Google's New Search Features Justify $576 Value

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Trefis) -- Google(GOOG) recently unveiled a few new features related to its search business. These features include voice search for desktop Chrome users, image search on the desktop browser and Instant Pages for faster search results. Google continues to dominate in the search advertising market where it competes with Microsoft(MSFT), Yahoo!(YHOO) and AOL(AOL). Search is the most valuable business for Google, and accounts for about 67% of our $576 price estimate for Google stock.

Our price estimate for Google stock stands about 15% above market price.

Google global search ad market share was around 68% as of 2010, and we expect it to continue to increase. Although Microsoft's Bing has consistently gained share in the U.S. search market over the past year, this has not made a dent in Google's market share. In fact, according to a recent U.S. search market report, Google gained market share while Bing's market share remain constant for the first time since July 2010.

Google has introduced quite a few innovative products in the market over the past year, which includes Google Instant. The recent announcement brings voice search on desktops, which was earlier available on mobile phones. The announcement also includes image search on desktop in which user can upload any image or incorporate an image URL into Google search for the identification of that image.

Finally, the most impressive feature that Google released is the "Instant Pages" feature in which after the user enters the search keyword, the top search result will be ready in the background so that when the user clicks on that link, it will load instantly. According to Google, this feature could save user an average of five seconds.

See our complete analysis for Google.

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