Alphabet Shares Fall 4 Percent as Samsung Mulls Replacing Google With Bing as Default Search on Its Devices
Alphabet Inc.’s shares fell four percent on Monday after Samsung announced its intentions to replace Google as the default search engine on its devices with Microsoft’s Bing. The news of the potential shift from Google to Bing comes at a time when Google and Samsung have become increasingly competitive. This article provides an overview of the details and implications of the announcement and its affect on Alphabet shares.
1. Alphabet Shares Fall Following Samsung Rumors
Alphabet (NASDAQ:GOOGL) share prices have fallen sharply due to a number of factors, chief among them being rumors of an impending Samsung buyout of the company. The rumoured buyout has caused concern for investors due to the high cost of the offer, which is estimated to be more than $100 billion. Here are some points to consider:
- Samsung is a major player in the global electronics market, with a strong financial position and an expansive customer base in many countries.
- The two companies have already collaborated several times in the past, most notably on projects such as the development of the Google Play store.
- Alphabet has been a pioneer in the fields of search and artificial intelligence, and it is entirely possible that a Samsung buyout could leverage these strengths.
- A Samsung buyout would give Alphabet a chance to further expand its reach and further solidify its position as a major player in the technology industry.
However, the Samsung rumors are just that – rumors – and Alphabet’s share price has been volatile due to other factors, with analysts attributing the recent drop to a combination of company-specific news and broader market conditions. Alphabet shares have been trading in a range between $1,098 and $1,238 since the beginning of the year; and with markets currently unstable due to Covid-19 it is likely that this range will remain unchanged until stability returns.
2. Samsung Considering Replacing Google With Bing
Rumor has it that Samsung, one of the world’s leading mobile companies, is considering replacing Google products with Bing, Microsoft’s search engine, as its primary search provider. This move, if implemented, is likely to introduce a huge change in the smartphone landscape by influencing the way people use their devices.
This is mainly due to the strength of mobile search market, which Google currently owns – its solid foothold in the mobile industry has been long-established. This means that a move like this by Samsung could significantly impact the way people use their devices and the mobile search market.
- Advantages for Samsung
- Able to offer a competitively differentiating search function from trusted and established brand
- Potential to increase user spending and loyalty by offering exclusive deals and discounts to users via Bing
- Limitations
- Bing presently has meager market share making it difficult to compete with Google’s dominance in mobile search
- Requires strategic investments in marketing, advertising, and development to increase user acceptance of Bing
This discussion raises many questions as to whether Samsung will embrace this strategic move or not. Regardless, it’s sure to set a precedent for other mobile companies looking to increase their competitiveness in the space.
3. Potential Impact of Switching Default Search Engines
Choice of Default Search Engine Drives User Experience
The choice of the default search engine used in web browsers impacts the user online experience as it will affect:
- The search results presented
- The accessibility of useful information
- The ability of brands to reach potential customers
A better default search engine for users would enable them to find the most accurate and meaningful search results, find the accessibility to reliable information and services, and enable brands to better market their products and services online.
On the other hand, when the wrong default search engine is used, users will be faced with inaccurate, untrustworthy, and possibly malicious search results. Similarly, brands may have a hard time reaching their respective target markets, thereby hampering the development of their products and services.
Thus, great consideration should be taken into account when selecting and switching the default search engine to ensure users have the best online experience while ensuring brands and businesses have an effective platform to promote their products and services.
4. What Investors Should Know About Alphabet Shares
Alphabet Inc. is the parent company of Google, and its stock is a great way to gain exposure to the tech giant. A key factor that investors should be aware of is that Alphabet shares trade under two different tickers: GOOGL and GOOG.
Alphabet shares are your average S&P 500 stocks and come with many of the standard features. They are largely held by mutual funds, ETFs and individual retail investors. They can be bought and sold on major U.S. exchanges during market hours and they offer the potential of capital gains. The big difference is that GOOGL has voting rights and GOOG does not. GOOGL shares are listed on the NASDAQ, while GOOG shares are listed on the NYSE.
- GOOGL: Voting rights included
- GOOG: No voting rights
- Exchange: GOOGL shares are listed on the NASDAQ, while GOOG shares are listed on the NYSE.
As competitors continue to enter the market, Alphabet shares may continue to come under pressure. While Alphabet has faced various challenges these past few months, its strong fundamentals may yet help it overcome such adversities. Nevertheless, only time will tell if its current downtrend is just the beginning of a more significant decline in its stock.
