Essay about Google Analysis

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Google, Inc. Overview Google is a global technology leader, focused on improving the ways people connect with information. Through innovations in web search and advertising, Google is now a top Internet destination and possesses one of the most recognized brands in the world. Available to anyone with an Internet connection, Google maintains the world’s largest online index of web sites and other content. Revenue is generated by delivering relevant, cost-effective online advertising. Businesses use the Google AdWords program to promote their products and services with targeted advertising. Furthermore, Google maintains advertising on thousands of third-party web sites using the Google Network and Google AdSense. While Google…show more content…
While these costs have been rising relative to sales, the company believes that its future success will be a result of its increased knowledge in effectively and efficiently generating traffic. As illustrated in Exhibit 6, quarterly revenues increased significantly throughout 2004, while traffic acquisition costs as a percentage of revenues began to decline. In addition, the financial statements demonstrate that liquidity remains strong. The horizontal balance sheet illustrates that cash and cash equivalents rose 639% over the three-year period beginning with fiscal year 2002. Furthermore, short-term investments increased 1839% over the same period. These measures are important for a variety of reasons. As Google attempts to become the front-runner in the web search and online advertising industries, it is beginning to face considerable litigation regarding its advertising policy. Paris courts recently reached a decision surrounding this issue and luxury goods maker Louis Vuitton. Secondly, as the marketplace witnesses the current success and growth of Google, it is inherent that more competitors will emerge. These companies may draw interest in terms of acquisition from Google, potentially complementing current operations. Strong liquidity will allow the company to handle the presence of lawsuits and the ability to fund such acquisitions without the need for additional capital through debt or equity financing. Financial Ratios The company providing financial

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