Social Machinery

Google launched a new GPS navigation system for cars (launching Google Maps Navigation) that will work for any Android 2.0 enabled device and will include 3D views, voice navigation among other interesting features.

Right after Google announced this new service, shares from Garmin and TomTom literally crashed on stock markets. From a market point of view the message was clear: Google changed the game again by creating a better service and for free!

Shares price from Garmin went down 16.38% on Nasdaq index, meanwhile TomTom shares price plunged 20.8% on Amsterdam stock exchange. The picture above shows the dramatic situation. You can also follow their share on real time here.

The Outlook for both companies looks extremely complex. In the case of TomTom, their main business is focused on selling maps, where Google is becoming a powerful player including innovation like Street view. But the main problem is while TomTom charge between 50USD to 100USD for their applications (e.g. Iphone), Google mobile navigation system will be free.

Garmin case is slightly different but as challenging as TomTom. Their business is focus on selling PND and GPS devices for consumer and business segments. The problem in their case is that with Google Navigation application any device supporting Android 2.0 could use it. Again, the convergence between devices is making their case more and more questionable.

If there is something clear is that you don’t want to mess with Google…