The Juggernaut in Tech: Google Inc (GOOG), Microsoft Corporation (MSFT), Apple Inc. (AAPL)

Advertising revenue

Google’s business is advertising and the emergence of mobile devices brings opportunities and problems. Looking at advertising, in Q4, Google’s CPC continued its decline, declining by 6% year over year. However, Paid Clicks increased by 24% year over year and 9% sequentially.

Furthermore, in Q3, Paid Clicks increased 33% year over year and 6% sequentially. While the amount of revenue Google makes per click in mobile is less than on desktop, Google is able to compensate with higher volume. Mobile device users have access to the internet almost everywhere they go. This means more internet browsing and more opportunities to display ads for Google.

In addition, Android’s dominance drives users to Google. As was previously stated, Google’s search dominance in mobile is greater than on desktop. Overall, Google should continue its growth despite the difficulties in mobile advertising.

The bottom line

Google is dominant and none of its competitors are really a threat to its dominance. Android is the king of mobile devices and the Google search engine is the king of search engines. At the time of this writing, Google is trading at a PE of about 24.7. However, Google has a tangible book value per diluted share of about $160.

Taking into account the tangible book value, Google has a PE of about 19.4. While this is not a cheap valuation, Google has a lot of potential. The company is in the middle of the mobile device revolution and the internet. Overall, Google has plenty of ways to grow profits and this valuation is a fair price to pay for the juggernaut known as Google.

The article The Juggernaut in Tech originally appeared on Fool.com and is written by Alvin Gonzales.

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