Google Maps: the giant sleeps.

Update: 11/10 — Not surprisingly Facebook seems to have out-executed Google to market on big parts of this.

Alphabet (née Alphabet) has some great $-churning businesses: Search/Adwords, Display/Adsense, and YouTube. Diane Green’s cloud effortsWaymo, and DeepMind most often get labeled as the “next initiative likely to turn major.” But what about Google Maps? I’m long Google’s stock and see a lot of potential, that in short order, Maps can be a cash and engagement machine with tremendous strategic value to the rest of Alphabet.

First, I want to create the Google Maps “value stack”:

NAVIGATION
LOCAL STUFF FINDER
TRANSPORTATION
SOCIAL
TRIPS

  1. Navigation: Think Waze. It’s the driving directions and all that fun stuff that comes out of the data (alternative routes based on volume, accident notifications, etc).
  2. Local Stuff Finder: Think Yelp, FourSquare. Search is the core-competency of the company, and local search is naturally at home on a map. Gathering and presenting the data to easily find and make decisions on where to go. Everything from which coffee shop, dinner spot, or retail outlet to choose.
  3. Transportation: Think CityMapper. It’s a combination of pulling in the local transit options (train, bus, bike sharing) and marketplace for e-hail (uber, lyft).
  4. Social: Think Find My Friends, Facebook. Location sharing and status, finding events to go to (Google is pretty good at indexing) + seeing who is interested/attending, and opinion prompts to friends on a location you’re considering — both of which tie to #2.
  5. Trips: Think Google Flights/Kayak. Current interface works as a search for flight selection and then lends itself to navigating destination via map to book accommodation, suggested dining options to try, locations of interest for trip, friends addresses on map, etc.

#1 is obvious and Google already does a great job. In fact they own two great products — Waze and Google Maps. Not much to say here. Great job, Google.

#2 Google has invested here and they’re iterating to get better fit here. An additional area of expansion would be: retail. As Google tries to compete with Amazon (to stem the loss of product search…), an interesting approach might be specific product search that produces the physical local outlets to buy. I’m not sure about the technical implementation here (through POS integrations, photos (using ML product categorization), or some kind of OCR of supplier invoices?) but there’s a class of items (retail goods, food items, events, classes) that would benefit from a more granular search on a local level. The monetization potential here is 10/10 (the standard search model of featured relevant placement and pay for performance).

#3 It’s becoming something of new gospel that e-hail will be commoditized. The front end for directing demand could then capture a non-trivial amount in that value equation. While Google already offers a version of this they can prime this pump by improving all the local transit options. CityMapper is the platonic ideal of this. By building the habit of turning to it to check on availability of Citibikes, real-time MTA schedules, etc — it’s a natural transition from there to booking your Waymo (hello, Alphabet cousin!), or getting Uber to pay you a commission. I’d bet there’s real money in owning origination of trips however the future of transport nets out.

#4 Similar to Google Photos offering a natural place to start to build social interactions, Google Map’s “Share my Location” is a great start. It’s not hard to see how it can go from here to declaring interest (getting a drink post 5 today within a mile of where I am, interested in this concert, etc) or seeing which friend has been to a local place and pinging them w/a question. Google is the advertising money machine, and social data can be uber-valuable in building richer targeting profiles.

#5 is integrating/collapsing Google Flights/Trips into Maps. Through gmail/calendar, the details of my conference agenda and such can be automatically placed on to the map. Quick glance at the map can show me where I need to be at different times and ML can suggest places to go for food/drinks/coffee/etc that are efficient given where I’ll be and where I’ll be going. Since so much of this is lead generation, it’s another 10/10 for monetization potential. Nifty auto-generated trip itineraries are part of a few apps already, the natural home for them would be within a data-rich source like Google Maps.

“Where should I go and how do I get there?” is a natural fit and a deeply valuable place to be. More importantly it’s an obvious area for Google to double-down on within Maps given the massive investments the company has already made in the mapping stack, self-driving tech, local search/reviews/data, airfare/planning, and machine-learning. Google Maps locking down my interest graph, travel patterns, and tastes will allow it to serve as the de facto personalized remote control for the world around their users. That’s a multi-billion dollar business inside of a few years.

It’s Maps, Google Cloud, and their lead(?) in machine-learning that make me incredibly bullish on the company and the stock. I recently trimmed my Apple position in half (still bullish there, too!) and tripled-down on Google. I believe Facebook/Google will continue to consolidate ad share. ML-advances will help them optimize ad yields in the short-term. YouTube will help them continue to win as video ad dollars shift online. In the medium term I expect Cloud, Maps, and some wild cards to spring to life with new revenue streams.

When Morgan Stanley predicted Waymo could be worth $70 billion (!), I was a bit flabbergasted that the much closer-in Maps isn’t recognized for what’s about to come online.

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