Google's Diagnosis Is Good

I've long been intrigued by Genentech (NYSE: DNA  ) CEO Art Levinson's presence on the board of Google (Nasdaq: GOOG  ) . Perhaps it's nothing more than your typical stock-laden sweetheart deal for an already wealthy Silicon Valley CEO, but I suspect there's something more at play. If I'm right, it'll offer yet another reason to be bullish on Google's long-term prospects.

Genetech aims "to develop drugs to address significant unmet medical needs," using human genetic information to discover, develop, commercialize, and manufacture biotherapeutics. Google, on the other hand, seeks "to organize the world's information and make it . useful," relying heavily on its powerful search technology. At first glance, the two missions and their main technologies might appear unrelated. But in today's supercharged and accelerating business world, I believe they are converging in a way that could benefit both companies.

A study published last week in the British Medical Journal demonstrated how a patient or doctor could search online for common keywords about a disease (even rare and hard-to-diagnose ones) and get a correct diagnosis back in almost six out of 10 cases. The researchers added that in the hands of a knowledgeable doctor, the percentage would likely increase; the doctor could refine the search by entering detailed symptoms and other useful keywords that could lead to a more accurate diagnosis. As ever more medical journals, articles, and information are placed online, and as Google's search algorithms improve, it stands to reason that the percentage of correct diagnoses will increase over time.

This is just the tip of the iceberg, though. As computing power increases, the cost of sequencing the human genome will continue to plummet. This, in turn, will generate an avalanche of genetic information which can be stored in massive data farms -- much like the one Google is building in Oregon. Then, employing ever-more-sophisticated software algorithms, it will be possible to make faster and more accurate connections between this genetic information and disease.

If it stays true to its mission of making "information more useful," Google will naturally seek to share (or sell) this information to biotech companies such as Genentech, whose mission is "to develop drugs to address significant unmet needs." That seems like a classic win-win situation for both Google and Genentech.

This spring, Google was rumored to be starting a new "Google Health" initiative. Though I haven't heard more about it since, I'd encourage investors to keep their eyes and ears open. The initiative suggests that, in addition to being an Internet, advertising, and new-media company, Google could quite easily become a health-care play as well.

That's just my diagnosis, of course, and I'd encourage you to seek a second opinion -- perhaps by Googling for it.

We've sought out further Foolishness:

Whether you come to the same or a different conclusion, share your opinion on Google in CAPS -- The Motley Fool's stock-picking database. Join the free service to participate in our 12,902-player-strong community.

Fool contributor Jack Uldrichwill really be impressed when he can Google a cure for the common cold. He owns stock in Google. The Fool has a strict disclosure policy.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 517325, ~/Articles/ArticleHandler.aspx, 11/25/2014 10:03:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement