The second most popular stock among billionaire hedge fund managers is Google Inc. (GOOG). Google is a company that finds itself in transition from being a pure software company into a combination of software and hardware. Earlier this year, the company announced a deal to purchase Motorola Mobility, which could help it become an even stronger player in the smartphone and tablet market. When Google decided to enter the mobile market, it did so by bankrolling the Android operating system, which has since become the most popular operating system on the market. There is one small problem though, Google does not make any money from Android. It is an open source operating system, so Google does not make money off phones that run the system. That is not to say that it does not profit from Android’s success. Most users of Android phones download free apps, and these apps come with Google ads. Google is able to make money from placing ads on the free apps, but even so the profit is not that material to its overall business. Google is trying to break into the hardware side of things with the acquisition of Motorola Mobility. Motorola has struggled to keep pace in the smartphone market over recent years, so joining forces with Google could be a major win for both companies. Google has tried unsuccessfully in the past to make its own hardware, so acquiring Motorola should allow it to get into the hardware side of things by using Motorola’s long history of knowledge in the hardware side of things. Earlier this month Motorola unveiled a trio of new phones, its first since being acquired by Google. The new phones will be a major test for the company, and if successful both companies could see big gains in the years ahead. The stock recently hit an all time high, and is up 16% so far in 2012.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.