Sometimes I feel like I could write a daily blog about Google. Things move that quickly and while a lot of this stuff has limited impact on the short term revenues and earnings, I do still think they do matter when trying to determine Google’s (GOOG) longer term value. Why? Because even if one of these long shots (self-driving cars, Google glasses, Google fiber, same-day shopping, etc) turns out to be a game changer (as in multiple billion dollar business), Google’s value would be significantly impacted.
Google’s Retail Aspirations
Last week, I wrote a post on SeekingAlpha where I heavily criticized Google’s idea to compete with Amazon, eBay and others in the same day shipping segment. I said Google should instead focus on physical retail stores (i.e. similar to Apple stores) and Google Fiber. One week later, very interesting news as Google confirmed it was expanding its Fiber service and will be servicing Austin, Texas by mid-2014. This is fascinating. How Google is able to offer a service that is so superior to what traditional cable makers can do at a lesser price is truly amazing. I can’t tell you how excited I’d be to be in Kansas City or Austin. In many ways, Google is truly changing the way we get access to television and the internet. It’s putting a lot of pressure on AT&T and others but I have yet to see them come up with a viable answer. That being said, Google is moving slowly on this front and it will be interesting to see how this evolves over time.
As a consumer, I’d obviously love to see Google start to expand rapidly on Google Fiber but the tricky part is that it’s difficult to know how profitable Google Fiber is and how much it helps further its other goals (faster internet, more use of its products, Youtube progress, etc)
The major news these days concerns Android though with a few stories breaking:
-Microsoft (MSFT) and other allies have started complaining that Google is abusing its dominance of Android (they’ve already complained about abuse of search) to promote its other products. How roles have reversed as Google was making such complaints 15-20 years ago against Microsoft’s dominant Windows position. It’s unclear where such complaints could lead in addition to legal bills and decade long battles
-Facebook: I saw the following Tweet which I loved:
Think about it.. Facebook and Google have been fighting for years now over the future of the internet, how social will be used, etc. Now, Facebook is taking over a Google Android instance and building its own phone with HTC. Talk is that over time, Facebook would start replacing Android features by some of its own (including search). Can you imagine how ironic this is? I can only imagine how worrying this might be to Google execs. It’s far from certain that this phone will be a big hit.. but what if it did?
-Samsung Dissociating Itself From Google/Android: Just a few weeks ago, Samsung announced its latest S4 phone to great anticipation. One of the more surprising aspects was the fact that Samsung barely mentioned anything about Android. In fact, it seems to be launching some services, apps and other services that will compete with Google’s. In a world where Apple and Samsung are the two dominant players and the S4 is the only phone to compete with the iPhone, I have to think this is very worrying for Google.
All of that being said, let’s not kid ourselves, Android remains an incredibly valuable platform even though it does not directly generate revenues. But the past few days have certainly raised a lot of questions and I think it’s important for any who either holds Google or is considering doing so to follow all of these stories