When Wall St. researchers make 10-year predictions, it is worth wondering if they have anything better to do with their time. Perhaps they could focus on the next quarter.
Cowen & Co. has decided that Google (GOOG) will end up with a 90% of search market within the next decade. Over Microsoft’s (MSFT) and Yahoo!’s (YHOO) dead bodies.
According to Briefing.com, Google’s large advantages will be an R&D budget that is likely to remain higher than its competitors and a "sustainable advantage in providing more relevant results". The fact that Google can deliver faster results is also viewed as critical.
But, looking out a decade is like wishing on a star. It does not take into account that, at some point, Microsoft will be forced to throw the kind of effort again search and its MSN portal that it is throwing behind Xbox. The world’s largest software company must wound Google to keep it from easily coming after it in the desktop applications business.
It is also very possible that Yahoo! will end up in the hands of a company that is much larger than it is and has more substantial resources to put into R&D whether it affects EPS or not. While that company might be Microsoft, it could also be a large media company which already has a huge stake in the internet like News Corp.
Cowen’s projection reads well, but it is a work of fiction.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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