Google is huge-normous, breaks Internet traffic record

Google as a percentage of all Internet traffic

Google now has a market cap of more than $195 billion. To put that into perspective, Microsoft sits around $218 billion, while Apple is cruising along at $280. Google's growth is nothing short of impressive. Analysts are constantly calling upon investors to invest in the Mountain View based company, regardless of its staggering $617 share price.

Besides Google's impressive third quarter earnings, the company has something else it can now be proud of. According to Arbor Networks, big "G" now holds a new Internet traffic record. Since January of this year, Google has gained more than 1% of all Internet traffic. That's a fairly large increase in less than a year. The site notes that if Google were an ISP, this would make them the second largest on the planet. In the picture above, Google's all-time Internet traffic percentage is shown. On average, Google accounts for 6.4% of all Internet traffic. Taking other factors not present in the above graph into consideration, Google could actually account for as much as 8-12%.

It's no secret that Google is a monstrous force to be reckoned with (see our previous coverage regarding its server farms). What's really shocking is just how fast the company continues to grow. According to Arbor,

"Google is growing considerably faster than overall Internet volumes which are already increasing 40-45% each year."

One may wonder if any other company in the world has ever grown at such an alarming pace. Google has truly become synonymous with search. It's even become a legitimately recognized word in the English language. Even with Bing's recent growth and partnership with Yahoo, can Microsoft really compete with such a powerful force? Only time will tell.

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KSib said,
With this type of growth, I think Google will eventually have a larger market cap than Microsoft and maybe even Apple since they are invested in services such as 1Gbps FiOS now. Imagine... ~128 MB download speeds. Feels good, man.

that sentance made no sense "investing in services such as 1Gbps FiOS"? FiOS is a Verzion brand, it's just fiber optics to a GPoN at the house, now google is going to create their own network, but that isn't FiOS

Xero said,
Doubt they will surpass either. Possibly Microsoft since they are on a downward trend but Apple's revenue is growing much faster than Google's. They won't catch up if both continue their trend.

I think they will, I reckon in another 5-10 years it will be on company Google/Microsoft there is no doubt in my mind about this at all!

Xero said,
Doubt they will surpass either. Possibly Microsoft...

What?

neufuse said,

that sentance(sp) made no sense "investing in services such as 1Gbps FiOS"? FiOS is a Verzion brand, it's just fiber optics to a GPoN at the house, now google is going to create their own network, but that isn't FiOS

Oops, I mis-spoke. I meant fiber optic internet lines. D:

Xero said,
Doubt they will surpass either. Possibly Microsoft since they are on a downward trend but Apple's revenue is growing much faster than Google's. They won't catch up if both continue their trend.

Apple re-invented themselves 3yrs back with iPhone. They tried to capitalize Vista failure, but, MS back again with Win 7. Already iPhone is stagnated and infact -0.4% last Q and Android is growing fast.

MS can comeback at anytime with WP7, don't count them this early.

I feel the next decade is going to be Chromium vs Windows, i.e. GOOG vs. MSFT.

I wonder where they go from here. They are trying expand into lots of areas but kinda like Microsoft, failure more than success in new markets. The growth is impressive. I always wonder how a company can expand at that pace and still function. Must be quite a few specialists who come in and sort it out.

OceanMotion said,
I wonder where they go from here. They are trying expand into lots of areas but kinda like Microsoft, failure more than success in new markets. The growth is impressive. I always wonder how a company can expand at that pace and still function. Must be quite a few specialists who come in and sort it out.
Google has hired 10000 employees every month in last quarter.

vice le von said,
Just wait for FB to release its data.

This isn't Googles data, it's from Arbor Networks. So FB was already taken into consideration.

If Wall Street were to give a care about MSFT, that market cap creep would be erased instantly.

Seriously, the fact that MSFT (sitting at about 25 since forever) is still comparable in terms of market cap to AAPL and GOOG (priced on the order of 14x and 24x higher) is rather amazing. Beyond that, market cap is just a side effect of Wall Street goons deciding whose stock to push higher to make themselves more money. It has nothing to do with the merit of those companies.

smot said,
If Wall Street were to give a care about MSFT, that market cap creep would be erased instantly.

Seriously, the fact that MSFT (sitting at about 25 since forever) is still comparable in terms of market cap to AAPL and GOOG (priced on the order of 14x and 24x higher) is rather amazing. Beyond that, market cap is just a side effect of Wall Street goons deciding whose stock to push higher to make themselves more money. It has nothing to do with the merit of those companies.

I believe Microsoft was the first company to hit half a trillion market cap. I agree about their stock being so low and not really reflecting the worth of the company. They still make tremendous amounts of profit.

TheEnemy said,

I believe Microsoft was the first company to hit half a trillion market cap. I agree about their stock being so low and not really reflecting the worth of the company. They still make tremendous amounts of profit.

You invest for one of two reasons: growth or dividends.
[list]
[*] Growth is where you expect the value of the stock you buy today to increase in value until you sell it at some point in the future. Microsoft is not a growth stock: if you would have purchased $25,000 worth of Microsoft stock 5 years ago you'd have approximately $25,000 worth of stock today ($25.53 in 2005, $25.55 today). You can do worse than breaking even (ie: buying Fanny Mae) but unless you make roughly 2.5% per year you're losing purchasing power due to Inflation (ie: A car you could buy in 2005 with $25,000 would cost about $28,000 today, all things equal).

Apple and Google are growth stocks. If you would have plunked that same $25,000 down for either of those two in 2005 you'd have either $138,000 in the case of Apple or $45,400 in the case of Google.

[*] Dividends are the second reason for investing. This is when a company takes it's profit and cuts a check for a share of it directly to the stock holders. Microsoft dividends were raised recently to 16 cents per share per quarter but for the sake of easy math let's just use those numbers.

$25,000 would have bought approximately 1000 Microsoft shares (ignoring brokerage fees etc) 5 years ago. Over 5 years you'd get about $160 per quarter for 5 years or $3200. Look, at that: your return on investment is almost identical to the rate of inflation so your real purchasing power of $25,000 is about the same today as it would have been 5 years ago. That's good news because if you'd left your cash sitting in a typical chequing account you'd have lost purchasing power.

So in terms of pure profit: Microsoft might be top dog, but it's not really growing the way Apple or Google is and that's why their stock price (and market cap) has been fairly flat for as long as recent memory allows.

Microosft's stock reflects the value the investors think the company will return in the near to long term future: it's not growing but you can basically bank on your dividends because they have a solid couple of products with no immediate signs of meaningful competition. They're a safe investment when compared to 2005 Apple or Google.

Apple and Google's stock price reflect investors banking on those companies growing. In the case of Apple that's probably diversifying more into things like gadgets and media distribution, in the case of Google that probably has more to do with monetizing their huge empire of properties.

Smart investors will have their money split between more volatile / risky stocks (like Apple in 2005) and more stable stocks (like Microsoft). With Microsoft your money doesn't lose value but it doesn't grow particularly quickly either. With Apple your cash would have grown at an incredible rate but it was also a pretty risky proposition back in 2005 (this is pre iphone, iPods weren't really ubiquitous, Macs were still PowerPC systems, iTMS had sold less songs to date than they sell in a couple of weeks today, etc)

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