Thursday, October 06, 2005

John Battelle's Searchblog

John Battelle's Searchblog:

John posted the following release from Google.

Google Inc. (NASDAQ: GOOG) today announced the official launch of Google Local, merging the technologies behind Google Local and Google Maps. No longer in beta in the U.S. and Canada, users can visit Google to find local search and mapping information in one place.

'With today's launch of Google Local, users will be able to go to one
location to find all the local and mapping information they need,'said
Marissa Mayer, director, Consumer Web Products, Google Inc. 'Whether it's directions to the nearest pharmacy or reviews of nearby dim sum restaurants, we will continue to develop innovative technologies that enrich our users' lives.'"

My Take:

Local search has great potential to drive huge revenues. Being able to find the closest products at the best price quickly is a powerful tool to reduce ones costs. The power is enough to drive the inflation rate down. The potential is enough to suggest that WIFI internet, telephone and IPTV will all be free to consumers in return for the ability to capture marketing revenues.

In coming years, I expect historians to write about how the bond market conundrum of 2005 was eventually explained by the markets sniffing out of the futures savings via Google Maps combined with Google Local!

While talking to church friends tonight, I found it extremely difficult to relay the magnitude of the changes brought by always available wireless computing power. The simple questions might be the most beneficial. Questions such as, "Google, what time is it?" or "Google , is it going to rain today?" or "Google , how many minutes will it take me to walk to the library?" or "Google , how far to the nearest chicken fast food?" will be asked and answered often. A bible study group might ask, "What did Paul think about baptism?". A student studying history might ask, "Which Supreme Court Justice was the most controversial?"

Voice recognition and response has been anticipated for many years. Much of what Google is bringing forth is a function of being at the right place at the right time. Many of the Google innovations were not possible a few years ago because of cost of hardware, software and transmission or even because of the existance of the broadband web.

The pieces are coming together. At the Web 2.0 conference, hosted by John Battelle, Yahoo's chief talked at length about how Google is number 4 as a portal. AOL continues to make strides to convert to the "open" portal system. The thing to remember is that Google is much more than a portal. Google has the GoogleNet. The GoogleNet is preparing to deliver hundreds of new or remodeled products and services to billions of consumers.

As an investor, I am most confident that CAL, AMR and LCC will double in value and double again in a few years. These stocks are extremely cheap relative to Google, in particular on a price to sales comparison. On the other hand, even as a large company, Google still has the potential to compound revenues again and again and again in the next several years.

Google is taking the fight to Microsoft. To some extent, that means Google is in a major fight with INTC and DELL to name just a couple of the companies that depend on the "fat" computer model. Google is taking the fight to VZ, SBC, CMCSA and all the other telephone and cable companies. Google is actually trying to work with these folks but the "gales of creative distruction" are blowing up a major storm. Who will need a "fat" computer loaded with "super fat software" if one can pick up a low priced AMD notebook and "do it all".

Ninety percent of the owners use less than 10% of their computing power. Why should anyone buy machine gun to go rabbit hunting?

Google Maps are superb. Google local is excellent and improving. The mashup of the two is a significant enhancement. I simply do not see the energy flowing out of MSFT, YAHOO or AOL like that flowing from Google. Google is going to change your life and mine for the better. The productivity growth of the whole world is going to be strong. Productivity and wealth creation are synominous.

Last night on Kudlow and Company, one guest quoted power statistics that explain another major conundrum. The numbers were of the following magnitued; consumers have been forced to spend millons of extra dollars on fuel in the past couple of years, however, consumers total income during those years was 5 times as great as the increase in fuel costs. As Papa John used to say, "Times is Good". He knew his grammer was not the best but he also knew that America is a country of growth and innovation. Google is leading the way.