Google, Profits and Diversification

I love this video below. It works for business studies lessons at some many levels…

The story is simple. The global recession simply hasn’t dampened Google’s performance. It has announced continued growth in its core business - the display and sale of online advertising. It is generating stunning profits nearly all of which are retained and reinvested in a wide range of internal development projects and external acquisitions.

Indeed Google has made dozens of acquisitions in the last 12-18 months and it is also investing heavily in internal R&D projects with the aim of “solving the world’s problems using technology”. The savvy business student will see that Google is now much more than a search engine - it is using its massive retained profits to diversify into a wide range of seemingly unrelated industries. Will it succeed?