Google is one of the key players of the Internet and for very good reason. They are one of the few companies actually making money off the Internet ... not with it, but because of it.
They saw an opportunity to excel in a field that was virtually untapped. Advertising has always been big business, although television and print were pretty much cornered by a huge list of advertising companies across the globe. They saw the huge potential to make money by completely dominating the Internet market for advertising. And that's why their stock is hovering the $500 mark.
Most analysts saw a plateau on Internet advertising that Google could not overcome. They've already cornered the market, how much more money could they make? Taking a pretty huge chunk out of the market for print-advertising where else could they go? Video.
Many of you are thinking that they tried that with their purchase of YouTube for the cool 1.6 million dollars. Many of you probably thought that the whole idea of YouTube being worth that much money was downright ridiculous. How could ads in YouTube videos pay off for Google especially to recoup the amount it paid for it?
Think outside the box. YouTube was an experiment. Acutally, Google Videos was an experiment that went wrong. So they purchased YouTube to understand it's inner workings and closely track its usage. What for you ask? The key is television. Yes, television. Television is the one advertising market that Google has yet to dominate. With newspaper and television advertising you pretty much have to have a newspaper or television. Too much effort to acquire every newspaper and television station around the world.
Google is using YouTube to envision a global network of television channels. Yes, television channels. Google is set to explode with their technology and expertise with content delivery over the Internet. We all know how well iTunes has succeeded with music, and their soon to be fame with videos and television.
Now picture Google serving ads in television shows. Not the same commercial everybody within a geographic region would see with an NBC or CBS station affiliate. Commercials garnered to your Internet and viewing habits.
Google has long been known for tracking searching and surfing habits of users. Just imagine Google's ability to target commercials directly related to your tastes during a tv show or even a live sporting event.
In the future Google will become a vast television agency serving up live and pre-programmed television channels with advertising that caters to every single user. Every television show served will be indexed and cross-referenced with your surfing habits and geographical location.
Viewing a station while at home in Denver in the winter? You'll get ads for the local ski resorts.
Viewing a station while in a hotel on the east coast? You'll get ads for local establishments within walking distance from the hotel. The degree of marketing accuracy is astonishing.
Throw into the mix Google's new Android phone and how they will target individuals with phone commercials. Commercials will come on your phone while driving past a gas station, or shopping mall.
Google has the technology to track what you like, where you are, and whenever they like.
That to me is an impressive stock buy. Especially at today's share price of $537 USD.
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