March 19, 2010
FX comment: Google, too big to fail
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In 2009 Google reported net income in excess of $6.5 billion and assets in excess of $40 billion. It is likely to be a serious contender in any arena in which it chooses to compete.
I’m hearing that Philip Brittan has already made overtures to some major market-makers, having been in his seat for less than a week. One source at a top-five FX house says: “Google has already been in touch and has been talking to us with a view to setting up a more credible service”. Whether the discussions were about data provision or something bigger is not clear.
Initially Google might focus on data and analytics – certainly the prospect of a credible free offering is enticing when costs are being scrutinized. And FX traders are not slow when it comes to changing data platforms – it’s only 10 years since Bloomberg was seldom seen away from capital markets desks.
But Google’s entry into platforms is intriguing, given that it is the owner of 450,000 servers, according to a 2006 estimate cited by Wikipedia.
Java-based financial software is here to stay. Reuters may stress the importance of security and the reliability of a network-independent platform, but applications can be made secure with Java and users are willing to take responsibility for their own data. Google would be late to the game but its potential is huge – and diversification by a business model 97% reliant on advertising revenue would not go amiss.
FX news: Google lays down challenge to Bloomberg with Brittan hire
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Google too big to fail?
But not too big to flail about like the confused adolescent which they are.
"a serious contender in any arena in which it chooses to compete"?
How about a serious "pretender" in almost every area which it enters, and then fails miserably.
Does anyone recall "Google wave"?
Duh.
Wave that one goodbye. But boy were they IMPRESSED with themselves over Google Wave.
Oops.
Let's see. There was Google Buzz -- trying to apply a buzz saw to Facebook -- just a few hundred million Facebook users too late -- that buzz saw turned on Google "Buzz" and, to use an old Wall Street phrase "ripped Google's face off" so to speak. Actually it could be argued that Google ripped its own face off by the slimy way in which they tricked people into exposing their contacts via "Buzz". It's not uncommon for someone who is flunking out in school to cheat out of desperation perhaps.
Then there was (the list is too long to fit into a post here, but here goes): Google iPhone killer (wipeout), Google Books (Amazon killer -- oops, it killed itself while Apple did do it right -- oops again, now Google wants to SELL books after making the publishing industry so angry it will likely never recover from its Google "experience"), Google radio - DEAD, Google newspaper print ads - MIA, Google TV? Hmmm.
Google wifi? Nice publicity stunt. Google Health? How healthy is that endeavor these days. Froogle (Google Shopping?) Google Scholar? One has the sense that the medical research world has not switched from Medline...Let's not forget "Knol" -- haven't heard of that one lately? It seems to have been intended as a Wiki killer. Oh well...Seems like someone must have been on that grassy knoll and put a few slugs through that project's future...what about Orkut -- a social networking site. Met anyone there lately? Failed Facebook killer? How about Google's "Sketchup"? Was this an Autocad killer? Sketchup seems to have gone splat like a bottle of ketchup dropped off of a tall building...
Google here is an idea: why not give some of that $40 billion back to shareholders? You kids are obviously not able to use it responsibly. You just keep making more and more enemies, and so few useful products, it is laughable.
Alternatively, go buy some real products with that cash.