Alphabet, Inc.'s GOOGL GOOG Google search completes 25 years of launch on Wednesday, Sept. 27, 2023. Underlining the importance of the search business, which goes by the name Google Search, the company was named Google from its inception till August 2018, when it was rechristened as Alphabet.
Modest Beginning: BackRub, a research project of Stanford Ph.D. students Larry Page and Sergey Brin, was Google's precursor. BackRub, which the duo built from their dorm room, was a search engine that used links to determine the importance of individual pages on the World Wide Web.
Scott Hassan, who did not stay with the company for long, is also credited for substantial contributions in the form of coding for the original Google Search engine.
The co-founders registered the domain name Google.com on Sept. 15, 1997, and a year later, impressed with their work, Sun co-founder Andy Bechtolsheim wrote them a check for $100,000.
The company was incorporated in September 1998 and it initially functioned from former YouTube CEO Susan Wozniack's garage in suburban Menlo Park, California.
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The Public Listing: Google was taken public in August 2004 and the company chose the unconventional route of Dutch auction for its initial public offering. The IPO was finally priced at $85 amid the negative sentiment that prevailed in the aftermath of the dot-com bubble.
Google is not a dividend payer and it has split its shares twice, once in April 2014 in a ratio of 2:1, and the second time in July 2022 in a ratio of 20:1.
Search – Bread & Butter Business: The Alphabet umbrella has diversified businesses under its fold but Search is the major revenue earner. In 2022, the search engine fetched 56% of the company's total revenue. Google services, including search, YouTube ads, and Google network contributed about 89% of revenue.
Alphabet also has revenue contributions from Google Cloud and “Other Bets” businesses.
Despite Microsoft Corp. MSFT revving up its Bing search business by integrating with OpenAI's ChatGPT, Google is still the dominant player in the search business. Data from Statcounter show that Google Search has a dominant 91.8% share compared to Bing's 3.02% share in August 2023.
Analysts estimate that Alphabet paid a whopping $15 billion to Apple in 2021 to remain the default search engine in iOS devices, which emphasizes the importance of the search business. This is an annual recurring payment.
Alphabet Class C shares rose 0.53% to $129.24 in premarket trading on Wednesday, according to Benzinga Pro data.
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