A decade after its launch, Google has overtaken General Electric as the world’s most valuable brand. The marque is worth $66.4-billion (U.S.), according to a study by global market researcher company Millward Brown Optimor. Its study calculates the value of brands based on their ability to drive profits and their growth prospects.
"It’s been coming for a while, if you look at the growth in stock market value relative to all the other technology companies out there," said Alan Middleton, a marketing professor at York University’s Schulich School of Business.
Google ranks ahead of technology rivals Microsoft (No. 3), IBM (9), Apple (16) and Yahoo (42). But the list also places Google – a brand so famous that it was added as a verb in the New Oxford American Dictionary – ahead of some of the world’s most storied brands, including Coca-Cola (No. 4), McDonald’s (11) and American Express (19).
Eileen Campbell, chief executive officer of Millward Brown, said Google Inc.’s brand growth was driven largely by its rise in profit. The search engine’s first-quarter profit, posted last week, was up 69 per cent year over year. She said Google – which was No. 7 on last year’s ranking – could have a long reign at the top of the list. "I certainly wouldn’t count them out to grow just as much next year," she said.
Google’s rise to the top is remarkable for a company begun in 1996 as a research project in a college dorm room. The domain name Google.com was first registered on Sept. 14, 1997. The company was incorporated in a garage a year later.
"The speed of growth of some of these companies in the Internet world is certainly a lot quicker than in the past," Mr. Middleton said. "But the potential vulnerability of these is also much higher."
While awareness of the Google brand grew quickly, the company’s profitability came more recently.
Mountain View, Calif.-based Google makes most of its money by serving up paid links to people who use its search engine, but the company is also expanding into other areas. It paid $1.76-billion last year to buy online video site YouTube Inc. And Google has partnered with newspapers, radio and television stations to broker advertising in other media.
"Google is a technology brand that – until recently – was almost universally loved," Ms. Campbell said.
She said that as Google expands into new areas, the company must worry for the first time about not being seen as the next Microsoft Corp. Redmond, Wash.-based Microsoft gained a reputation in the late nineties as a corporate bully because of its near monopoly in the market for personal computer operating systems.
Google has about a 50-per-cent share of the U.S. online search market. Its market share is even higher in Canada.
"People are starting to worry that Google can go into new areas unimpeded because they’ve got such a big war chest," Ms. Campbell said.
While U.S. brands account for about half of the most-valuable-brand list, a growing number of international brands now appear in the top 100. A Canadian brand (Royal Bank of Canada) made the list for the first time, at No. 39. China Mobile (No. 5) appeared for the second time, along with new additions including Bank of China (No. 38) and China Construction Bank (No. 61).
Millward Brown Optimor defines brand value as the sum of all profits a brand is expected to generate. The calculation applies a multiple of brand growth potential to an estimate of how much of a company’s intangible profit comes from the brand.
Via The Globe & Mail