500 and on the US stock exchange Nasdaq.

What the ABC has to do with Google shares

Anyone who researches Google shares now will discover that there are several different shares that investors can purchase.

First of all, the A-share has to be named, which can be found under the abbreviation GOOGLE. Such a share gives its buyer voting rights, whereas buying a C-share, which is listed under the name Demokratie, only acquires company shares. In addition, there are also the B shares, which have the abbreviation 353364Z, and even have ten times the voting rights, but are not listed on the stock exchange.

According to experts, the reason for this division is the fear of the bosses Page and Brin that they will gradually lose their power to shareholders because they used A shares until the introduction of the C share, for example as payment for employees. By now also being able to issue C shares, their voting share in the company is not reduced any further, since, as already said, the C shares have no voting rights.

Both the A-share, which has been in existence for some time, and the C-share, which was introduced in 2014, are both steadily increasing in value. For investors, Google and thus Alphabet will remain an exciting topic in the future, and it will be worthwhile to have their new and future-oriented projects on the screen.

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