Private Investor: Never mind what the analysts said: Google's a hit

It's a funny old game, fame. Almost everyone in the land has heard of Abi Titmuss, for example, the ultimate example of someone who is famous just for being famous. But I bet only a fraction of that number know who on earth Sergey Brin and Larry Page are.

It's a funny old game, fame. Almost everyone in the land has heard of Abi Titmuss, for example, the ultimate example of someone who is famous just for being famous. But I bet only a fraction of that number know who on earth Sergey Brin and Larry Page are.

Well, if you don't know - and I didn't before I started looking into it a bit more - Sergey and Larry are the co-founders of Google, which you will also almost certainly have heard of. Interestingly, and just to prove my point, you will find that if you put "Sergey Brin" and "Larry Page" into Google you get 102,000 hits; "Abi Titmuss" gets 131,000. Prophets not even recognised properly by their own search engine, it appears.

Still "Tim Berners-Lee", the inventor of the world wide web, will register 666,000 results: the sort of number that makes the conspiracy theorists excited.

Anyway, Sergey and Larry founded Google less than a decade ago, but it seems so much a part of people's everyday lives that it is difficult to imagine a world where it didn't exist. Actually, I can remember when everyone used Yahoo! and Lycos and AltaVista, and their dominance at that time seemed to be just as much entrenched.

Like Hoover, Google has turned from a trade name into an everyday verb and noun. Unlike Hoover, it is more than a generic name: it represents a monopoly. You might say you were Hoovering the lounge if you were using an Electrolux or a Dyson, but you wouldn't say you'd "Googled" something if you'd put it through Ask Jeeves, say.

For those who thought Google was some sort of flash in the worldwide pan, the results announced by the company last week should be adequate answer.

Google outdid the army of analysts who follow it and predict its financial results. The company was able to announce that first-quarter sales had nearly doubled, and quarterly profits rose six-fold. Revenues in the three months to 31 March rose to $1.26bn (£660m) compared with $652m in the same period last year. Net income increased to $369m from $64m last time. Who said you can't make money out of the internet?

And all the advertising seems to be both effective from the point of view of the companies who place it and unobtrusive to those who use and trust Google as a supplier of data. A remarkable trick to pull off, but it seems the advertisers want more: Google is now proposing to give advertisers more influence in where their ads are shown, how much they pay for them and what they look like. Advertisers will bid to show ads on certain sites, but they will have no veto over what content happens to turn up on a web page when the ad is shown. It's a compromise I hope will satisfy everyone.

For now, though, things are going swimmingly. I bought Google shares earlier this year, and they're already ahead 10 per cent in sterling terms and at an all-time high; $220, against their $45 float last August.

My reasoning is that Google has two good stories attached to it. First, there's the short- to medium-term weakness of the dollar, which means that we on this side of the Atlantic can cash in and buy quality American equities on the cheap. Eventually, when the US economy rights itself and the dollar regains its poise, that will put a useful bit of boost into the returns.

Second, there is that terrific secular growth story. The beauty about a share like Google in an industry such as information technology in this stage of its development is that even the smartest analysts and experts can get things very badly wrong, in a way that they don't even manage to do with more established, slightly easier-to-read sectors such as retail or resources. If you have a hunch that something like Google is going to do even better than the markets reckon, there's as good a chance that you'll be right as they will be. With the help of research using Google, even I managed to prove that.

s.o'grady@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

    Reach Volunteering: Trustees with Finance, Fundraising and IT skills

    Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

    Day In a Page

    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones
    Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

    Why are we addicted to theme parks?

    Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
    Tourism in Iran: The country will soon be opening up again after years of isolation

    Iran is opening up again to tourists

    After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
    10 best PS4 games

    10 best PS4 games

    Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
    Transfer window: Ten things we learnt

    Ten things we learnt from the transfer window

    Record-breaking spending shows FFP restraint no longer applies
    Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

    ‘Can we really just turn away?’

    Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
    Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

    Nine of Syria and Iraq's 10 world heritage sites are in danger...

    ... and not just because of Isis vandalism
    Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

    Girl on a Plane

    An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    Why Frederick Forsyth's spying days could spell disaster for today's journalists

    The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent