The last decade Google Inc. (NASDAQ:GOOG) has changed the world as we know it. If we telescope our vision and sit back and just think, almost everything digital has been infiltrated by Google. And it won’t be a pompous statement when one says that it is Google that owns the future and not Apple.
Google started as a simple search engine operated from a garage 15 years ago and now it has encapsulated the whole internet. From your email account, to streaming your favorite series on YouTube, to the global instant search engine – everything leads to Google. And now the smartphones … the Google Nexus phones are a success too, which was perhaps the only missing jewel in their crown.
Google’s shares are faring better than Apple, with Apple taking a hit these days because of no new releases and a couple of other elements. A lot of investors bank on Google as compared to Apple and other companies simply because Google throughout the years has shown consistency and constant upward surge.
However, investors have urged Google management to disclose their finances to them. In the wake of the competition brewing up in the form of Amazon and other companies, the financers requested that they want Google to share some of its financial sheets with them regarding the revenue generated through YouTube.
Google Inc. bought YouTube back in 2006 for a price of $1.65 Billion which was considered overpaid back then by a lot of analysts. The request to view financial sheets was raised by YouTube itself; YouTube believed they should at least be aware of the sheets of their parent company because of the fact that at least 10 percent revenue of Google is being generated through YouTube. Google’s market capitalization stands between $26 and $40 Billion.
Brian Pitz, an investment bank analyst claimed that since YouTube’s business rises faster than that of Google itself, Google should reveal its financial matters to its investors regarding YouTube. YouTube’s annual gross is around $6 billion this year and these figures are expected to double up next year.
Amazon has recently announced the acquisition of the gaming streaming website, switch.tv, for around $970 million. YouTube was interested in the site in the past but it has fallen into the lap of Amazon, which makes Amazon a rising rival of YouTube. However, YouTube still as a spate entity is the most feared competitor and Google’s backing gives it a large edge over other companies.
The investors are concerned over the large spending on YouTube by Google over the years and their worries are genuine as many websites like Amazon are closing in and growing to be serious competitors.
Google’s take on this matter is that YouTube has been a smart buy on their part and is their most influential weapon in the market of gathering revenue. Google Inc. (NASDAQ:GOOG) justified its claims by the fact that YouTube is responsible for almost 10 percent of its earnings, which is quite large for the subsidiary. Despite this fact, YouTube management is insisting on the disclosure of the company finances to them as they believe it’s their right to make that demand.
