Innovations Aside, Google Is Still Google

Unlike many of its competitors, Google's (NASDAQ: GOOGL  ) innovations go well beyond a new, slightly tweaked version of an existing smartphone or tablet. While Apple (NASDAQ: AAPL  ) once held the unofficial title as king of the innovators, but those days are long gone. Apple's refusal to push the envelope opened the door, and Google was more than happy to step in.

Even Nokia (NYSE: NOK  ) is attempting something new, as evidenced by its (high-end) Lumia 1520 and (low-cost) Lumia 1320 phablets. Though hardly in the same league as Google, at least Nokia is trying, and with explosive growth expected in larger-screen smartphones, Nokia's phablets could turn out to be major winners. Apple? Still nothing more than the usual phablet rumors.

In a class by itself
When Google first introduced Project Loon -- its effort to bring Wi-Fi connectivity to the masses using what amounts to weather balloons -- it seemed over-the-top, even for Google. The secretive floating barges, self-driving cars, and the use of white space to get users in Africa online seem tame by comparison to those odd-looking balloons. But that's what innovators do: push the boundaries.

On the face of it, Google's new Moto G hardly ranks with its other cutting-edge innovations; it's just another smartphone, right? But at $179 for an 8 GB unit or $199 for a 16 GB version, the Moto G could change the way users buy smartphones. That's because those prices are for an unlocked, no-contract unit for a legitimate smartphone. Mobile carriers aren't going to be fans, of course, since they love locking consumers into those two-year deals; that strategy limits customer churn with the hefty early termination fees and also solidifies revenue streams.

While Nokia offers lower-end phones and has enjoyed success with its Asha lineup and Lumia 520, particularly overseas, Apple's CEO Tim Cook has said more than once he has no interest in playing in low-cost mobile sandbox. As with most things, Google is willing and able to go where others won't (or can't) tread. And when it comes to its new Moto G, it can afford to sell it on the cheap because -- just as with Google's world-dominating Android OS -- both drive revenues into its primary business.

At the core, Google is still Google
Google, at the core, remains what it's always been: an advertising-revenue-generating machine. Of its $14.89 billion in revenue last quarter, $12.54 billion -- equal to about 85% of Google's total in Q3 -- came from advertising.

And Google's advertising revenue continues to grow, both sequentially and year over year. Last quarter's results were 4% higher than 2013's Q2, and a 15% improvement over the year-ago quarter. What's feeding all that growth? Android OS phone users (which accounted for 81% of all smartphones sold last quarter according to IDC), and others using Google's search engine. Search is what started it all at Google, and it remains the undisputed leader.

According to data-analytics provider comScore, there were 19.34 billion searches conducted in the month of October, up from 18.65 billion in September. Of all those searches, 66.9% were done using Google search. Microsoft was a distant second in search last month, with 18.1%, a slight 0.1% improvement from September, followed by Yahoo! in third with 11.1% share of the search market. It should be noted that Yahoo's shift to becoming content-driven site has negatively affected its use as a pure search-engine tool, which is just what CEO Marissa Mayer wants.

Final Foolish thoughts
There's a reason Google's stock price busted through the $1,000-a-share ceiling last month, and it wasn't some futuristic innovation. As fun as it is to discuss Google's balloons and cars, they're not driving Google's incredible growth: At least, not yet. When you peel away the layers, Google's still Google, and that's why it remains one of the best long-term growth investments opportunities in the world.

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