Searching for the real identity of Google; It is the world’s top brand but it is hard to say exactly what it does, writes Izabella Kaminska

May 23, 2014 7:09 pm

Searching for the real identity of Google

By Izabella KaminskaAuthor alerts

It is the world’s top brand but it is hard to say exactly what it does, writes Izabella Kaminska

‘Google has bounced back as the most valuable global brand . . . Apple has slipped down to second place.’

Financial Times, May 21

But it’s a shame that the world’s most valuable brand is so hard to define.

How do you mean?

Well, think about it. What exactly is Google really?

An internet search and data company?

But that has never been how it makes money. People don’t pay to search on Google, they pay to advertise on its pages. I think of it as the world’s best-positioned billboard.

Sure, but search is still its core brand value. You don’t, after all, Apple yourself.

True. But you might soon be Glassing or googling to work in one of its self-driving cars. We’re already Gmailing, YouTubing and Google hanging-out. The company is definitely more than just a search engine.

OK, so Google has expanded into different businesses. Isn’t that a good thing?

Maybe. But conglomeration can have odd side-effects, especially on branding. After all, you’re more likely to have heard of Persil than of Unilever. Besides, the really interesting thing is that Google is venturing into much more than just products and social media.

Like what?

The list is long and varied. Its venture capital arm alone has invested in more than 189 companies including Uber, a taxi app, and Kensho, a financial analytics firm.

How does it afford all that?

Company filings show it has nearly $60bn of cash on its balance sheet – at least $30bn of which is offshore and will have to be spent on foreign acquisitions if Google is to avoid taking an accounting charge in the US.

So you’re saying it’s become a self-funded financier?

More like one of the world’s biggest corporate wealth funds.

What do people think it will buy next?

Hard to say. Its investments have been diverse. Google aspires to be involved in almost anything innovative, from robotics and weather insurance to genetics and satellites. Recent acquisitions include Boston Dynamics, the maker of creepily lifelike robots. It has also snapped up Nest Labs, the maker of smart thermostats and smoke alarms, for $2.5bn, having said it wanted to get into advertising on refrigerators, car dashboards, watches and thermostats.

Isn’t there a lot of risk with this sort of venture investing?

Yes – which is probably why Google also invests in more conventional financial assets such as government bonds. That said, it’s getting more exotic in this department too.

How do you mean?

In 2010 Google started a trading operation in order to manage its cash pile better. Its headquarters in Mountain View, California, now boast a bank-style trading floor.

What does Google know about trading?

Judging by the fact that it poached a lot of its traders directly from Wall Street, probably not that much.

Are the trading operations still going on?

Yes, if you go by current job ads for a stock analyst in London. There are also adverts for people who know about capital markets and foreign exchange, among other things, to work in Mountain View.

Is there anything Google isn’t involved in then?

Let’s just say that there’s probably a reason why the US National Security Agency depends on Google’s co-operation to get its data. The company really is becoming akin to an all-encompassing information mega-god.

One that not only sees and hears everything, but also never forgets!

Indeed. Though the European Court of Justice restricted some of that ability when it ruled this month that Europeans should have the right to request Google to block search-engine results and, in that sense, to be forgotten on the internet.

But what if Google and it’s self-driving killer robot army fleet doesn’t comply?

You joke. But the funny thing is that Larry Page, Google chief executive, has expressed a desire to set aside a part of the world for completely unregulated and ungoverned experimentation.

Cripes, the sovereign state of Google? Imagine that. At least we should be thankful that their corporate slogan is “don’t be evil” no?

Here’s a creepier thought. What if Hitchhiker’s Guide to the Galaxy wasn’t wrong that a number was the ultimate answer to life, the universe and everything?

What, 42?

No, a googol.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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