The world of internet businesses is set to change dramatically over the next year. With Facebook, the second most visited website in the world, due to finally go public and immediately become one of the largest companies in the world, the landscape of internet companies looks to make a fundamental shift. But how will the most visited website and world's biggest internet company Google (GOOG) respond to this? Beginning in 2012, Google has begun a fundamental shift in its approach to business that is geared towards getting its users to spend more time on the site and draw greater profits from them while they're there.
The combination of the two shows that Google, already flush with users, is looking to generate more revenue by capitalizing on its existing user base rather than by expanding it, something that appears more than sensible based on Google's current popularity. What's more, it represents a shift towards increasing Google's penetration into the everyday life of its users.
Competition on Multiple Fronts
Google's most recent moves appear to show that Google is better positioning itself for a long-term battle with Facebook. But it's worth noting that Google appears to be a major rival to two of the most visible brands in the world. Google is battling for dominance of the internet with Facebook, but it's also at odds with Apple (AAPL) in the growing market for internet television systems and technology devices.
While Germany twice famously erred by waging a war on two fronts, it's not as certain that Google is making a similar mistake. Android phones don't appear to be passing the iPhone in popularity at any point in the near future, and the odds of Google+ passing Facebook as the social networking site of choice seems equally unlikely. However, by keeping its fingers firmly ensconced in both pies means that Google is not so heavily reliant on either source of revenue. What's more, Google's ability to compete in both spaces is buoyed by its visibility online and through the ad revenues that it generates.
A Changing Landscape
While the rapidly changing business landscape should be in flux for the foreseeable future, Google doesn't appear to be letting itself grow stagnate.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer