Editor’s note: This article was first published in February 2014; the market capitalisations and Google share price it cites are from then, before the 2014 and 2022 stock splits. Its predictions did not come true: Apple, not Google, was the first US company to pass a trillion dollars in market value, in 2018.
The 3 biggest companies by market capitalisation right now would be Apple ($484 billion), Google ($401 billion) and the oil company Exxon Mobil ($399 billion). Together, the 3 are valued at more than 1 trillion euros.
Although Google’s shares may seem expensive at $1,195 per share, the truth is that this price could double in 5 years. In fact, if there is one company today capable of breaking the historic barrier of a trillion dollars in market capitalisation, that company is Google, a company that is in a key position to dominate the world. Over time, if the folks in Mountain View keep up their particular brand of innovation and diversification, revenue from internet advertising could end up being just a small part of the company’s total revenue.
No other company in the world right now has a monopoly on internet services and revenue that, in turn, gives it the cash to acquire key companies.
What today we see as an internet search engine plus hundreds of free and premium services, which make this company one of the most profitable in history (not just in information technology), will in time become a company whose main revenue comes from physical products and services that have nothing to do with its main source of income today.
When it comes to diversification, Google has something the rest of the companies don’t: the ability to spot trends in users’ tastes even before they happen, thanks to the algorithms built into its search engine. That gives it a competitive edge in having reliable market research, or at least in gauging interest in a particular market.
In 10 years, Google’s shares could top $3,500 per share.
This scenario is not crazy at all, considering the acquisitions and investments Google is making in all kinds of fields, from renewable energy to its own broadband, not to mention that the future of online payments could pass through its hands. The idea that one day Google might provide financial services and become a financial institution is not far-fetched at all.
Google could also play a very important role in the cars of the future, in the devices of the future (smartphones, PCs, glasses…) and in all kinds of products we can’t even imagine right now. We recently learned of Google’s latest alliance with Foxconn to develop robots that will replace humans in factories.
Google’s stock market performance has been exemplary, with a steady, stable rise and zero volatility. Nothing suggests this will change in the long term. Yes, Google will dominate the world in a few years.
Further reading
Featured image: Steve Jurvetson, CC BY 2.0, via Flickr.
