Google Apps is more valuable than YouTube and Gmail combined

+6.30%
Upside
152
Market
162
Trefis
GOOG: Alphabet logo
GOOG
Alphabet

We recently updated our analysis of Google to show the Google Apps business as a separate segment that amounts to slightly less than 4% of Google’s value – more than YouTube and Gmail combined.

Google Apps refers to Google’s web-based word processing, spreadsheet, email, and collaboration programs that is an alternative to the dominant Microsoft Office suite of productivity software used by businesses and consumers.

Individuals and small organizations can access many of the applications included with Google Apps for free.  However, businesses, government agencies and schools pay Google about $50 per user each year for access to a premier edition of Google Apps that includes more storage, better reliability and more administrative IT controls over user accounts.

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We estimate that there are about 20 million Google Apps users currently and that 25% of them are paying users.  We estimate Apps users will exceed 80 million with 40% of them paying users by the end of the Trefis forecast period.

In comparison, we expect Microsoft Office to sell more than 300 million business software licenses and over 70 million consumer software licenses by the end of our forecast period.

What percentage of Google’s stock do you think would be attributable to Google Apps if the number of Apps users grew to be comparable to the number of Microsoft Office business licenses sold?

A.  6%

B.  12%

C.  18%

D.  21%

Make a selection above and modify our forecast of the Number of Googls Apps Users to see the answer.