Google's Delphic Oracle? (GOOG)

| About: Alphabet Inc. (GOOG)
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The Stalwart submits: For some reason last night (don't ask!) I ambled over to Henry Blodget's blog Internet Outsider where he was chiming in on the news that Google had about dMarc Media, a radio advertising company:

So let's extrapolate: If there aren't already, there will soon be companies like dMarc for all media: Television, newspapers, magazines, telemarketing, outdoor advertising, etc. Google will buy the leading player in each market. Advertisers will go to Google to design and manage coordinated advertising campaigns across all media--with Google, presumably, taking a cut of every dollar spent on other companies' media properties (the TV and newspaper equivalent of AdWords for Google Network Partners). Other media companies will continue to manage the expensive hassle of creating content, and Google will monetize it.

The profit equation, in other words, will look similar to the current one on the web: Other companies create the content, Google helps users find it and advertisers find them. In exchange for this service, Google keeps a fat cut of the profits.

Not a bad business if you can build it (which Google seems well on its way to doing).

This is, approximately, what a lot of people are thinking about the future of Google. But this idea that "Google will buy the leading player in each market" is absurd. First of all, despite, their hundred-thousand Linux boxes whirring away in the basement, Google doesn't have an oracle to tell them which company will be the leading player in a market. (Editor's note: see Oracle at Delphi, image above) A strategy based on cherry picking acquisitions will inevitably result in overpayments, missteps, misdirection, integration problems, et. al. Notice this was not the strategy employed by Microsoft during their great ascent, nor any of the other great tech companies (save Cisco).

Some may quibble, saying that Google's acquisitions are strategic acquisitions, small sums of money to get a technology that can be scaled up grandly. Ultimately, development in this manner will be costlier than if they worked on developing technology in-house. Besides, aren't they hiring people at a rate of like 10-per day? What are they all doing? Still refining the PageRank formula?

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