Alphabet Inc: Will “Google Duo” Drive GOOG Stock?

GOOG StockGoogle Duo Could Be a Catalyst for Google Stock

On August 16, Alphabet Inc. (NASDAQ:GOOG), better known as Google, announced the imminent launch of its new mobile app for video calls. It’s now here and it’s called “Google Duo.” But can it drive Google stock higher?

After taking aim at the Apple Inc. (NASDAQ:AAPL) “iOS” and its limited storage capacity, Google has launched Google Duo. Users who want a simple-to-use alternative to video chat apps such as “Skype” or Apple’s “FaceTime,” can already download it from the Google Play store.

By itself, Google Duo will not contribute much to Google stock. But, combined with the success of its other apps—and Duo is certainly not going to be the last—Google stock will certainly stay around the all-time highs reached in the past few weeks. Then again, Google wants Duo to be the fastest video calling app in the market.

Google Duo: It’s All About Simplicity

If Duo proves to be as easy and reliable to use in practice as it presents itself on paper, it could be a massive success. All users can install Google Duo on their smartphone. They simply indicate their phone number on the app and enter the security code they get in an SMS. Then they get access to a clear and easy-to-use interface. Everything is free. It sounds as exciting as “Skype” was when it first came out over a decade ago. Oh, just to be clear: Duo can be downloaded on “Android” as well as iOS devices.

Like Skype, Duo also challenges messaging applications such as “WhatsApp” and “Facebook Messenger.” To promote its new application, Google has stressed the image quality of the video with Duo. It also features a charming and original feature: a “Knock Knock” sound, which advises users about an incoming call, complete with a video preview, before they answer. Does Duo have what it takes to overthrow its older rivals?

Read: Google Stock: Alphabet Inc Delivers Reality Check to iPhone Users

WhatsApp, which allows users to send text messages and hold video conversations, can already boast over a billion users. Skype, which like Duo can be used as easily on mobile device as on a computer, claims to have retained over 300 million users. Therefore, Duo has some tough numbers to overcome if it’s going to make a dent. But, it has some advantages.

Duo will clearly target the Android phone user. There are more smartphones worldwide running Android—related to Google—than iOS or “Windows.” So, on compatibility alone, Google’s Duo has huge potential. Indeed, as Nick Fox, Google’s communications division VP, said, the idea is maximum simplicity. (Source: Google’s new video-chatting app is finally here, but the best feature doesn’t work for iPhone users, Business Insider, Aug.16, 2016.)

Google Has Other Calling Apps: Why Duo?

Google already has a video-chat app called “Google Hangouts.” Google Duo aims to be simpler and offer decent quality even when the reception is not very good. Duo has deliberately avoided edgy features. (Source: Ibid.) Therefore, it seems that Google is not really aiming to compete against Skype or FaceTime at all. Duo seems more like an effort to develop something entirely new.

“It’s simple, therefore I am” seems to be its philosophy. More than that, Duo marks the latest salvo to push Google deeper into the social media market, where it’s lagging behind other Silicon Valley giants. Duo is a cheap way to catch up to its competitors in a growing market and take advantage of the possibly successful application to expand its reputation and audience. So, Google Duo could ultimately be an important tool to push Google stock higher.

Google came late to the social media party. It has yet to really establish itself as a reference in the field of mobile communications, despite the popularity of Android hardware. Between “Google Voice,” Hangouts, and “Google+,” its strategy for new forms of communication and social media has not yet defined itself. Hangouts, its video conferencing platform, already offers a similar service to Duo. But many users were turned off by the need to use an associated Google e-mail address. The simple use of a phone number does admittedly make using Duo much easier.

Bottom Line for Google Stock

Google seems less focused now on the monetization aspect of Duo and more on getting user numbers up. But Duo shows Google’s determination to get this social media thing right. If Duo proves to be a hit, it could boost Google’s social media potential, eventually reflecting in a higher valuation for GOOG stock.