Google's Future Looks Even Brighter
Maxwell is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Google (NASDAQ: GOOG) remains the most popular search engine, and as a result, it always has the ability to make a significant splash in the news.
Privacy Commissioner Timothy Pilgrim has stated that Google will not face a second privacy breach inquiry. When the company collected data for the Google street-view application, it breached the privacy act. When the company was taking the images required for the app, it also managed to "accidentally" collect a number of personal text messages, emails, and internet passwords when it passed through Australia. This is a serious breach of privacy, but the company claims that it was not intentional. It is unlikely that an additional inquiry into the situation will yield any information we do not already have, so Google may escape further scrutiny in this regard. Google claims that it was a mistake, but evidence revealed that an engineer did notice the issue and warned senior management before image collection began. As Google did not actually use the data for anything-or so it claims-it seems that no further inquiries will be made.
People have been talking about Google's self-driving car. It is not the only company that has this idea though. Google may soon face significant competition in this arena from Europe, specifically from SARTRE (Safe Road Trains for the Environment). SARTRE is a joint venture between seven European companies. This coalition took a number of self-driving cars out recently for test runs, and there were no bad results to report. If Google wants to be the first company to make self-driving cars popular, it is going to have to speed up the process and think of some new ideas to make its offering more attractive than others.
Google is currently engaged in one of the biggest search transformations that we have seen to date. Transformations can sometimes backfire for a company if this is not what the public wants. Google reported, however, that there was a marked increase in search activity on its site after transformation proceedings began. Currently, the main difference that users can see is on the right-hand side of the search results in a box. In the past, this box would have been filled with advertisements or nothing at all. It is now filled with information and photos related to the search queries that users type in. This is eye-catching, and it also increases the number of pages that users search. This information is taken from sites like Wikipedia. Ultimately, it will also increase the amount of hits on non-Google sites in the near future.
Google is also trying to generate increased interest in its computer operating system revolving around the popular Google Chrome Web browser by introducing a new generation of Chromebooks. Google is trying to inspire people to turn away from the more well-known names in the computer industry and towards more unconventional ones. In a nutshell, Google is doing a lot to grow and remain innovative. As a result, I believe it is still one of the best stocks to back.
Google may soon face more serious competition from Bing in the search engine arena. A few interesting partnerships have already been established, and more may form in the near future to represent a threat to Google.
Facebook (NASDAQ: FB) may soon decide to purchase either Nokia (NYSE: NOK) or Research In Motion (RIMM). This will help Facebook get a foot in the door of the smartphone market. If the company purchases Nokia, it will be able to benefit from the fact that Nokia already has a hardware-operating system partnership with Microsoft (NASDAQ: MSFT). In fact, Nokia will soon supply traffic data for Microsoft's Bing maps. This is where things get interesting. Bing maps is doing very well, and if more companies like Nokia give it support, Bing may begin to eat into Google's market share. As a combined force, Facebook, Nokia, and Microsoft could be quite powerful, and if the new smartphone that Facebook plans to release is successful, this will present additional competition for Google. At the moment, these purchases are only rumors though, so more information will have to be gathered before we can be confident in where the situation is heading.
In better news for the company, the battle that Google has been fighting with Oracle (NYSE: ORCL) over Java appears to be at an end. The jury decided that Google did not do anything wrong when it used Java script in its Android phones, even though Oracle owns Java. This is a big win for Google, but it is a significant loss for Oracle, as it would have received a very handsome payout if the ruling had gone in its favor. From my point of view, Oracle did not have much of a case to begin with.
Oracle now must move on and deal with another lawsuit with another strong tech company. Hewlett-Packard (HPQ) is preparing to sue Oracle over a broken agreement relating to the Itanium processors. I am not so sure I would be comfortable owning stock in a company that makes a habit of going to court as much as Oracle seems to do. These legal issues will certainly continue to have a negative impact on Oracle's stock, especially considering how poorly things have gone in its lawsuit with Google.
I would certainly recommend investing in Google at the moment. Things are getting a little better related to the controversy over its privacy infringement, and the company continues to improve its services. While it may not be the first company to develop and market a self-driving car, Google is still amongst the leaders in innovation and will continue to be strong. It may face competition from Microsoft's Bing in the future. At the moment though, Google remains at the top of the industry, and I believe the stock will be increasing between 15 to 20% over the next 12 months.
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