Brief analysis on Alphabet (Google)

Most of us know that Alphabet is a great stock. But few really know how they make money.

Below is brief explaination of how Alphabet generates revenue and why it is a great stock.

The bulk of the reason is that it is much more advantageous to advertise online using Google compared to print advertising.

Here are the reasons why:

1. Mobility
Not everyone buy a newspaper to read nowadays. But most people are browsing internet using their smart phone, iPad or laptop everyday. Hence your online advertisement will reach a bigger group of audience.

2. Global reach
By marketing your products and services in your newspaper, it will only reach readers in the country. But by marketing your products and services online, your advertisement can reach a global audience.

Google's advertising app allows advertisers to select the country that they would like the advertisement to appear in. For example in Google app, you can specify Singapore, Malaysia and Indonesia as your target countries.

3. Keywords specific to reach Target audience
Online adverising allows advertiser to pick keywords that are specifc to their business. For example a private bank advertising online will be using keywords like "private bank", "investment solutions", "portfolio construction". So the ad will only reach readers who search for such keywords. Hence your ad will reach your target audience.

4. Cost effective
Marketing online is cheaper than traditional advertising. For example a black & white full page ad on newspaper will cost around $21,700 for 1 day. Whether the readers are reading your ad, you will still pay $21,700.

In Google advertising, you only pay when readers click on your online ad. When somebody clicks on your ad, they are trying get access to your website. That person is truly interested in your product & services. That person may not buy anything from you now, but he is aware and will be monitoring your website for next few days or months.

This system is call pay per click. Cost is as low as $260 per month.

This is the link for Google advertising app if you want to find out more:
https://adwords.google.com/home/