Google Domestic Trends: Should You Invest Based On Google Searches?
September 3, 2009 ·Filed Under Technology News
Google has launched a new area of Google Finance called “Google Domestic Trends.” Basically, it allows you to look at various sectors of the U.S. economy based on how they are performing in Google’s search index. The concept is that the volume of searches for related queries to a specific segment may “supply rare economic insight,” says Google.
That’s an interesting view, but does is it actually smart to invest based on one search engine’s input? Google has a few compelling examples for why it could be.
Take a look at the retail sales chart below for the past couple of years. As you can see, the results predicted with the Google Retail Index is clearly closer next the predictions made without it. For a while it looks like the notes is only marginally closer, but starting in 2009, it’s clear that the input is much closer to the actual results.
This isn’t the first moment Google has wondered whether its search index could predict economic activity. Back in April, it wrote about it on its research blog. But it’s interesting now that it clearly feels comfortable adequate with the results of the details, that it’s featuring it on its Finance site.
The actual details Google provides is rather open-ended. For each of the sectors, you
Google continues to revamp its Finance site to manufacture it more useful compared to its more widely-used competitors. goods is the key for all of that, so it’s probably a good view to at least put it out there and see whether investors are interested in seeing that. Other companies like StockTwits are already proving that there’s an appetitive for some less than conventional means of investing.
As Gordon Gekko says in Wall Street, “The most valuable commodity I know of is data.”
[photo: flickr/artemuestra]
[Thanks Michael for reminding us of the Gekko quote]
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