Sunday, February 26, 2012

Google Investors Should Not Disregard Robotics

As I reported previously, Google (GOOG) has extreme potential in robotics. But, most investors don't price robots in to Google stock, because they feel robots aren't happening soon. I disagree. Speculators with just a little bit more patience than The Market need look no further than driverless cars to comprehend the technological immediacy of cloud robotics. Look Mr. Market, I get it, you have been promised jetpacks since the 1970's; I'm sorry that didn't work out for you. But with the announcement of omniscient smart glasses, Skynet-Google is establishing itself as a guaranteed topic of conversation in 2012. In the reality of technology, robots are proximate, and in the perception of society, we're just starting to realize this.

Some imagine privacy regulation will thwart Google's evil plans. I disagree. In cloud robotics the Unites States has a synergistic opportunity for workers to expend effort building something useful. With the foil of Wall Street, Silicon Valley has branded itself as the true avenue of the American Dream. And strategies that solve multiple problems simultaneously are favored by Barack Obama (Ron Suskind points this out in his book): the implementation of cloud robotics offers this type of "integrated solution" to the US economy. Also, Obama is close with Google's CEO Erich Schmidt. For these reasons, I wouldn't expect our executive branch to spearhead a potent regulatory effort. On the contrary; implemented cloud robots may turn out to be a transformative economic legacy era that Obama and/or Romney/Santorum/Gingrich finds attractive.

Google recently liquidated its position in Clearwire (CLWR) below market value. Google recently warned the music industry all things weren't rosy with Google Music, and it was unclear that Google was ever planning to win in this market in the first place. Google continues to invest heavily in mobile devices, but dilutes its own profits by sharing an open source platform. One must wonder, with all these sacrifices, what's the strategic endgame here? Of course, the answer is advertising revenue. Google makes ongoing strategic sacrifices to build its position in the advertising space.

Investors grow impatient as Google does this, but patience tends to pay off over time for Google investors. With public consciousness zooming in on smart glasses, Skynet, and robots, Google should soon get the investor recognition that it deserves. Berkeley trusted Google over Microsoft to offer a more productive solution to its students and faculty. Whom would you trust more than Google to broker your robot apps?

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

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