Thursday, July 22, 2010

Where to Invest, Google or Amazon?

A Question has been popped on the web, what is the better investment, Google or Amazon. What makes this an intriguing question is most comparisons about who Google is competing with usually winds up being a debate about Apple or Microsoft. This question is a bit different, it asking where the safer risks lies in investing your money.

However, there is plenty to think about. Amazon is pretty much the king of online retail. In fact, it might be the only online retailer capable of transcending its own roots and redefine what it means to be an online retailer. Amazon has already made a few moves in this direction, particularly with the introduction of the Kindle and forcing other book retailers to keep up or fall behind.

Google, on the other hand, has its fingers in everything. Google checkout, for example, is probably the closest Google comes to competing with Amazon directly. Known as a payment gateway, it has also paired itself with online retailers and lists their wares as part of Google products.

Pushing pie charts measuring the past is not really much of an indicator of the future potential  of both companies.  Each have a strong niche representing a good investment. Google has search and advertising, and Amazon will sell its mother given the chance.  But Google is doing much more than Amazon to capture bigger profits in the future. YouTube, owned by Google, is beginning to toy with income streams other than advertising. GoogleTV is on the horizon, combined with the possibility of renting and buying media directly through the search giant is all but a reality.

Currently Google is behind the hottest operating system available. Making its way onto smartphones, tablets, and even inside TV sets, cars, washer and dryers, just about anything you can name. It is all well connected to a mandatory Google account. It might be true that Android is be giving away for  free to anyone who wishes to use the platform, but make no mistake it all means money.

Yes, you can rent and buy movies from Amazon too. The difference is that Google is intricately connecting itself to be needed beyond just shopping.   Those nifty Gmail accounts include access to the future of cloud computing as well. Google Docs, Voice, and Maps, are all services attracting users to Google's brand. It is like paint on the wall, its expected and only its absence raises questions.

To really answer this question, ask yourself, "Which company can people live without?" I put my bets on Google being  indispensible.