The second investment I ever made was probably the luckiest. It was March 9, 2009 -- the nadir of the stock market's past decade. Still being a newbie, I stuck to what I knew, and there were few companies I used and loved more than Google (NASDAQ:GOOG)(NASDAQ:GOOGL). I put $300 ($150 now, adjusted for splits) into Google stock, and have enjoyed a 260% return since.
But there's something I know now that I didn't know then: Google has the perfect trifecta of a huge moat and stable business, multiple opportunities ahead, and visionary leadership. Put these three together and you'll see why I plan on making Google stock one of my top three holdings in 2015 -- even after its great rise of the past five years.
The core: search and ads
I shouldn't have to convince anyone of Google's dominance in the global search market.
According to alexa.com, Google.com is the most visited site not only in the United States, but on Earth. The average user visits the page 18 times per day, spending 17 minutes on it. More important, each search by each user enables the company to collect data that is of immense value to advertisers.
The dollars that come from those ads make up just a shade below 90% of Google's revenue. And while many worried that ads displayed on mobile devices -- which historically fetch less than ads on desktop computers -- would create a drag on ad revenue, that simply hasn't happened.
For those keeping track at home, that's a steady 20% increase every year. With only $0.28 of every advertising dollar being spent on digital ads in 2014, I don't expect that growth trend to slow anytime soon. eMarketer expects digital ads to rake in over $0.37 on the advertising dollar by 2018.
The bonus: innovation and multiple opportunities
Alongside the search and advertising cash cow, the company's innovation could supercharge Google stock returns.
In the past, Google employees were given "20% time." In essence, this was one day every week during which employees were allowed to tinker on any Google-related pet projects they wanted -- with very few restrictions. From this 20% time came Gmail, Google Maps, and a host of other popular products.
There is some debate as to whether 20% time still exists at the company, but even if it doesn't, a new project is taking the lead on innovation. It's called Google[x], and is headed by company co-founder Sergey Brin.
Fast Company described Google[x] as "the search giant's intensely private innovation lab, which is devoted to finding unusual solutions to huge global problems." What kind of solutions and problems?
According to Fast Company, four have already entered the final stages before commercialization: driverless cars, Google Glass, high-altitude Wi-Fi balloons, and glucose-monitoring contact lenses. One more was added to the list a few months back: a pill with nanoparticles that could detect deadly disease earlier.
Among the ideas that have been tried or discussed, but tabled: hoverboards, space elevators, and even teleportation.
Management knows that if only one or two projects come out of Google[x] every 10 years that have a huge effect, it would still be a big win for both Google, and humanity. As a shareholder, I want to be part of such a creative team, and have no doubt that, eventually, such a big hit will surface.
Management: best in the business
As you can tell, I'm a big believer in everything Google has going. None of that would be possible if its leaders -- co-founders Larry Page (now CEO) and Brin -- weren't at the helm. They have perfected search, and are now embracing a culture open to failure in pursuit of big wins.
Both men are just 41 years young, and I could see them at the helm for two to three decades.
Currently, shares are trading for 21 times non-GAAP earnings, only a shade above the S&P 500's average of 20 times earnings. I consider that a very fair price for such a dominant player that still has a long runway for growth. Whether that means the stock will take off in 2015 specifically, or over a longer time frame, I can't say for sure.
But as a long-term investor, I will rest easy at night knowing that an even larger percentage of my portfolio is entrusted to these two, as well as the thousands working for them on creative solutions for the world.
Brian Stoffel owns shares of Google (A shares) and Google (C shares). The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.