Alphabet is dominating the online search market share. The Google search engine has a staggering 80% global market share. Alphabet’s other applications like YouTube, Cloud, and Google Play have all performed quite strongly during the pandemic as well. Alphabet’s revenue during the second quarter of 2020 was down only 2%.
The ecosystem makes Alphabet one of the top advertising stocks
Alphabet has built an entire ecosystem that spans mobile operating systems, mobile app marketplaces, cloud applications, search engines, and video platforms. Such a wide-ranging ecosystem makes Alphabet an attractive proposition for advertisers and publishers. The availability of a vast number of apps and services makes Alphabet’s platforms more attractive for users, pulling in more clicks and views. Ultimately, that leads to higher revenues for the company. The presence of a large number of users also provides Alphabet with valuable customer data which can be used to optimize ad campaigns. The data effectively improves the return-on-investment for advertisers.
Technological leadership is key
Alphabet also has a strong track record for technological innovation that allows it to constantly improve user experience across all its offerings. Its search engine, for example, is widely recognized for providing accurate and relevant search results in quick time. The Google search engine handles 3 to 4 times more search requests than competitors Yahoo and Bing (owned by Microsoft).
Google Maps is widely used as the primary navigation app by many users around the world. Google has enhanced the capabilities of the Maps app with acquisitions like Waze. YouTube is one of the most popular models that content creators use to distribute new content. New product features like subscriptions have made the platform more attractive to content creators who want to monetize their work.
The mobile market
The mobile market is expanding across the world. The Android operating system is used on more than 85% of all smartphones in the world. Alphabet’s apps are used not only by Android users, but also iOS customers. Thus, the opportunities for advertising and the resulting revenues from them are bound to go up in the future. That makes Alphabet a candidate for the top digital advertising stock.