Will Google Inc (GOOG) Follow Apple Inc. (AAPL)’s Swan Dive?

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Trying to out-Apple the crew from Cupertino
One of the most promising areas of growth for Google that is not getting much coverage is the growth in app revenue. The company was able to grow revenue from the segment more than sixfold from mobile apps in 2012. While Apple still is the market leader, despite the nearly 70% global market share enjoyed by Android, Google is gaining ground. Apple app revenue was reported at $333 million per month for the second half of 2012. App Annie projected that this is still 3.5 times the revenue that Google is receiving.

Google’s global reach has seen a heightened interest from developers that are looking to reach new markets. Furthermore, App Annie’s vice president of marketing, Oliver Lo, notes: “Both platforms are very healthy. More and more publishers are going cross-platform than a year ago.” The shift to a cross-platform model is benefiting Microsoft Corporation (NASDAQ:MSFT) as well.

Particularly as the software giant pushes to become a force in the smartphone and tablet markets, the importance of building out a full ecosystem cannot be stressed enough. Still with iOS boasting 800,000 apps and Android 700,000, Microsoft has a ways to go. I still remain of the belief that the most important core apps are generally available across platforms, but that big number still pulls headlines.

The way forward
Initial signs suggest that Google has a broad enough foundation that it need not follow Apple’s fall from grace and implode from here. I remain bullish on Apple — particularly at these depressed levels — but prefer Google’s market position. There is a solid chance that Google will need a slight correction in order to climb significantly higher, but I do not see the same double-digit slide that Apple shareholders have endured. While the immediate term is subject to some volatility, Google remains a buy for the medium and longer terms.

The article Will Google Follow Apple’s Swan Dive? originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.

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