Normally, when the holiday season approaches, you expect retail companies to do well. This time, however, you might also want to take a look at Alphabet Inc (NASDAQ:GOOG), the parent company of Google. Why? Because Google just gave a major redesign to its “Google Shopping” service, aiming to take some serious market share from its rival companies such as Amazon.com, Inc. (NASDAQ: AMZN), and is also getting into the mortgage business. These new sources of growth could bring the former Google stock’s price even higher.
Google Shopping in the Holiday Season
With the holidays coming up, online shopping platforms are getting ready. In the past, Amazon.com has been the dominant player in the e-commerce business. This time, however, Google could give Amazon a serious run for its money.
Given that mobile search has been trending upward, Google Shopping is receiving a major update to cater to the growing interest in mobile shopping. According to Google, the share of smartphone online shopping purchases increased 64% over the last year. Right now, nearly 30% of all online purchases are occurring on mobile phones.
One of the features in Google’s redesign is a new interface that looks more like a mobile app than a web page. When browsing through search results, users can view multiple products without having to reload new web pages.
The updated Google Shopping tool can also help shoppers narrow down their options, because “shoppers often don’t know the exact product they’re interested in.” According to Google data, 40% of online shopping searches are made on broad terms, rather than specific products. The redesigned Google Shopping site helps to narrow down relevant search options and groups the results by attributes, such as brand, price, and features, for better browsing. (Source: “Google Helps You Shop Between Holiday Cooking and Tree Trimming,” Google AdWords, November 19, 2015.)
To give another incentive for consumers to head to Google Shopping for their holiday gift purchases, the company is launching next-day delivery for shoppers located throughout Southern California, including Los Angeles, San Diego, Orange County, the Inland Empire, and other areas. In the past, the service was only available in Northern California, West Los Angeles, Manhattan, Boston, Chicago, Washington, and several states in the Midwest. Some of the participating merchants include Costco, Target, and Walgreens.
Speaking of online shopping, why not get your mortgage online too? As it turns out, Google is also trying to help you find the best mortgage. In a blog post on Monday, Google announced the addition of mortgages to “Google Compare.” The service is now available in California with more states to follow. (Source: “Introducing Google Compare for U.S. Mortgages,” Google AdWords, November 23, 2015.)
The search engine giant said that “Buying a home is a major financial decision—so when it comes to getting a mortgage, people want an easy way to understand and compare their options online.” The company believed that there is still a lot to be done, because “nearly one-in-two borrowers still don’t shop around for their mortgage and often feel like they don’t have enough information to make an educated choice.” (Source: Ibid.)
Google’s new mortgage comparison service would help lenders connect with the tech-savvy generation who enjoy shopping online. Moreover, Google Compare allows lenders to participate on a flexible cost-per-lead (CPL) model, which could bring more revenue for the search engine behemoth.
The Bottom Line on GOOG Stock
Mind you, putting aside the prospects of Google Shopping and the company’s new mortgage comparison business, GOOG stock is still a solid option with great growth prospects. In the third quarter of 2015, Google’s total advertising revenue grew by 13% year-over-year. Top-line success also translated to the bottom line, with adjusted earnings per share (EPS) at $7.35, beating analyst estimates of $7.21. (Source: “Alphabet Announces Third Quarter 2015 Results of Google,” Alphabet Inc, last accessed November 24, 2015.)
Add this all up and you get quite a bullish picture on GOOG stock’s price.