When Google (NASDAQ:GOOG) was singled out as a ghoulish Trick for our readers back in 2004, it was but a toddler in the market. The IPO was only a few months old, and neither the market nor analysts at the Fool and elsewhere had figured out quite what to make of the youngling yet. They were all blind to the tangy treats Google was dangling right in front of them.

Here we are, two years later, and lots of people still don't get it. "Look at the valuation! Google can't possibly be worth that much!" they say. And: "Nothing built on online advertising revenues alone could possibly stand the test of time!"

Those two arguments go hand in hand, and if you believe in the second one, the first will probably follow. But there are a couple of fallacies involved. The first is assuming that Google will always live exclusively off Web ads. If that were the case, competitors such as Yahoo! (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT), and IAC/InterActiveCorp (NASDAQ:IACI) would have a chance to steal Google's lunch simply by getting better at advertising. And they are trying hard, rolling out a parade of copycat services modeled after Google's AdSense and AdWords cash cows, but none have so far made a serious dent in the big G.

If or when they do, the game still isn't over for Google. You see, it is all about advertising, but it's not all online marketing. Did you notice when the company bought a radio advertising outfit last winter? Or when Google job listings started asking for traditional media skills? The company wants to build "the world's premier IP-based radio media network" and intends to arrive at "the intersection of Internet and television technologies, video-on-demand, personal video recorders, and emergence of next-generation set-top-boxes with IP connectivity." If that sounds a lot like Cisco's desire to run the show in your living room, well, it is. It's just that Google's plan goes a few steps further.

You know that cornucopia of corny services Google keeps adding to? Spreadsheets, financial information, personalized portals, Gmail? The list goes on and on. Almost all of them have one thing in common: "Sign up for a Google ID!" That login stays with you throughout the whole carnival of Googlish tools. It collects data about your online habits, and the services act as a giant funnel that pulls more users into that sinister web of information gathering.

What Google is really good at is presenting relevant advertising to you, based on all of that collected data. Get enough people to sign up for the collection process, and it could develop some sort of direct interface with your TV set. Google could certainly buy TiVo (NASDAQ:TIVO) these days, for example.

Get the national television audience to sign in to their Google accounts on that digital cable box, or digital video recorder, or directly into the TV set, and companies like Coca-Cola (NYSE:KO) or Ford (NYSE:F) would fall all over themselves to get their ad campaigns supremely targeted to the best possible audience. That's where the real money will start to flow. TV advertising is a $70 billion industry today, in the U.S. alone, and more efficient marketing would be worth even more. It would increase the size of the pie. And Google is hungry.

It's still a few years away, but the online advertising arm is holding things up in the meantime, continually stumping Wall Street's analysts with stunning report after stunning report. "People forget, even inside our company, that the online model that is working so very well for us today took a couple of years to get really right," says CEO Eric Schmidt. "My guess is that for each of these new major media initiatives, we'll have a few cycles of trying to find the right combination that really takes off."

I'm happy to wait a bit for my treat. But I'd better stop writing about the company so I can buy some stock, because those shares may never look this cheap again. Come hither, sweet chocolate ...

Further Foolishness:

TiVo and Yahoo! are Motley Fool Stock Advisor recommendations, and both Microsoft and Coca-Cola are Inside Value picks. Try a 30-day free trial to either service, or both, to see whether they fit your investing style. Try out Stock Advisor today, and we'll send you a free market report.

Fool contributor Anders Bylund is a Coca-Cola shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like. If you want a real fright, go ahead and Google "Zahrim." That's right -- Google is a verb . Foolish disclosure isn't scary -- it's good for you.

The Motley Ghoul's Tricks or Treats represents the opinions of each Fool only and should in no way be taken as the opinion of either The Motley Fool, Inc., or any company in question, or as representative of anyone or anything other than that specific Fool's thoughts. So do your homework, and review The Motley Fool's disclosure policy .

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.