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Google, Yahoo and MSN continue to duke it out in search. Yahoo and Google are putting intense efforts into rolling out video and other multimedia search properties. Yahoo has invested heavily in a southern California operation to bolster its media efforts, and Google Video plows ahead.

However, in my view, the real horse to watch is Apple. Yes, Apple, maker of the iPod. Apple completely groks the new genres of media and how today's consumers want to buy and enjoy media. They were the first to understand that if you unbundle music from the album/CD format and make it easy to purchase, users would buy and not steal. They then took it one step further and added podcasts, yet another modern genre of audio entertainment.

With iPod Video, Apple pursues video. Note that they did not target full length feature films for the Video iPod but rather "media snacks," short form videos such as music videos. It would not surprise me to soon see on Apple's website the kinds of videos that you see on up-and-coming video sharing and rating sites such as metacafe (full disclosure: Benchmark is invested in Metacafe) or revver.

And now, a report by AP seems to confirm this trend, stating that Apple's website was the fastest growing website during the last month, reporting a whopping 30.8 million visitors.

Is it possible that if Yahoo is the new Internet media leader with RSS, etc. and Google is the leader in search, that Apple will own rich media? If the answer is yes, this has some interesting implications.

From a stock perspective, Google's operating margin is ~33% (NYSE:TTM). Yahoo's operating margin is 21%. (TTM) while Apple's current mostly-hardware business sports an 11% operating margin. If Apple were able to increase its profitability through building a rich media portal, on its 45+ PE multiple, the stock could take off.

It also points to an interesting trend: access is becoming more important. Because I access my media through my iPod, I use Apple's website and iTunes software to manipulate and purchase my media. Yahoo has proven that broadband deals with SBC bring more people to its home page. Google, seemingly, has figured out that device access brings users, and is now trying to roll out free WiFi. But Apple's devices and computers are well-tuned for rich media, giving them a leg up in this next battle. Look for Apple to roll out more devices that give us better and more bite-sized access to lots of media.

So watch out for Apple (or should I say watch and listen); it will be rolling into this Media Portal battle. The iPod is a high growth trojan horse to a higher profit margin business.

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Source: Portal Wars: Google, Yahoo and APPLE!! (AAPL, GOOG, YHOO)