Four Stock Implications of Google Blog Search (GOOG, IACI, MSFT, YHOO)

Google's launch of its Blog Search service has caused a predictable outpouring of analysis from bloggers. You can read evaluations of the product elsewhere; here are four stock implications:

1. Google Ahead of Yahoo and Microsoft in Search

Make no mistake: "blog search" is not only about blogs. It's about searching for content that is highly time-sensitive. (Blogs disproportionately focus on news, so they typify time-sensitive Web content). As Google says itself in its Blog Search announcement:

...we're continuously adding new content, very nearly in real time. That way you can find commentary on breaking news...

As such, the technology behind Google's blog search will be integrated rapidly into generalized Google searches. Perhaps Google will allow users to chose between more or less time-sensitive search, or perhaps Google will itself distinguish between them based on search terms. Either way, Google just demonstrated that it is clearly ahead of Yahoo and MSN in search. Since search is the fastest growing and most lucrative online advertising market, this matters.

2. Competitive Spill-Over into Home Pages and Desktop Clients

Google's lead in blog search will strengthen its competitive position in two other areas. First, home pages such as My Yahoo are increasingly dependent on search. How can you add topic-specific sites to your home page if you can't find them? By offering better blog search, Google strengthens its position against My Yahoo.

Second, Google's desktop client - Google Desktop Search or Sidebar - adds RSS feeds from websites automatically. Google's blog search will integrate nicely with Sidebar, allowing users to search for and add RSS feeds with ease. Google must make its desktop client compelling for users, because it needs to reduce its dependence on the Microsoft-dominated browser.

3. Yahoo Finance is Under Threat

Financial news is highly time-sensitive and also a lucrative advertising venue. Until now, Yahoo has dominated the market for consumer financial content by offering an ever-growing array of stock market data. But its financial news stinks. It's dominated by me-too news services devoid of genuine analysis, and Web sites (such as The Motley Fool) that seem to pay for placement.

Google is quietly assembling the tools to demolish Yahoo's lead in finance. First, it offered stock prices, charts and key data in direct response to a Google search for a ticker symbol (try it if you haven't already), instead of requiring users to click down three levels into Yahoo Finance. Yahoo was forced to follow suit. And now Google offers effective search for timely financial content from smaller content providers. (Try searching for a stock ticker on Google Blog Search.) Remember, most producers of financial content will use RSS as their delivery mechanism of choice so this isn't only about blogs.

The result: in one move Google has revolutionized access to financial content. It won't take long for investors, traders, brokers and fund managers to realize that Google Blog Search is a better source of financial news and analysis (not data) than Yahoo Finance. Next stop Google Finance?

This matters for Yahoo. Google is systematically outmaneuvring Yahoo's stickiest products: web email, instant messenger, news, movie info, and finance. What's next?

4. Ask Jeeves Bought a Lemon, and IAC (ticker: IACI) Bought Ask Jeeves

Bloglines, a blog search service and Web-based RSS reader, was purchased by Ask Jeeves on February 8th of this year. Ask Jeeves was subsequently acquired by IAC. Yet Google Blog Search runs rings around Bloglines' blog search. Just try searching for a ticker symbol on Bloglines (here's a Bloglines search for "YHOO"). And Bloglines' web-based RSS reader is also problematic. (Anecdotal evidence: I just lost about 400 RSS subscribers because Bloglines mis-associates the Internet Stock Blog with a defunct RSS URL.)

There was skepticism about ASKJ's acquisition of Bloglines at the time. It's now clear that Bloglines was a waste of money. Google Blog Search reinforces the risks of acquiring revenue-less companies that compete with Google's core competencies. (Say goodbye to Technorati.)

Bottom line: incrementally good for Google, bad for Yahoo, bad for Microsoft, bad for IACI. And AOL (Time Warner) is so lost it isn't worth mentioning.

Related:

• How much did Ask Jeeves pay for Bloglines?
• Did Ask Jeeves ask enough questions?
• Ask Jeeves confirms acquisition of Bloglines
• Forrester likes Ask Jeeves/Bloglines combination
• Google takes on Yahoo Finance
• Google takes aim at My Yahoo
• Under the hood of Google Movies - implications for GOOG and other stocks
• All Internet Stock Blog articles on Google, Yahoo, IAC, Microsoft.
• The complete list of stocks (and links to articles about them) covered by The Internet Stock Blog.

Comments

[macaonghus:]

Hm I don't know ... I like your angle, but I am not sure that I agree with it. It is easier to hit a lot of blogs because they run on specific domains (OK, many don't but still). Livejournal, Blogger, Typepad, MSN Spaces etc. I think you might be trying to work backwards from the assumption that Google Finance is coming. In fact, what Google has done for Finance is pretty minimal, sure you can enter the ticker in the search box, but not much more than that. And Yahoo allows that anyway. For people who use Finance regularly it is pretty easy to type. I agree that Yahoo Finance is looking increasingly out of date, and the news is poor, but Google still has a long way to go. And I am sure Yahoo is doing something about it.

I think an equally plausible interpretation of the way Google has addressed Finance is that it filling in holes with polyfilla and hoping no one notices it's just stopgapping.

2005 Sep 15 10:09 AM

[vcbeantown:]

Google searches are an intellectual insult now that EVERYTHING is "sponsored" and you don't get the exact match until 20-30 hits down. That is unacceptable and MSFT Search is better for me.

2005 Sep 15 10:53 AM