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J. Botter seeded an article from Forbes with an analyst's prediction that Google is developing a competitor to Apple's iTunes. The Bear Sterns analyst says:
"We would expect Google to rollout a Beta service within 3 to 6 months. We note that Google has not confirmed our expectations, and that our thinking is based on Mosaic theory," said [analyst Robert] Peck.* "However, we do think this fits with Google's recent moves and its ultimate goal of organizing the world's information."
Sounds impressive, what with the "Mosaic Theory" and all. Well turns out Mosaic Theory is just a fancy term for speculation by analysts who are trying to avoid being accused of insider trading:
The mosaic theory has come to describe the process by which an analyst may use a significant conclusion derived from perceptive analysis of public information and non-material, non-public information as the basis of a securities recommendation or transaction.
Well, here's my perceptive analysis of this:
- From what I've seen in my visits, Google Video isn't going after the same market as most other online video providers -- especially not Apple. They're mainly indexing and hosting clips from the net, independent films, quirky home movies, viral videos, etc. and allowing the creators and owners of the content to price it and sell it or give it away, with or without DRM. Much more similar to YouTube and iFilm with commerce. Sure, they've got agreements with NBA and Charlie Rose, (and McGyver, too!) but that's the tiniest portion of their content.
- If -- and its a big if -- they're going into the online music distribution business, wouldn't it be more likely that they're going to take the same approach? Look at all the bands on MySpace. They could sell their music, song by song through a Google music store, with or without DRM.
- The likelihood of Google negotiating content distribution agreements with all the major and independent music labels is very small. I mean, look at how they decided to negotiate with publishers for Google Print: they didn't! Considering that the music industry is much more tight-fisted about their content than the book industry ever will be, they're not going to appreciate Google's "let 'em sue me" attitude.
So there's my perceptive (or not) analysis based on "HodgePodge Theory". What do you think?
*This is the same analyst who's been touting the mysterious Google Cubes which Google denies the existence of, and basing his $550 target price for Google on that info. Wouldn't it be nice for him if the gTunes rumor were correct!
