Google announced its Project Loon on June 14, which is a plan to send balloons into the stratosphere that can facilitate Internet in rural areas, even on mountaintops. That means that if you are climbing Mt. Everest and need to call your mom to let her know you are still alive, you can. But before you start planning your trip to the Himalayas, it could be awhile before Google Inc (NASDAQ:GOOG) launches. The company reported that it intends to test 50 balloons in Christchurch, New Zealand, to see if they can provide an Internet connection from the sky.
Why this device would make Google even richer
Two reasons come to mind about why this move is good for Google Inc (NASDAQ:GOOG) and, therefore, its shareholders. First, providing Internet access to the hinterlands will trigger a whole new stream of revenue for the company. The balloons floating in the stratosphere that the company is using will need to be paid for, and so Google will charge Internet providers a fee for facilitating customer access to the Internet. Second, this raises the level of cool that Google Inc (NASDAQ:GOOG) has and, with it, promotes the company to the public. In the circle of massive technology companies, cool carries a lot of weight. The more the kids like it, the more they will beg their parents to buy it. And maybe those parents will also jump on the bandwagon.
If you don’t believe me
Look at Microsoft Corporation (NASDAQ:MSFT). Apple was constantly attacking the lack of coolness of that company. Most of the attack was facilitated by actor Justin Long in the PC versus Mac commercials. Long represented a Mac, and a less hip dude represented a PC. Since becoming uncool, Microsoft Corporation (NASDAQ:MSFT) has lost a huge amount of market share to Apple. The company’s profit margin fell last year; in 2012, it was at nearly $17 billion, but was over $23 billion a year earlier, representing a 26% decrease.
Apple Inc. (NASDAQ:AAPL), on the other hand, appears to have injected its annual revenue with growth hormones. From 2009 to 2012, revenue increased by 265%, and drove profits up by 306%. It is clear between these two companies which one is coming out on top.
As if the prospect of Project Loon isn’t enough, Google Inc (NASDAQ:GOOG) is also taking its revenue and profits to the stratosphere. From 2009 to 2012, revenue increased by 112% and net profits went up by 60%.