Google TV? You Betcha!

Jul.26.12 | About: Alphabet Inc. (GOOG)

Move over Apple (NASDAQ:AAPL), there is a new cable TV in town and it is offered by Google (NASDAQ:GOOG).

This breaking news could send a small shiver down the spines of Apple shareholders who have anxiously been waiting for the long-rumored Apple TV.

To be clear, Google is not offering a new version of an actual television set, just the content that is delivered to your existing one. Which, to me, is what it's all about anyway. Content via the enormous capabilities of Google could further hamper the rise in Apple's share price, simply because of this new competition already out with a new product prior to even Apple announcing one.

What This Means For Google Stock

Google Inc. (<a href='http://seekingalpha.com/symbol/GOOG' title='Alphabet Inc.'>GOOG</a>)

I suppose the first thing is that Google shares will climb more robustly than they have of late. Given a brand new market to profit from, it will mean more dollars straight to the bottom line, more cash on hand, more revenues, and greater growth all around.

This Business Insider article seems to be the first to break the news:

Google just became a cable company -- or at least, announced it intention to become one. That's the news out of Kansas City, reports Arik Hesseldahl at AllThingsD. This is part of the Google Fiber project, where Google built an ~$500 million fiber optic network in Kansas City to provide those folks with an Internet that is 100 times faster than what the rest of the world uses. Google Fiber launched today.

Pretty heady stuff and certain to attract more people than we might begin to envision. Of course, not everyone will be able to get Google TV right away:

But there's a hitch, Hesseldahl reports. Google isn't going to build it first and offer it to everyone. Neighborhoods are going to have to get together and petition for the new service, so that Google knows it will have enough customers in the area to make it a profitable investment.

OK, so Google is hedging this bet. To me, that limits the downside if it is not profitable, and the upside will slowly come into focus. Maybe not so slowly.

The article continues:

The ramifications of this announcement are obviously huge. Google already controls the way people navigate the Internet. If the company gains control of how people physically get onto the Internet -- the hard to control 'last mile' -- Google will possess incredible power in negotiations with Hollywood and Madison Avenue. It will also spook some in Cupertino, where Apple is said to be working on a TV.

My Opinion

Apple has been under tons of pressure of late in the form of competition. This looks like a huge shot across the bow by Google. I might even be thinking of buying Google and shorting Apple soon.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.