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Four Implications of Google Sidebar (CNET, DJ, FWHT, GOOG, IACI, INSP, MSFT, TSCM, YHOO)

David Jackson profile picture
David Jackson

Four investment implications of Google (ticker: GOOG) Sidebar, released today:

1. Don't forget this is a defensive move

Google faces a looming threat to its core business of monetized Web search from Microsoft (ticker: MSFT). As search is embedded in applications such as Web browsers (eg. Firefox and Safari) and desktop search (through the PC operating system), Google becomes vulnerable to the providers of those applications. That means Microsoft. The next generation of Internet Explorer contains embedded MSN search, and Microsoft's desktop search - when Longhorn eventually ships - will use MSN search for Web pages. It's therefore imperative that Google establish a user-base for its own applications and also discourage users from adopting Microsoft applications, as that will be the only way for Google to maintain its search market share.

Anecdotal and speculative illustration of this: note that in the screen shot provided by Google of its Sidebar, the Quick View has a link to Mozilla Firefox Start Page. Google does not want you to use Internet Explorer.

Investors may be wowed by the elegance of Sidebar and the prospect of Google entering Microsoft's territory. There will be lots of speculation that the Scratch Pad function and Google's insertion of its own search into Outlook are the first signs of an assault on Microsoft Office. But they need to remember that Google has no choice, and that asking users to download an application is a tougher sell than pre-loading software on every new PC.

2. Watch out Yahoo!

Google Sidebar poses the clearest competitive threat to Yahoo (ticker: YHOO). Google's integration of direct access to movie information and stock quotes within Google search has already demonstrated that Yahoo's approach of requiring users to visit topic-specific Web pages as a gateway to information is outdated and inefficient. If Google gets traction with Sidebar, users will find

This article was written by

David Jackson profile picture
I'm the founder and CEO of Seeking Alpha. Before Seeking Alpha, I worked as a technology research analyst for Morgan Stanley in New York. After I left, I wrote The ETF Investing Guide (which you can find by clicking on "Author's Picks" below), and some articles about individual stocks, and then started inviting other people to contribute to the website. Seeking Alpha is now the dominant crowdsourced platform for discussion of stocks and investing, and the only place with coverage of many mid and small cap stocks. I have a B.A from Oxford University and an MSc from The London School of Economics, and am married with five children.

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