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Google Economist To Gov: Focus On The Present

At Wednesday's Gov 2.0, a conference in Washington D.C. meant to bring the federal government into the digital age, there was much talk about data. It's one of the Obama administration's favorite words. The president and his appointees are fond of telling Americans that the White House is taking a "data-driven" approach to decisions on healthcare, energy, economic recovery and technology policy.

Problem is, the government's track record for gathering, analyzing and sharing data can be spotty. Its estimates were off on how many people would apply for the Cash for Clunkers program. Reports on employment and other economic indicators are typically culled from information weeks old and then revised months later. It's often hard for the average American to find the information they are looking for on government Web sites and make sense of what industrial output or jobless claims means to them.

So organizers of the conference asked Google, the company with the mission to "organize the world's information and make it universally accessible and useful," for some insight on how to do better with data.

In a conversation with Hal Varian, Google's chief economist, the world's largest search engine company said the government should stop looking into the future and try better to understand what's going on now.

Using Google Trends, a tool that analyzes search queries, the firm could see a spike in interest for the Cash for Clunkers program. It was clear to the Mountain View company that demand was likely to surpass the amount of vouchers the federal government had available. A sudden spike in search queries for "real estate agents" in a certain location may also predict a trend toward a home sales recovery in that area.

It's the kind of data analysis that companies like Visa, Mastercard and Wal-Mart are doing now. From the moment someone at a Walmart store brings a T-shirt to the checkout, the company automatically orders more of that shirt. Visa and Mastercard have loads of information on what individuals are buying and are building composite sketches of what consumers demand, Varian said. Last April, Google launched a program called "Predicting the Present" using its tool Google Trends, where the company takes various indicators from search queries to come up with a snapshot on the health of the economy at present.

By Cecilia Kang  |  September 9, 2009; 5:00 PM ET  | Category:  Cecilia Kang
Previous: At Gov 2.0 Conference, Web 2.0 Comes to Washington | Next: House Committee Takes Up Google Books Project

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