Google (NASDAQ:GOOG) is certainly not the fast-and-loose company it once was. In 2011, when Larry Page took over as CEO, he pledged to put “more wood behind fewer arrows,” and a number of creative but money-losing efforts have fallen by the wayside. The recent death of Google Reader is just one example.
At the same time, there has been a focus on the bottom line — such as Google charging small businesses for Google Apps or siccing its lawyers on a European company that offered ad-blocking software and would potentially limit GOOG revenue as a result.
That has resulted in better profits, as well as significant outperformance in the last year, with Google stock doubling the returns of the S&P 500 since April 2012.
But if you think Google has gone all corporate and boring, focusing on cutting costs, then think again. There’s a lot to be excited about in Mountain View right now beyond Google’s all-important web search and advertising business.
Google Fiber: If you’re one of the many Americans fed up with the virtual monopoly of cable internet providers, Google Fiber is a breath of fresh air. The fiber optic connection is super-fast, and your subscription comes with HDTV, a Google Nexus tablet, no data caps and more. But investors have reason to be optimistic about Google Fiber, too. Despite being a very capital-intensive effort, the project is moving into Provo, Utah, and Austin, Texas — showing that this is not just a cute local experiment. Look out, Verizon (NYSE:VZ), AT&T (NYSE:T) and Time Warner Cable (NYSE:TWC).
Google Glass: Yes, it might look dorky. And yes, only $6 million in revenue has been drummed up so far with a small-scale release limited to the developer community. But Google Glass is a sign of how outside the box Google is still willing to get, particularly in the hardware department.
Nexus, Motorola and More: And if the admittedly odd glasses don’t catch on, consider the trail Google is blazing with its line of Nexus devices — a 4-inch smartpone, a 7-inch mini-tablet and a 10-inch full-sized device. There are rumors that the coming Google I/O event in May could reveal a complete overhaul of the Nexus phone, too, turning it into a Nexus 5 — with rumors that specs that could include a 5-inch display, an amped-up quad-core chip, 3 GB of RAM and a 16-megapixel camera among other goodies, according to insider blogs. There’s also talk about an “X Phone” that will at last show off the fruits of the nearly $13 billion Motorola merger — a “breakthrough” device featuring a tough exterior and an extended-life battery. Look out, BlackBerry (NASDAQ:BBRY) and Apple (NASDAQ:AAPL).
Google+: Google has been missing the mark thus far on its social media effort, Google+. However, hard integration into other parts of the Google universe and a general sense of fatigue with Facebook (NASDAQ:FB) — a Pew survey a few months ago said 61% of users are pulling away from FB — provides potential. Whether GOOG can connect or not is a big “if,” but clearly it’s not giving up.
Talent Magnet: Even if some of its recent acquisitions and projects don’t pan out completely, Google is sucking up all the oxygen in the room when it comes to talent. And buying out smaller shops to poach top developers is a shrewd move because it keeps folks out of the hands of Silicon Valley competition. Apple used to be a sexy place to work, and Facebook was the place to get paid before it went public, but lately the bloom has faded from both roses. Where else are innovative tech minds going to go other than starting their own business … that GOOG might eventually snap up anyway?
Google stock is up 15% year-to-date in 2013, 36% in the past 12 months, and 55% in the last 24 months. I wouldn’t bet against this stock continuing a very impressive run across the next few years — or hitting a home run in one of these aforementioned areas across the next decade.
- I wrote before that Google is headed to $1,000, and I still believe it. (The Slant)
- Some great stories of Google acqui-hires and how the company remains dominant in attracting top talent. (The Verge)
- What to expect at this year’s Google I/O event. (Digital Trends)
- Eric Ravenscraft: “Google will keep up its end of the bargain by ensuring all your Glass pictures and are recordings safe, but if someone punches you in the face because you wore it to the urinal, that’s on you.” (Android Police)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.