Google’s ubiquity seems to qualify it as less of “a search engine” and more so “the search engine.” Its cultural imprint runs so deep that “Google” has become a verb, and many people use it as their default browser page. With a share of the global search engine market that comes out to about 92%, according to Statcounter, the fact that Google is an important part of the daily lives of most people can’t be understated. GOBankingRates googled some figures on Alphabet, Google’s parent company, to see what this importance means for investors.
Alphabet announced its fourth-quarter results for 2021 on Feb. 1, beating Wall Street revenue and profit expectations. The company generated revenues of about $75.3 billion, based on record sales of Pixel as well as YouTube’s strength, growth in the Google Cloud division and robust advertising growth despite changes to privacy settings in Apple’s iOS 14 that affected ad revenue on some online platforms.
|Google: Company Snapshot|
|Headquarters||Mountain View, California|
|Founders||Sergey Brin, Larry Page|
How Much Is Google Worth Now?
The price of GOOG, Alphabet’s Class C shares, is $2,682.60 as of Feb. 11, giving Google’s parent company a current market capitalization of $1.7742 trillion. In addition to its Class C shares, there are also shares of GOOGL, Alphabet’s Class A common stock. Both types of shares are currently trading at relatively similar prices.
|What is Google Worth|
|Alphabet (GOOG) Share Price, 52-Week Range||$2,002.02-$3,042.00|
|Fourth-Quarter 2021 Revenue||$75.33 billion|
|Shareholders’ Equity||$251.64 billion|
What Is Market Capitalization?
Market capitalization is one of several metrics investors use to gauge how much a company is worth. The market cap is the value of all of the company’s stock combined, giving you a sense of what value investors are placing on the company based on the price it is trading at. The figure can change as much as the share price does since it’s calculated by multiplying the number of outstanding shares by the current trading price.
Although Alphabet shares were recently at a 52-week high of $3,042, the company is susceptible to market volatility, perhaps as a result of competing with tech giants like Apple or Amazon. Alphabet’s share price was $2,002.02 at its 52-week low. Swings in share price have, in turn, caused its market cap to vary widely over the same period. At its current share price of $2,682.60, Google has a market capitalization of $1.774 trillion.
What Is Google’s Net Worth?
Google’s net worth can be calculated by subtracting the company’s liabilities from its assets. Shareholders’ equity, which likewise equals total assets minus total liabilities, is essentially a company’s net worth. Alphabet’s total shareholders’ equity as of the quarter ending Dec. 31, 2021, was $251.64 billion.
Google was founded in 1998 by Larry Page and Sergey Brin. The two met at Stanford in 1995 and collaborated on a search engine called Backrub. Google is a play on the word “googol,” which is a one followed by 100 zeros. The name was a great summary of Page and Brin’s mission “to organize the world’s information and make it universally accessible and useful.”
Forbes named Page and Brin among the top 10 on its list of the world’s richest billionaires, with net worths of $114 billion and $109.8 billion, respectively, as of Feb. 12.
Key Product Lines Contributing to Revenue
Alphabet’s fourth-quarter 2021 earnings report highlighted several categories that contributed to its success. The following operating segments, as described in the earnings report, are responsible for its revenue:
- Google Services: Google Services includes ads, Google Search, Google Maps, Google Play and YouTube as well as hardware, and it’s the segment responsible for the lion’s share of Google’s revenue. It generates revenue from advertising, app sales and in-app purchases, digital content, hardware and subscription fees. YouTube ad revenue is an important component and was up over 25% in the fourth quarter of 2021 compared to the same quarter of 2020. Also of note is the fact that Pixel phone sales broke a quarterly record. Revenue from Google Services overall was up over 31%
- Google Cloud: Google Cloud is comprised of Google’s infrastructure and platform services. It generates income from Google Cloud Platform and Google Workplace tools and enterprise services. Revenue for this segment grew over 44% in Q4 2021 compared to Q4 2020.
- Other Bets: Other Bets combines various operating segments that don’t stand on their own in terms of revenue. Most Other Best revenue comes from the sale of health technology and internet services. This segment saw a 7.65% decline in revenue compared to Q4 2020.
“In 2022, we’ll stay focused on evolving our knowledge and information products, including Search, Maps and YouTube, to be even more helpful. Investments in AI will be key, and we’ll continue to make improvements to conversational interfaces like the Assistant,” Alphabet CEO Sundar Pichai said in the company’s Feb. 1 earnings call.
Alphabet’s Top 10 Shareholders
GOOGL has a high level of institutional ownership at 79.30%. The top 10 shareholders of Alphabet’s Class A stock are:
|Shareholder||Percentage of Shares|
|The Vanguard Group Inc.||7.64%|
|BlackRock Fund Advisors||4.37%|
|Fidelity Management & Research Co. LLC||4.15%|
|SSgA Funds Management Inc.||3.69%|
|T. Rowe Price Associates Inc.||2.44%|
|Geode Capital Management LLC||1.77%|
|Wellington Management Co. LLP||1.46%|
|Capital Research & Management Co.||1.25%|
|Northern Trust Investments Inc.||1.22%|
|Massachusetts Financial Services Co.||0.94%|
Is Google Worth the Money?
Alphabet has outperformed other FAANG stocks like Facebook and Netflix over the past year. Based on five analysts, Alphabet is a “buy” to “strong buy,” with an average price target of $3,506.11, according to Yahoo Finance. Alphabet’s current share price of $2,682.60 leaves plenty of room for growth. Based on historical share appreciation, impressive revenue news and future potential from investments such as YouTube and AI, Alphabet may be worth the money as a long-term investment.
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Data is accurate as of Feb. 11, 2022, unless otherwise noted, and subject to change.