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Google's Inconvenient Truth

Earlier this week, fellow Fool Rick Munarriz wrote about Google (Nasdaq: GOOG  ) CEO Eric Schmidt accepting a seat on Apple's (Nasdaq: AAPL  ) board. Rick suggested that Schmidt's move was about making life miserable for Microsoft (Nasdaq: MSFT  ) . I've got a different idea.

In the short term, I think it's more about Apple landing a spot for its iTunes digital media service on Google's toolbar, and Google finding new ways to leverage its advertising network. In the longer term, though the picture begins to get cloudy, I have a sneaking suspicion that video content will play an increasing role in the two companies' future relationship.

Call me a conspiracy theorist, but I see a link here, in the person of former Vice President Al Gore. A board member at Apple and "special advisor" to Google, Gore recently turned Hollywood star with a leading role in the global-warming documentary An Inconvenient Truth. In addition to his political and environment interests, Gore is also the founder and owner of Current TV, a current-affairs TV channel that shows user-generated programs.

I find Gore's roles at Apple, Google, and Current TV particularly interesting. This past weekend at the Edinburgh International Television Festival, Marissa Mayers, Google's vice president of search products and user experience, told the audience that the Internet giant was television's friend, not its rival. "We're computer scientists," Mayers said. "We're not brilliant storytellers or content creators."

It could be true that Google, Apple, and Current TV won't do anything together to rival television -- but color me skeptical. For one thing, Gore was also at the Edinburgh event, where he said that he hopes his new channel will reach 50 million people by 2010. A little help from Google and Apple could only help to meet such an ambitious goal.

I'm primarily skeptical, though, because Google's deeds haven't always mirrored its words. Note Google's decision yesterday to begin allowing PDF downloads of out-of-copyright books such as Dante's Inferno. Some of you might recall that when Google first announced its intention to scan out-of-copyright books two years ago, it indicated that the books would not be made available for printing. There's nothing inherently wrong with this change of position, but it does lead me to question Google's trustworthiness.

When I combine this spotty history with Google's growing relationship with Apple -- whose digital sales of TV shows on the iTunes Music Store have made it an increasing force in online video distribution -- and potentially Al Gore's Current TV, I can easily envision a scenario where Google, despite its reassuring words, does become a rival to television in some way.

As an investor in Google and believer in the power of the free market, I see absolutely nothing wrong with this strategy. It might be an inconvenient truth for Google as it tries to reach out to the television industry in an attempt to leverage its ad network, but it doesn't seem to violate Google's long-standing "don't be evil" policy.

If Google does have plans to eventually rival TV, I'd simply encourage the company to be more candid about them. But then again, showing its hand so early might be just the sort of strategy that Al Gore would advise Google against.

Microsoft is aMotley Fool Inside Valuerecommendation. Searching for more stellar stocks trading far below their fair value? Get Philip Durell's full list of bargain-priced picks with a free 30-day trial.

Fool contributor Jack Uldrichdidn't read Dante's Inferno in high school and probably won't download a PDF copy, either, but he does own stock in Google. The Fool has a strict disclosure policy. You can Google it.


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