Monday, July 10, 2006

Google Fund

I predict that Google will buy ETrade or some other brokerage firm. Why? Because Google is a sucker for information, and brokerage firms are sitting on a huge pool of some of the world's most valuable information: live financial instrument trading data.

I'd bet many brains at Google would love to dissect this data this way and that way, correlate it against what people are searching for and writing about in Gmail, Google News, Blogger, GTalk, and the rest of the web, and see what kind of patterns they can reveal.

Some computer-driven "quant" funds have already been outperforming many of human-managed funds. This it strikes me as just the kind of game that Google likes to play: filtering down an ocean of data into a small set of highly relevant results -- in this case, stocks that are expected to have higher returns than the S&P 500.

If I could predict the future, I would be doing my own stock picking right now instead of blogging, but I certainly find it possible that Google will be tempted to throw its mind-boggling data pool, computing power and brain power into the mix to see how well its own analysis would fare against the rest of the industry. Plus, do I see a virtually endless growth opportunity for the Google stock? Well, let's just say it's just slightly bigger than the one created by Google Spreadsheet.

Imagine that in a year or two we'll see the following announcement: Google Funds, Beta.

Would you invest? I think I would :)

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