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1 Huge Buy Signal for Would-Be Google Investors

Two months after Foolish colleague Evan Niu predicted that Google's (Nasdaq: GOOG  ) Chrome would unseat Microsoft's (Nasdaq: MSFT  ) Internet Explorer as the top dog among browsers, it's happened. New data from StatCounter shows Chrome with a 32.76% share versus 31.94% for IE.

Words can't fully describe what this means:

See the pattern here? Not only is IE losing share -- and rapidly -- but other browsers are also on a fast track to nowhere, including Apple's (Nasdaq: AAPL  ) Safari. Think about that for a second. Even as the Mac has defied a slowdown in the global PC market, Chrome has risen in popularity. The implication? Mac users are using Chrome at least as much as (or perhaps even more than) Apple's native browser.

And that's what makes Chrome's rise so interesting -- a buy signal, even. Safari is a good browser. It's fast, it's as secure as peers, and it does a terrific job of rendering video. Why would any Mac user choose Chrome? Because Google's browser is always going to be better at running the code that makes Google's various apps function.

I'm talking specifically about Gmail, Calendar, and the various piece parts of the Google Apps suite that has proved popular among corporate and government clients. Recent wins include drugmaker Roche and the U.S. Department of the Interior. More than 4 million businesses are using the Google-y suite for business as of this writing.

To my mind, there's little doubt where Google is headed with Chrome. The Big G wants its search engine and browser to be our on-ramp to the Web, with apps accounting for an increasing amount of our usage, adding still more information to the world's richest account of our lives on the Web. It's an archive that dwarfs even Facebook (NYSE: FB  ) , and it's worth buying at current prices. And although some observers think Facebook represents Google's greatest threat, our senior technology analyst thinks he's identified one better way to play the social-media boom. He details exactly why the smart money's heading elsewhere in the massive growth sector in our new research report, which you can access in our new research report.

Think I'm wrong? Do you find Google too volatile a stock for your portfolio? Fair enough. There are plenty more options for safe growth, including these nine rock-solid dividend payers.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Microsoft, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (3) | Recommend This Article (11)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 21, 2012, at 9:38 PM, TaviRider wrote:

    So... how does having a successful business and stock have anything to do with the browser market share?

    The search engine dominance is connected to revenue because that's how you serve targeted ads. But Chrome has no ads of its own. So even if Chrome had 100% market share, why would that be a buy signal for Google?

    Even Microsoft couldn't turn a profit from IE without doing illegal bundling with its operating system. I don't see Google going down that road.

  • Report this Comment On May 22, 2012, at 12:00 AM, OmegaSD wrote:


    I think the answer to your question is summed-up in the following comment from the article:

    "Why would any Mac user choose Chrome? Because Google's browser is always going to be better at running the code that makes Google's various apps function."

    That may seem flimsy at first glance, but it's a long-term view. The above comment, if true (I'm long GOOG, so I believe so), points to "stickiness." The point is, over time, people will come to appreciate the seamless-ness between Google Apps and the Google browser, which will cause increased adoption of the browser and increased usage of the's a symbiotic relationship. And people are creatures of momentum, it may take a bit for the above to happen, but once it does, it'll be hard to stop, and hard to switch away from. I think the chart above shows that the switch away from IE has been happening for a while, and once people get on one browser going forward, possibly Chrome, it'll be hard to stop, at least for many years. That will increase adoption of the apps, which, though free, generate ad revenue.

    You're welcome to disagree with the premise, but I just wanted to clarify what the premise of the article was, which I personally agree with.

  • Report this Comment On May 22, 2012, at 1:30 AM, normcf wrote:

    Being able to target ads is important, but preventing a microsoft browser monopoly, where microsoft could cripple, or slow, every competing technology, was the first reason. This is another reason google continues to support firefox. The ads are a bonus for google.

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