Monday, March 27, 2006

From the Company that Brought You … Everything

Google recently unveiled Google Finance, new competition for other financial information sites like Yahoo!, CNNMoney, Bloomberg, MSN Money, and Smart Money. This is another step in Google's evolution from an Internet search engine to an all-purpose web portal. Recent Google offerings include free e-mail, news, instant messaging, and mapping services. The longer Google keeps users in its site, the more it collects in ad revenue--the main source of Google’s profits. Google Finance, however, in a very un-capitalistic fashion, will initially not carry ads.

Rather than initially developing its own finance content and commentary, Google will offer a combination of interactive and analytical tools and links to outside media outlets for financial commentary. Some industry experts warn that Google’s drift toward portal status (a branding the company dislikes) may overextend the company as it draws attention and resources away from its search engine. Rumors are swirling that Google plans a foray into a sports site, similar to sites at Yahoo! and MSN.

Google Finance brings innovation to the standard quote and chart services their competitors offer. Users get instant price and volume information by passing the cursor over Google's interactive chart, whose timeline can be easily changed and dragged. On a short enough timeline (a few days or less), you can get price and volume information throughout a day’s trading. Markers on the chart annotate announcements regarding the company so users can instantly see how announcements affect price and volume. Users can also view blog posts about the company, look at related companies, and learn about company management.

However, Google's entrance into the finance arena has already prompted MSN and Yahoo! to announce new features. Google Finance will not have it easy--users tend to be very loyal to their financial websites, and both Yahoo! and MSN have unique tools that create competitive barriers for Google. Google admits the finance site is still a work in progress, including its search features. Oddly enough, the first result in a search from the Google home page for “Google Finance” is a Yahoo! Finance page about Google.

1. Access Google Finance and look up Brady Corporation. Zoom out the chart to the 6-month view and briefly discuss any major news events and corresponding stock price reactions that have occurred.

2. What effect is new competition expected to have on a market? Does it seem like that effect is taking hold in the financial website market?

3. What form can barriers to entry take in a market? What barriers will Google face?

Topics: Google, Finance, Stocks


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