Like many others, I was excited when Google (Nasdaq: GOOG ) rolled out its new financial site Tuesday morning. Google Finance is a neat tool, and I've used it every day since its debut. But its relative merits aren't why I'm writing today. I believe that the introduction of Google Finance represents a watershed moment in the life of Google, and a potential tipping point for Motley Fool Inside Value pick Microsoft (Nasdaq: MSFT ) .
A portal push
Google has been assembling the pieces of what could become a new portal -- everything from an easy-to-use RSS reader (Google Reader) to a series of community sites (Google Groups) to localized search that features integrated mapping (Google Local) to a comparison-shopping site (Froogle). And there are dozens more still cooking in the lab.
But you knew that, right? OK, here's what's new: Google Finance pulls together multiple Google services -- stories from Google News, posts from Google's blog search, and discussions from Google Groups, all on a single page. And then it remembers you. Each time you return your recent quotes are listed, and news stories are customized accordingly.
Yahoo! Finance may be much richer in terms of a total package, but it's designed in classic Web 1.0 format: Pages are static. Users follow links to get more information when they need it.
Welcome to the Web, version 2.0
That structure works incredibly well if you're browsing, but not if you're actively attempting to solve a problem. Enter Web 2.0, which, simply defined, is where the Web is the platform and you, not the site you're viewing, control the data flow. (Check out this discussion at Motley Fool Rule Breakers to learn more about Web 2.0. A 30-day all-access pass is yours for the asking.)
Take Zillow.com, for example. This real estate site allows any user to estimate house values. Inputs are aggregated with publicly available assessment data to arrive at fair values for every house in every neighborhood in the U.S. Want to find out your home's value? Put in your address. Zillow will pull up a satellite map that shows your neighborhood and the approximate resale price of your humble abode based on current inputs. As the inputs change, so too may the total.
Services, not applications
Google's jumble of Web tools are slowly combining, transforming from Web 1.0 sites to Web 2.0 services. What's more, Google is bringing services online that you would previously have downloaded and installed as applications, such as Gmail and the Google Talk instant messaging service. And how about the new video store?
Now consider online word processor Writely.com, which was recently acquired by Google. As fellow Fool Tom Taulli points out, by itself, the Writely deal doesn't mean much. But in Web 2.0 terms, it's positively huge. Right now, compiling and pulling data from the Web and dumping it into a Word document is inefficient at best. At worst, it's a nightmare.
What if Google attacked this problem by giving you everything you needed in an interactive browser that had drag-and-drop services? In a new document created in Writely, you could drop in stock charts from Google Finance that would automatically update along with the market, and live feeds to topical video clips. All the necessary HTML would be created on the fly. And, of course, you'd have the ability to drop in tables from a spreadsheet service. Or slide images from a presentation service. Or relevant email content from Gmail. Or a transcript from a Google Talk chat. Or ...whatever.
The idea, in sum, would be to reframe the notion of a Web portal from a static collection of information (MyYahoo!) to an interactive, customizable, and always-updated jumble of services (The Googleplex?). Indeed, I believe Google is working on just such a project right now.
Google's growing ecosystem
I'm basing that thesis on a variety of factors, starting with Google's push to bring offline content into the online world through Google Base, Google Scholar, and, most controversial of all, Google Book Search. Merging the two worlds creates more opportunities for contextual advertising. But perfecting the model requires control over where and how the content gets accessed. That control is best exerted from a single point. (Interactive portal, anyone?)
Then there are Google's dozens of broadband investments. It's pouring money into both Wi-Fi and broadband over power lines, and is working on making it easier to deliver content to mobile users. It's a short leap to TV from there. There's also a rumor that Google plans near-unlimited online storage through a service called GDrive. The hope, it seems, is that you'll look to Google first when you have to do something on the Web. You know where all of this leads, don't you? (Hint: It's a six-letter word that begins with a 'P' and rhymes with "mortal.")
Aiming for Microsoft's heart?
Mr. Softy ought to be worried -- but not because Office is about to go away. It isn't. None of what I've outlined above is beyond Microsoft's reach, or Yahoo!'s (Nasdaq: YHOO ) , for that matter. But if either firm understands the idea of value creation using the Web like Google, they have yet to show it. That had better change, and soon.
Today, Google Finance is nothing more than a neat new service. Tomorrow, it could be the gateway to a Google-powered browser loaded with accessible, Office-like services and deep hooks into the best information the Web has to offer. Do you agree? Disagree? Let me know. I'll publish the best ideas in a follow-up story one week from today.
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Fool contributorTim Beyerswonders what a Google browser would look like. He's sure he'd download it. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.