Google (GOOG) made several interesting announcements this week. And after the pessimism that pervaded after disappointing earnings, Google stock investors should be thrilled by the potential of these gadgets.
The lineup of products is as deep as it is impressive: a new Android 4.3 OS for smartphones, the Chromecast device for video streaming (among other things) and a new Nexus 7 tablet.
All of these have launched to considerable buzz, and the Chromecast debut was so impressive that a trial Netflix (NFLX) subscription bundled with the product has been cancelled — presumably because GOOG doesn’t need the marketing bump from the partnership now that the devices is already popping up on third-partY sites like eBay (EBAY) for a big premium over the initial $35 pricetag Google asked in its Play store.
This is mighty encouraging TO Google investors for two reasons. The first, obviously, is the buzz that comes with a launch like this. It’s an opportunity to get Google stock noticed and get the GOOG brand exposure in the media.
The second, however, is the important mission behind these devices to branch into hardware and mobile. Since Google stock lives and dies on online advertising, for the most part, this diverse revenue stream is crucial to the success and growth of GOOG.
Chromecast, which streams audio from Pandora (P) and video from Netflix among other things, has nothing to do with AdWords; it’s a way to disrupt the TV scene and build on the already impressive YouTube brand.
And of course, Android is always improving as a way to partner up with other folks in mobile like Samsung (SSNLF) to get even bigger reach for the dominant smartphone OS — and presumably use that platform to build the Google empire even more.
Google stock investors should be thrilled. Since Google’s “other revenues” line continues to grow every year, it’s increasingly important to not get stuck into thinking this is just an online advertising company. Yes, GOOG may not see material benefit in the next month from these products… but if you are interested in Google stock long term, these three launches are very important pieces in the puzzle.
Google stock is up 25% year-to-date even after a brief decline after earnings. That may signal a buying opportunity for investors looking to ride GOOG in the years ahead on the strength of these devices — and not just its admittedly soft online advertising business.
- Details on Google earnings. (MarketWatch)
- Chromecast and Netflix pairing is killed. (CNET)
- Google is one of 5 expensive stocks worth every penny. (InvestorPlace.com)
- How Google and Apple are killing cable TV. (The Slant)
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.