Many of you had some interesting reactions and comments to this prior post. Thanks for your comments. Let me try and explain why I believe this will happen in one form or another in the next 3-4 years. Many of you have stated that Google can’t afford Apple as the market cap is too big for them to swallow today. True. But it’s not today I am talking about. 3 years on the web is like 21 years on the planet (web years and dog years are nearly equivalent). First, as you know things change rapidly on the net faster than anywhere else. Google MAY be able to grab the rest or nearly 100% of the market share in search over the next 3 years – and that share will increase their value (and market cap) tremendously. To do this, they will not need any hardware, nor will they need to introduce any gadgets/phones, what not. Its 100% software driven. And, given that the web will have an increasing percentage of ‘vertical’ search (vs. the Wal-Mart Google engine of today), Google will also begin to focus its sights on those verticals as well with its huge pile of cash. Google will buy their way into any search vertical they might miss. And that doesn’t take into account non-web advertising like billboards, radio, newspapers and traditional TV +. Now, let’s look at Apple. The market for cell phones is in a state of flux. How many iPhones can one buy? Saturation will occur and sales will eventually have to slow. Competition will appear and market share will s-l-o-w down and decrease over time. When Jobs makes the iPhone carrier-neutral, the walls all come down. So, how do you ‘sell’ more cell phones to people that they don’t need? One possibility is to give them away with advertising. Second, while ‘Goople’ may seem far-fetched to us today, lacing cell phones with ads (think Android) AND perhaps computers with ads or instead of buying an office suite from MS, using GoogleDocs with ads instead to help increase market share over the PC doesn’t seem so far-fetched anymore. Would I choose to use a cell service that gave me a free handset combined with no monthly charges in exchange for watching a few ads? Could I and would I use that combination to replace my land-line eventually thereby sneaking this combination right into everyone homes? Would I choose to get a free laptop that does the same type of thing? I might. Would developing countries whose cultures don’t have the money to buy computers and cell communications use such a computer or cell phone? I bet they would.
The same way Apple introduced their new thin laptop without the traditional bells and whistles of all other laptops sounds so much like what Google did when they introduced Search and Adwords, then slowly but surely introduced itself into other traditional media, while their competitors just scramble around to keep up, and can’t so far. And finally, a merger or some combination of the two is not unthinkable. Both company cultures are similar in so many ways. So, think a new form or type of combination or new venture between the two. Maybe not an outright purchase NOW, but its not impossible in the future.