Siri from Apple (AAPL) is a voice controlled virtual assistant that can answer your questions. In my last article on this subject, titled Small Study Finds Apple's Siri Could Hurt Google, I described how Siri has the potential to harm Google (GOOG).
Our study shows that Siri users are already beginning to change their behavior and going to Google only when Siri cannot answer their questions.
Google is a technologically advanced company and certainly has the resources to compete with Siri. A close examination shows, no matter how hard Google tries, Google cannot catch Siri.
Siri has two parts. First is the voice recognition, but more important is the second part that uses artificial intelligence to understand the context of a question. Further, Apple has done a fantastic job of integrating Siri with other applications such as calendar, GPS and reminders.
Google has Android voice recognition. In our test, the voice recognition available on Android appears to be inferior to Apple Siri. However, it is only a matter of time before Android voice recognition equals the voice recognition capability of Siri.
I have previously published that Google was blindsided by the introduction of Siri. Certainly Google can throw in massive resources to someday come up with artificial intelligence based context recognition programs similar to what Siri has.
Someday Google can even integrate its potential version of Siri with other applications.
The reason Google cannot catch Siri is that the business model of Google gets in the way.
The business model of Google is to sell advertisements. Google does not charge users to search its site. The search at Google does not provide the answer to a user’s question but provides a number of links that may contain the answer. For a typical user, it is a matter of hit and trial by clicking the links to find the answer. Typically, after a few frustrating clicks, the user is tempted and clicks on an advertisement. As soon as a user clicks on an advertisement, Google makes money.
Siri spares the user the hassle of clicking on a number of links to find an answer. Siri simply in an elegant and direct fashion gives the user the answer. In this simple process there is no need to click on advertisements. Even if advertisements were presented, there would be less temptation to click on the advertisements because the user would have already found the answer.
Such a radical shift is a Google killer. Some have suggested that Google could put voice advertisements before an answer is given. I cannot see most users putting up with the annoyance of listening to an advertisement before getting a search result.
The point is that Google’s business model does not allow it to catch Siri. Over a period of time Google will lose its most lucrative searches and the related advertising revenue. It is time to lighten up on Google stock. Investors may consider investing the proceeds in companies that benefit from Siri.
One publicly traded company that benefits from Siri in the long run is Nuance (NUAN). As a full disclosure, I and subscribers to ZYX Buy Change Alert have already taken profits in the run up and now looking for all six screens of the ZYX Change Method to be satisfied before we enter the position.
Disclosure: I am long AAPL.
Additional disclosure: I am long Apple from an average of $131. I took profits on 50% of the position at an average price of $360. Subscribers to ZYX Buy Change Alert may have a similar position and may have taken similar actions.