Google gives Immersive another boost
“Google launched Street View images for four additional U.S. cities [yesterday] (Orlando, Los Angeles, San Diego and Houston). We believe that Google licensed the data for three of these four cities from IMC.
Immersive Media has developed an end-to-end spherical video recording solution, including hardware, software and services. The company began collecting video of major North American cities just over a year ago. IMC has mapped spherical video of at least 35 major
cities across North America under its GeoImmersive City Data project. On May 29, Google (GOOG-Q; not covered) announced the launch of its new “Street View” service using licensed video images from IMC.
Google purchases additional data from IMC. Google initially launched its Street View feature on Google Maps with images from five cities. Data from four cities was licensed from IMC and one city was captured with what we now believe to be an in-house solution using multiple off-the-shelf cameras. Since then, we have learned that Google may be acquiring its own street-level images through the use of a competing camera (Point Grey Research’s Ladybug2 solution) and a fleet of two dozen cars. We highlighted this development last week and lowered our revenue forecast based on the increased uncertainty surrounding Google’s street-level data acquisition plans.
Today, Google launched four more cities, three of which we believe were licensed from IMC. Of the four new cities, it appears that Google captured the images of San Diego in-house. In our financial model, we assume that each large city has about 1,000 miles of images. Based on today’s launch of three additional cities using IMC’s images, we would estimate additional data sales of about 3,000 miles by IMC (this is what we already assumed in our lowered estimates for
the September quarter).
IMC has many more miles of data to monetize. IMC has collected street-level images for at least 35 major cities across North America and is also collecting data in Europe. We continue to believe the company will be able to sell this data to either Google or a competing Internet mapping vendor (e.g., Mapquest, Ask, Yahoo! [YHOO-Q, not covered]). We continue to monitor developments around Google’s data acquisition plans and the potential impact on IMC’s opportunity to monetize its database. Google may well continue to purchase IMC’s data while also collecting some of its own, which could lead to our recently lowered revenue forecast as being conservative. We are not altering our financial forecast at this time.
This is a positive development in that it demonstrates that Google has continued to license data from IMC even though, we believe, it is collecting some of its own street-level images. We maintain our SPECULATIVE BUY rating and our one-year target price of $5.50 per share.”
It isn’t totally clear how long Immersive can enjoy the ride should Google decide to do it themselves, but even Google can’t collect street level views in hundreds of relevant urban centres as fast as they might like. In the meantime, firms such as Immersive should be able to bask in the sun.