Predictions, like resolutions, tend to flourish at the turn of the year, then get knocked down one by one as the year goes on. Unlike resolutions, however, predictions aren't necessarily grounded in hope but rather on observations of reality that are extrapolated out to the coming months.

That's what makes the better predictions so compelling -- they call attention to event-shaping trends as we head into uncharted, even uncertain, waters. So, adding to the predictions I handicapped recently, here are more that add up to an intriguing year in 2007:

John Battelle, founder of Federated Media Publishing: "Thanks to Google's ( GOOG) dominance in search and media and a complacent Justice Department, Microsoft ( MSFT) will buy a better position in online media."

Chances: 50%.

Battelle's predictions are always a good read because he's willing to go so far out on a limb with details. (Disclosure: He's an ex-employer of mine.)

Rather than simply predicting Internet merger mania, a safe but bland view, he sees Microsoft buying Yahoo! ( YHOO), IAC/InterActiveCorp ( IACI) or Time Warner's ( TWX) America Online, and MSN chief Steve Berkowitz running Microsoft's resulting media empire. "If Microsoft does not buy AOL, Yahoo! will, and failing that, AOL will go public, but the IPO will receive a lukewarm review," Battelle wrote.

Microsoft is certainly in a position to buy big names. And AOL is very likely to be in play, even if its brand has been somewhat tarnished in recent years. If Internet stocks drop significantly during 2007, the chances of these scenarios playing out will increase correspondingly.


Ross Mayfield, CEO of SocialText: "DRM will become a mainstream issue."

Chances: 65%.

DRM, or digital rights management, is on its way to becoming a significant barrier to widespread consumer adoption of downloaded music and video. Mainstream consumers are willing in principle to put up with minor inconveniences so that major labels can prevent copyright piracy, but the inconveniences are getting more troublesome.

Sony ( SNE) weathered a brand-damaging scandal when the DRM software on its CDs exposed computers to viruses and prompted a major recall. Consumers have balked at DRM-ware from Amazon.com ( AMZN) and TiVo ( TIVO) that automatically deletes programs from users' hardware.

The DRM debate may go mainstream in 2007 as Microsoft's Vista operating software becomes more common. Microsoft's approach to DRM has been the most comprehensive and considered to date, but if bugs appear in Vista tied to DRM code, the consumer backlash could begin.


Mark Anderson, editor of stock newsletter Strategic News Service: "The year of the Flash Wars."

Chances: 60%.

Anderson starts off by noting that there are 17 new chip fabrication plants beginning production this year, and most of them are planning to churn out flash memory chips, used in everything from memory cards to iPod Nanos.

"This means flash memory prices take a dive, flash-based computers take hold, and everything that can use memory will, and more of it," Anderson writes. "This alone will help to fuel a new explosion in consumer electronics, just when some thought it was taking a pause, with the result of pulling up sales for other chip and component makers, etc."

My handicapping of Anderson's prediction is a little low because of the inherently unpredictable nature of chip supply and demand. But if true, his could be one of the most far-reaching predictions in terms of impact.


Rob Enderle, analyst, Enderle Group: "Virtual worlds become real."

Chances: 10%.

Virtual worlds such as Second Life are to 2006 what podcasting was to 2005: a technology receiving undue press coverage as the next big thing, prompting many to check it out only to find it's not for them. Second Life is very real to a small group of people; the rest of us will find that the old-fashioned world remains much more interesting.

Most of the activities on Second Life center around vices: sex, gambling, corporate branding. Someday, somebody will create a more compelling virtual world that resembles the "metaverse" that Neal Stephenson described in Snow Crash. But it's not going to happen in 2007.


Wired News Staff: "Google stock hits $1,000 per share."

Chances: 1%.

The good folks at Wired News (another ex-employer) get major points for boldness, but let's look at what this prediction means: Google closed 2006 at $460.48, so a run to $1,000 requires a 117% jump.

It took three months for Google to double to $200 from $100, and another year for it to double again to $400. In the 13 months since then, Google has moved pretty much sideways. That flagging pace reflects economies of scale, which say another doubling in the next 12 months is very unlikely.

The market values Google at $140 billion. To get to $1,000, investors will have to pour in another $165 billion -- not exactly spare change. That would give the stock a 2007 price-to-earnings ratio of 73, which is high -- even for Google.

If video ads start to gain traction in 2007, Google could again blow away everyone's expectations, easily topping the $600 price targets set by many analysts. The $1,000 mark could be reached in time, but not in 12 months. Of course, it could happen overnight through a reverse stock split, but that would be even more surprising.

RealMoney Barometer Poll

1 What would best describe your stance heading into the coming week of trading?
Bullish
Bearish
Neutral
2 Which of these sectors do you think is set to move up in the coming week?
3 Which of these sectors do you think is set to move down in the coming week?

View the results without voting

More from Technology

Amazon, Microsoft and Google Face Backlash over ICE, Military Deals

Amazon, Microsoft and Google Face Backlash over ICE, Military Deals

As Intel Loses Its CEO, How Well Can It Compete Against Nvidia?

As Intel Loses Its CEO, How Well Can It Compete Against Nvidia?

3 Great Stock Market Sectors Millennials Should Invest In

3 Great Stock Market Sectors Millennials Should Invest In

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists