Google – the new stock exchange

The web is a weird beast. All this computing power both CPUs and human minds working away in their own little worlds and yet at the same time adding more and more to the huge database that is the Internet.

At the centre of this combined knowledge sits the most powerful company off all time, Google. The knowledge they have of people’s online behaviour is incredibly deep and rich and yet they can’t use this info for any marketing purposes.

However, this incredible data that they have at their disposal could be used to give them a leg up in the stock market in the same way that a hedge fund analyses lots of data to provide an insight into the market. Funnily enough a company called Monitor110 is already analysing internet buzz to find trends in online activity.

“In time, the platform could lend itself to trading strategies dependent on computer-driven models feeding off measures of online activity, according to Monitor110 president and chief operating officer Roger Ehrenberg.”

So will Google follow suit and dig into their huge database? Greg Yardley thinks they might:

“If I were working at Google, I’d have a couple developers and statisticians looking at their query data right now, trying to see if they use that massive database to predict changes in the market. I doubt you’d be able to predict future movement up or down, but you could measure changes in interest level and through them perhaps predict future volatility – and you can trade volatility pretty easily in the options market by going long or short on an at-the-money straddle.”