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At These Prices, Are Google Buyers Looking Through Rose-Colored Goggles?

Is it April 1 already?

A story in the Los Angeles Times on Thursday notes the introduction of Google Goggles, the latest bright, or otherwise, idea from the Internet search juggernaut. It's a program that allows users to point their smart phones at an object, take a photo of it and, some seconds later, receive information about the object through Google's usual search technology.

The program still has a few bugs. One of its purported abilities is to identify a building that an inquisitive user is in front of, but it unhelpfully told the reporter that Los Angeles City Hall was Magic Mountain, an amusement park an hour's drive up the freeway.

But let's say it worked perfectly. What's the point of having an ability to search for something when we're staring right at it? It seems like a 21st century, ubertech equivalent of looking for our glasses when they're on top of our heads.

Technology companies have a habit of creating new systems, programs and procedures and only then trying to figure out why customers might want to use them - invention as the mother of necessity.

The Times reporter, echoing popular sentiment, jokes that Google is heading toward global domination and that Goggles is one step along that path. Google may indeed rule the world one day, but that doesn't mean there's all that much profit in it.

At a shade under $600 a share, the company's stock is close to a high for the year and not all that far from its all-time high reached in 2007. Its valuation of nearly 40 times earnings is twice the level of the broad market.

Google has added some interesting items to its repertoire lately, including mobile phones run on its Android operating system, but the company is still almost all about search. As Goggles suggests, there may be only so many practical, commercially viable ways to exploit it. As for its longer established search activities, the company controls nearly 70 percent of the market, which leaves only 30 percent to go.

Google has been an astounding growth story for the last decade, but it's hard to see how it will keep expanding at a similar pace for the next decade.

As Microsoft has made clear and AOL before it, today's hot tech stock can quickly become tomorrow's lukewarm utility. If and when investors start to view Google that way, it won't trade for anything like its present valuation.

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