This Company Is a Retirement Portfolio Cornerstone


Last summer, I pledged to put at least $40,000 of my own money behind 10 stocks. My goal was to build the World's Greatest Retirement Portfolio.

So far, the results have been outstanding. The $40,000 invested has returned $8,440, while an investment in the S&P 500 would have returned only $1,080 -- an outperformance of more than 18 percentage points!

Today, I'm going to tell you why Google (NAS: GOOG) deserves a spot as the cornerstone of any retirement portfolio. I'll show you what's important to focus on for the company moving forward. At the end, I'll offer you access to a special free report that reveals the one little-known stock set to benefit from the mobile revolution.

It's all about the leadership
Recently, Google has come under fire for the restructuring of its share classes. Basically, the company will be splitting its stock and creating a third tranche of shares that have no voting rights. The company is doing this to ensure that co-founders Larry Page and Sergey Brin are able to retain voting control over Google.

This presents a precarious situation, one that requires a close examination of leadership. Luckily for me, I've already identified these two as a key reason I believe in Google. As I said in my original recommendation a year ago, "I can't help getting excited by the fact that Google's founders ... have taken over the reins." So while some may be up in arms over the situation, I'm just fine putting my money behind this leadership team.

It also doesn't hurt that since my recommendation, Google's shares have outperformed the broader market by a whopping 21%!

Lots of tentacles, but it's all about ads
When one tries to dissect what Google is all about, it can get kind of confusing. Between Gmail, YouTube, Google Chrome, and Android, you might think that the company has five or six different business models, all bringing in cash by providing different products.

Nothing could be further from the truth: All of these products are free. Google is first and foremost a search engine that gets money by providing an advertising platform. As an investor, you must remember this fact. As of last quarter, 96% of revenue came from advertisement.

Remaining at the top of the search kingdom is key -- so its good news that Microsoft's (NAS: MSFT) Bing search engine hasn't made a dent in Google's search market share.




March 2012



February 2012



January 2012



December 2011



November 2011



Source: comScore.

The company is also dominating search -- and therefore advertising -- through the use of Android and Chrome. Just this week, StatCounter announced that Chrome overtook Internet Explorer as the No. 1 Web browser in the world. That's important, because the Chrome browser naturally channels all search queries through Google's engine, thereby exposing users to Google's ads.

And when it comes to Android, things are looking fantastic. A quick look at the operating systems used by mobile devices worldwide shows that this is quickly becoming a two-horse race between Android and Apple's (NAS: AAPL) iOS.

Operating System

Q1 2011 Market Share

Q1 2012 Market Share










Research In Motion



Source: Gartner. Worldwide smartphone sales. Market share rounded to nearest whole number.

It's important, when it comes to mobile, to realize that Google usually gets paid less per ad. But that's OK, because the volume of searches with mobile is picking up, more than making up for the difference.

Geographic possibilities
The last venue to keep an eye on for Google is geographic diversity. Last quarter, 46% of revenue came from the United States, 11% from the U.K., and 43% from the rest of the world. Two of the bigger players Google has to contend with are Baidu (NAS: BIDU) , which focuses on search in China and other Asian countries, and Yandex (NAS: YNDX) , a search-engine company in Russia.

It's tough to tell how the worldwide search game will play out 10 years from now. Baidu is the most oft-visited site in China, and the fifth most in the world, according to Yandex, on the other hand, is No. 1 in Russia and in the top 10 in several former bloc countries. The good news for Google, however, is that of all the sites out there in cyberspace, it holds the No. 1 spot (You Tube, which is owned by Google, also sits at No. 3, behind Facebook).

Investing in a technological revolution
Make no mistake about it: The face of technology will be different 10 years from now. I'm confident that Google has enough going for it -- and its nimble enough -- to remain not only relevant, but dominant.

If you're looking for a play that's a little more lucrative, however, I suggest you check out our latest special free report: The Next Trillion-Dollar Revolution. Inside, you'll learn about one company poised to prosper from the mobile revolution. Get your copy of the report today, absolutely free!

At the time thisarticle was published Fool contributorBrian Stoffelowns shares of Google, Apple and Baidu. You can follow him on Twitter, where he goes byTMFStoffel. The Motley Fool owns shares of Google, Baidu, Apple, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Apple, Google, Baidu, and Microsoft, creating a bull call spread position in Apple, and creating a bull call spread position in Microsoft. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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