The Big Picture for Google Glass

The notion of wearing a pair of glasses capable of taking high-resolution pictures, shooting video, and even responding to voice commands feels like some Carl Sagan-like wishlist. Of course, after Google (Nasdaq: GOOG  ) announced earlier this year that it's working on a pair of futuristic glasses that might just redefine mobile computing, it turns out that the future is nearly here.

What, if any, impact Google Glass will have on the online search behemoth's bottomline is secondary -- there's a bigger picture for investors to look at here. As CEO Larry Page said in Google's most recent Q3 earnings announcement, "Revenue was up 45 percent year-on-year, and, at just fourteen years old, we cleared our first $14 billion revenue quarter." Like it or not, Apple (Nasdaq: AAPL  ) fans, Google is a force to be reckoned with, and the development of Google Glass is part of the story.

The specs, of the specs
The objective of Google Glass, according to head Glass guru Babak Parviz, is twofold : (1) Provide users with the ability to easily communicate via pictures and video; and (2) allow users access to data -- Google's longtime bread-and-butter -- quickly and easily. Noble pursuits, certainly, though it probably won't happen as scheduled.

When Google first announced the Glass initiative, hopes were for a 2013 commercial launch. But, as so often happens, Google's initial plans have expanded to include additional features, resulting in a likely delay to market. Touch pads , functionality based on head gestures and voice commands, even incorporating smartphone-like capabilities, are all being worked on, according to Parviz.

The new features sound great, but according to the latest rumors, Parviz and his Glass team now hope to have a $1,500 working version of the new specs available for developers sometime this spring. Once the tech geeks get ahold of the glasses, expect several months of tweaking existing features, as well as adding additional functionality based on feedback. Looks like Sagan fans will have to wait until 2014 before donning their new shades.

Does the success of Google Glass matter?
For growth investors, the timing and bottom-line results of Google's Glass initiative should be a secondary consideration. More important to Glass' commercial success is what it says about Google as a company and as an investment opportunity. Google is a $14 billion-a-quarter revenue machine because Page understood early that to become a real technology industry force, Google needs to be a lot more than an online ad solution. Yahoo!, to CEO Marissa Mayer's credit, has figured this out, and is just now taking definitive steps to accomplish what Google learned several years ago.

It's not a stretch to infer that the success of Google and its Android OS was a factor in longtime competitor Microsoft's (Nasdaq: MSFT  ) entering the mobile game with its new Windows 8. Taking it a step further, Microsoft's shift in strategic direction -- from software to its new objective of becoming a device and services provider -- also has a very Google-like, full-service IT ring to it.

Even Hewlett-Packard (NYSE: HPQ  ) is tinkering with WebOS again, and its recent affiliation with Google to run some of its Nexus products demonstrates that HP wants to breathe some life into its own mobile efforts. Like Microsoft, HP is yet another IT industry stalwart in the midst of reinventing itself to better compete in high-growth markets -- also very Google-like.

Though Amazon.com and its AWS unit is generally considered the forerunner in cloud computing, Google Docs and continued growth in its data center solutions, among other cloud alternatives, make it pretty clear Google has made significant inroads in an exploding market.

Google Deals, the myriad streaming video alternatives Google's YouTube offers, and its Nexus tablets and smartphone products are all ancillary revenue opportunities beyond its core moneymaker: online advertising .

In spite of some significant acquisitions, including the $12.5 billion Motorola Mobility, Google continues to retain an obscene amount of cash on its balance sheet. Dividend, anyone? Its cash flow is strong, and revenues aren't likely to slow anytime soon. That's all great stuff, and should have potential investors salivating.

But its dominant position in online advertising and its stellar financials are only part of the story. Take a peek through Google's new glasses, and you'll see a comprehensive, provider of cutting-edge IT solutions poised for long-term growth.


 
 
 

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