Has Google Peaked?

Technologically and Financially, Google is Rolling Along. 2013 was a banner year among banner years for Google. In terms of stock price, it had a roughly 50 percent increase. For long-term investors, this is a good sign of even better things to come. However, for day-traders, it might also be a time to cash in. Both observations would be true.

Day Traders and Long-Term Investors

There is one major difference between day-traders and long-term investors. Historically, day-traders are one-day millionaires, and no real day-trader has stepped up and confessed to becoming a billionaire because of the trades. Besides, for a day -rader, a one-year fifty percent increase is nothing. They would not have noticed it and would not have jumped in at the start of the year. They would have gone in at some point and sold a week later.

Long-term investors, however, would have looked at the company’s financials, smiled at the growth during the past year, and then put in some more cash to shore up their holdings. They know that Google is there for long-term and that there is a lot more growth where that came from.

A Contrarian View

Share price indicators show that Google has reached its peak but nobody is selling. The records show that even with the price adjusting from 1160 levels to 1120, there is still enough momentum to break the psychological 1200 level. Realistically, Google will break 1200 by mid-February. A closer inspection of the trends shows that Google has not been affected that much by the economy. There are only a few established companies where the share price has shown resilience against any downward influence from the economy, whether national or global. Google is one of those companies.

The company has innovated against trends. They have offered alternatives to well-established technology and software. After Yahoo won the search engine wars, Google came out of nowhere and clawed its way up to prominence based on a blank search page. The Google search page still maintains one of the smallest footprints for a major website. With the same minimalist approach, they have become one of the biggest free email providers as well as the leading major player for free cloud services with Google Drive (formerly Google Docs).

No Need to Advertise

Nowadays, there are still changes on the Google search algorithms. Google implemented Hummingbird without any fanfare. This is so unlike the old Google where algorithm changes were announced before they were introduced into use. It has been called the biggest major change since even before Panda and Penguin. These pair of changes disrupted the way a lot of internet marketers did business. The latest change is expected to bring a lot more. By the way Hummingbird works in the real world, it seems that this is only the second act in a four-part play. It puts more focused search in the hands of the users. It also makes for better search results which would benefit local businesses.

The core business of Google is search. This is where their ad revenues come from. The way things are going, Hummingbird is expected to be a bigger revenue generator than Google’s other technologies, which include Android, Google Drive, and Google Glass, among other things.