Data Is The New King

Gaurav is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

"The most valuable commodity I know of is information." 

-Gordon Gekko (Wall Street)

In the older days, investors always looked for companies that created value. They looked for companies ranging from mobile phone manufacturers to wireless network companies. The ones that created warehouses and buildings, like Wal-Mart, the ones which were the leader in the mobile success story, like Nokia, and the wireless network providers, like Verizon, expanding their networks in one country after the other. The main focus at that time was that everything that was of value was physical in nature but as the times have changed so did the nature of value. Value has now attained a virtual status as data is the next big thing now. Companies like Yelp (NYSE: YELP), TripAdvisor (NASDAQ: TRIP), Zagat, Google (NASDAQ: GOOG) are all in existence just because of the data they have. And just like quality and physical appearances matters when it comes to physical entities, the main thing that matters in the case of data is data integrity.

So now the question takes a whole new form - Which company has the best data?  Judging from the recent patterns that the time has thrown upon us I could definitely vie for Google. Google has been the pioneer when it comes to data. It made search the way it is today and that doesn’t come from someone that cannot understand data. And the dreams are still going big for this company. As Google tries to maintain a stronghold on its position as the King of Data, it has been sort of a villain to a lot of other small companies as was evident by the market reactions when Google acquired Frommers and Zagat. TripAdvisor and Yelp stocks both took a fall as large as 10% when Google acquired Frommers and Zagat respectively.

Google is in the process of acquiring companies that value their data and have their data being covered by professional reviewers. To note here is the fact that both TripAdvisor and Yelp have been accused by business owners of engineering data and not being able to deal with fake reviews. Before being acquired by Google both Frommers and Zagat were not free- They had both built a brand value with reviews from professional reviewers with justifiable identities. With Google now aiding these offerings with the changes in its search algorithms it will not be an overstatement to say that these products can gain much larger traction. It is partly evident by the way that Google currently markets Zagat. Actually, when I searched for “Restaurants New York” on Google, it was difficult to find Yelp. With Frommers travel review guides being embroidered into Google Places, Google search, Google maps and Google+, TripAdvisor also could feel a lot of heat coming its way.

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To conclude, I would like to add that the next era is for data based businesses and to build up that sort of business it is necessary to maintain integrity of data. While Google is being criticized by many for using its search results to curb competitors and marketing its own products, the quality of Google’s search results has not deteriorated. It is only time that will tell who will come out on top but data being the new oil, I would surely place my bet on Google as it continues the process of acquiring structured data.  

gauravguru has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and TripAdvisor. Motley Fool newsletter services recommend Google and TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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