Tomahawk, WI 10/21/2013 (BasicsMedia) – Google Inc (NASDAQ:GOOG) released its latest quarterly financial reports for 2013 and the consensus is that they were better than expected. As proof of just how valuable this stock is, one needs to look at the company’s current shares, which trade at more than $1,000. The greatness of GOOG as a global tech company is not in doubt. This company still has a great future and its decision to continue investing in new or diverse areas indicates that the company is not at great risk financially going forward. What are the risks with its latest financial results?

Google Inc Not at Great Risk from Competitors

I strongly believe that GOOG is not at great risk from the competition. The company has worked hard to insulate itself from the rest of its competitors.  The only company I think has the capacity to compete with GOOG on a global scale is Facebook Inc, although its stock is way behind GOOG’s in terms of value. Google Inc is the world’s largest brand, having overthrown Coca Cola from the first position it had occupied for close to 14 years. It is much older in the tech world compared to Facebook Inc; having just celebrated its 15th year compared to the latter’s five.

Google Inc’s Profit Margins on the Decline

If you take a keen look at GOOG’s latest financials, you will discover one worrying trend; the company’s profit margins are on the decline. I attribute this trend to the fact that Google Inc has undertaken intense diversification and the fruits will not be visible for quiet some time. The company is investing in areas that no one would ever have associated with GOOG in the past. The company relies heavily on revenue it obtains from advertising. Currently, this is not enough to support the hundreds of projects GOOG has come up with, and it needs to raise more money.

Google Inc Loses Lots of Money on Diversification

Not all the projects GOOG has put up are to help it raise revenue or profits. Some of them are purely for brand promotion and do not play a direct role in raising revenue or profits. While GOOG’s revenue from cost per click on computers is still impressive, it has been unable to replicate the same results where mobile advertisement is concerned. GOOG is in direct competition with other companies which I think will become quite good at raising money from advertisements on various forums, including mobile ads. It has to prove its worth here as well.

There is no doubt that GOOG still enjoys the best ratings where the Internet is concerned. It currently controls the Internet advertising field, which is one of the most lucrative businesses on the Internet. My only concern is that if it does not look for other ways of raising funds to support the other projects it has put up, I think it will continue reporting declining profit margins going forward. GOOG also enjoys financial stability, which is not something you can say about other companies. I do not expect the current GOOG share prices to remain on the same level for long.

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