Monday, October 03, 2005

Official Google Blog: Putting crowd wisdom to work

Google continues to look at ways to make the wisdom of the crowd work. Free markets work.

Right now, politician after politician has a plan to "correct the market"; how dumb. The collective wisdom of the market is smarter than any politician. Ideas such as windfall profits taxes or price controls do not work, except to temporarily win a few brownie points for politicians. In the long run, socialistic manipulation of markets lead to gross inefficiencies.

Markets are by no means perfect. Yesterday, Google dropped several dollars in price. It appears that the drop was disappointment over the Google press release. Investors have been waiting with baited breath to know how Google will spend several billion dollars. My belief is that the big annoucement will be the letting of a multibillion dollar contract to build-out a nationwide high speed fiberoptic broadband network.

LU Lucent and NT Nortel have both traded up in recent days. I would not be surprised if one of these companies benefits from the build-out. JNPR,the Juniper Network may also get a piece of the action. (GLW)Corning has traded down recently after a supper strong run.

Yesterdays announcement lopped a few billion off the market cap of Google. The company plans to build a million square feet of office space. I don't have a clue about the cost of space in silicon valley but it it is 100 per square foot, the cost will only be 100 million. Just a tiny piece of the spending Google is prepared to do.

Again, markets are relatively efficient. Burton Malkiel thinks they are very efficient. Warren Buffet and others disprove the EMH theory. Google is studying and using market based concepts to distribute information to the public as efficently as possible. Go Google Go.

A family member just did another Google Gulp! He watched Everybody Hates Chris, the UPN show that is being streamed by Google. He says he sees how the zillion channel TV is going to work. When Google builds out its network, the cost of streaming shows to you will be virtually nill and the revenues to Google will be huge! BUY THE BULL! Short term sentiment may take this market down a knotch but the expansion phase of the economic cycle is underway!

Other links for Google TV:
The Gadget Spy
buy google
Postronik's World
Science and Tech
Today's Top OpinionGordon's Tech