Google experienced an 11% rise in revenues to $17.7bn in the second quarter on 2015 in comparison to the same quarter in 2014. The company’s market value increased by $60bn as Google shares rose to an all-time high.
The announcement of the second quarter financials show that the largest internet information provider is still growing. The company is now valued at $471.5bn meaning it is the world’s second most valuable company behind Apple which is by far and away the most valuable company at $745bn.
Google’s share prices had increased by 3.5% during trading hours and by a further 7.5% in after-market trading. This resulted in co-founders Larry Page and Sergey Brin each making an approximate $4bn profit in one day.
Q2 was the first quarter under new Finance Chief Ruth Porat who joined the company in May 2015. She released a statement which emphasised the importance of ad growth on mobile and YouTube as the main contributors to the better-than-expected second quarter financials. Using data collected from 10 different countries, it was found that more people are using their mobile devices for internet searches than a PC. YouTube’s average viewing time also increased by over 40 minutes during Q2, which is an increase of over 50% in comparison to second quarter of 2014.
The announcement of the positive second quarter financial results for Google may be surprising to some especially given the sharp rise in competition to which Google is facing. Microsoft launched Bing, a new internet information provider in 2009 which was anticipated to be a fierce rival to Google. However, in 2014 the comScore Explicit Core Search Share Report found that Google had a market share of 67.3%, whereas Bing had a 19.4% market share. In their official published 2013 financial statement, Bing reported a loss of $1.3bn in comparison to Google making a profit of $12.9bn in the same period.
On the other hand, despite having the largest market share for internet search queries, Google seems to be lagging behind in the market for product searches. It may not be natural to associate Amazon as a natural competitor for Google, but in the technology industry a competitive threat can arise from anywhere. Almost a third of people looking to purchase a product last year started to search on Amazon, which is almost twice the number of people who went straight to Google. This shift in online product searches could lead people to believe that Google may not be the monopoly that its market share suggests.
The reality is that people have choices with regards to internet information provision, and they are using them all the time. Google operates in a competitive environment, which is changing constantly. New competitors will continually arise in the future as technology evolves. History has shown that many great companies have been surpassed swiftly, as Google did to AOL when it became established. But for now Google remains a powerhouse in the technology industry, and the world’s second largest company shows no sign of slowing down.