The Guy Who Has the Most Data, Wins

Guild Investment Management  |

Recently, we read in the New York Times Magazine an extensive rundown of the internet map wars and their critical significance (you can find the very interesting entire original article here). The article paints a broad picture of the development of the internet in terms of its use to answer questions: what, who, and where. The race to answer what was won by Google’s (GOOG) search algorithms. Facebook (FB) has a commanding lead in who, although its dominance is less than full spectrum -- with the likes of Twitter (TWTR) and LinkedIn (LNKD) providing alternative orientations.

But the critically important question is the one that knits all the data together, making the world a giant interface in which your smartphone is a cursor. That question is where, and although Google’s fantastic (and some say fanatical) expenditures have given it a commanding lead, it’s not a lead without challengers.

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We’ve written in this letter before about the emergence of the “internet of things,” a world in which ubiquitous broadband connectivity ties together all the devices of daily life, down to the most humble. That internet of things demands a map. In a sense, the internet is itself becoming a universal global operating system -- and “location awareness” in all its forms is and will continue to be one of its most important functions.

When Google began creating Google Maps, it didn’t realize the significance of the data it was compiling. It wasn’t until the first third-party sites began leapfrogging from Maps to their own applications that Google began to see what it had started. By allowing programmers access to the Maps data, Google jumpstarted an entire ecosystem, which has now grown into a grandiose attempt to compile street-level views of the entire planet. And beyond that, Google will soon be launching Tactile, which will offer not just street views, but navigable 3D models of buildings and neighborhoods -- the next step in the rendering of a virtual model of the globe.

Even though compiling the data has been tremendously expensive, this location awareness, like most of Google’s proprietary data, will very likely to turn out to be a wise and extremely profitable investment for the company. There are competitors waiting in the wings -- including the confident, open-source OpenStreetMap. But for now, Google is winning the where war. It has already won the what war as most people google information rather than use another search engine.

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