Back when the Web was spun, in the mid-1990s, I asked media companies "how hungry are you?"
Fact is, a newspaper or a Web site like this one is only taking a tiny piece of its partners' marketing budgets. That ad box next to this piece is a billboard. Someone has to fill it creatively, and link it to some effort to sell something, for it to have value.
Critics here and elsewhere routinely deride Google (GOOG) as "just an advertising company" and in terms of its revenues they're right. No matter how much data it collects on people, it's still just selling billboards, opportunities for companies to come in and try to sell you stuff. Consumers resent it because the billboards are intrusive. They're not like Google itself - a service.
Google's new privacy policies are yet-another attempt to get over that, to make its billboards as much of a service as its content. The idea is that if it knows what you're interested in buying, and if it has an advertiser who wants to sell you just that thing right now, then their ad becomes a service, rather than an intrusion.
Every journalism company, and Seeking Alpha is at heart a journalism company, is in the game of bringing buyers and sellers together. Journalism is the creation of market spaces. Publishers define the market, the place, lifestyle or industry to be organized and advocated for. They bring in entertainment aimed at the people who care about that niche, and the business consists of those billboards. It's when you click there, to the right of this story, that SA makes money. I'm just the dancing bear.
Up until now, Google has mainly been in the business of trying to make raw ad space more valuable through the use of data. It has always been in the business of trying to make general ad space into something more of a service, tailoring the message to fit each customer, as the customer seeks tailored messages in their choice of sites. You're at Seeking Alpha. You're interested in good stock investments.
What Motorola Mobility (MMI) , what Google TV, what Google Shopping and Google Payments are about is going "up the stack," giving Google something it can sell you through this vast machine it has built to sell for other people.
I asked publishers, "how hungry are you?" I meant, are you hungry enough to do more than sell billboards, hungry enough to define your markets in such a way that you become a client's marketing partner, a spigot he can turn on when he has things to sell. Do you have the trust of your market, and enough market knowledge to prove your claims about that market to your advertisers?
Well, under Larry Page, Google is hungry. Apple (AAPL) has outperformed Google over the last year, up 29% while Google is down 5%. And it's even more dramatic going back five years, Apple up 375% and Google up 10%. Go back 10 years - all the way through Google's own boom - and you're still five times better off in (AAPL) than in GOOG. Because Apple is hungry. Apple has something to sell.
But Google is hungry now. And we'll see who eats most going forward. You may disagree, but I see more growth opportunities in GOOG, because they're just now onto the game. Question is, is Larry Page the next Steve Jobs? Or the next Jerry Yang?
Place your bets.
Disclosure: I am long GOOG.