So Google (NASDAQ:GOOG) finally squashed the rumors of a "g-phone," and instead announced their intentions to create open source software for cell phones. At first, this seems to be a significant departure from their business model. Traditionally, Google makes money selling Internet advertisements, so why would they move into cell phone software? The answer: TO SPY ON YOU!!
Google's proposed cell phone software is completely consistent with their business strategy to gather as much personal information about you as they possibly can, so they can sell it to behavioral based advertisers. For example, the new cell phone software will allow Google to always know where you are, who you are talking to, and what your regular routine is. They will then sell this information to behavioral based advertisers. For example, if you call Florida regularly, behavioral based advertising will allow airline companies to target you with cheap flights to Florida. A recent Economist article poses the question: "Who's afraid of Google?" Well. I am. I don't want Google capturing all kinds of personal information about me.
There is a famous book by George Orwell titled "1984," where the concept of "Big Brother" is first introduced. Orwell describes Big Brother as the eye in the sky that is always watching you. Well guess what? Google is Big Brother. They already hit you up with Internet advertisements based on all kinds of personal information they've gathered about you from your web surfing habits. And now they're going to take it one step further. They're going to use cell phone software to watch your every move.
As an investor, the question is whether or not you think Google can successfully implement this new cell phone strategy. Due to "key word inflation", traditional advertising growth will eventually slow, and Google will need to look elsewhere to maintain its impressive growth rate and valuation. Can they use cell phones to gather personal information about you, and then sell it to behavioral based advertisers to make a lot of money?
Personally, I own Google shares. But more importantly, always remember: Big Brother Google is watching you!