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Google Inc. (Nasdaq: GOOG)

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Android@Home, Project X, and Other Secrets of Google Inc. (Nasdaq: GOOG)

Lately, Google Inc.'s (Nasdaq: GOOG) Mountain View, CA-based headquarters have looked more like the clandestine lair of a Bond villain than a business center.

The company has poured more than $120 million dollars into construction projects that are fit to house testing labs and top-secret initiatives with names like "Project X."

One theory about what's going on at the Googleplex involves the development of a driverless car.

And that may well be true - but the more immediate and practical use for the renovation would be to expand the base from which the company competes with rival Apple Inc. (Nasdaq: AAPL).

Google's war with Apple continues to escalate as the two companies fight for ground in three major consumer markets: mobile devices, Internet search and digital media.

Google fired its first salvo at Apple with the introduction of its Android operating system, which has come to dominate the smartphone market.

Apple recently retaliated by introducing Siri - the voice-activated search engine that has been a major selling point for the latest iPhone.

Still, the biggest clash is set to take place in your living room.

Google and Apple are fighting to be the company that supplies your media at home, stores it for you in a cloud drive, and then distributes it to your wireless devices.

Google has even expressed interest in bringing other appliances into the fold, connecting things like lighting, heating, and air conditioning via the Android operating system - a seamless integration dubbed "Android@Home."

The goal is to let you control every electronic device in your home through a smartphone or tablet.

This is a battle for what futurists call the "digital living room."

And it's just getting started. Here's a sneak peak at what's in store.

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By Downgrading Google Inc. (Nasdaq: GOOG), S&P Gets it Wrong – Again

Standard & Poor's Equity Research downgraded the shares of Google Inc. (Nasdaq: GOOG) from "Buy" to "Sell," saying the merger with Motorola Mobility Holdings Inc. (NYSE: MMI) will likely "negatively impact" Google's growth.

S&P also cut its target price for Google shares to $500 from its earlier target of $700.

Needless to say, we think S&P got it wrong - again. (Don't forget, it was another unit of S&P that downgraded U.S. debt earlier this month. That downgrade, to be really credible, should have been announced several years ago, during the height of the global financial crisis.)

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Why It's Time to Buy Google Inc. (Nasdaq: GOOG)

By announcing its plans to buy Motorola Mobility Holdings Inc. (NYSE: MMI) yesterday (Monday), Google Inc. (Nasdaq: GOOG) is forcing me to make a statement that I never thought I would make: It's time to buy Google.

The $12.5 billion deal will see Google acquire the phone-making half of the Motorola Inc. spin-off that took effect in January. Google is paying $40 a share in cash - about a 63% premium to Motorola Mobility's closing price on Friday. The deal - which Google says will help it "supercharge" its Android smartphone business - will close late this year or early in 2012.

I used to look at Google as the next Microsoft Corp. (Nasdaq: MSFT). But Google has achieved a status that Microsoft shot for - and missed: It's become an online leader and a factor in the everyday life of consumers. Google also has massive growth potential available, and hasn't quit trying to grow.

And that's a good reason - perhaps the best reason - to own Google today and into the future.

Google's purchase of Motorola Mobility will showcase this potential. It positions Google to pair Motorola smartphones with its Android software and compete against iPhone-maker Apple Inc. (Nasdaq: AAPL).

However, Google's new purchase does a lot more than dangle a bigger slice of smartphone market share - and this reason is why I finally decided Google is a "Buy." (**).

Motorola Mobility: All About the Patents

The game-changing benefit for Google in the Motorola Mobility deal is the intellectual property Google is picking up. We are talking about 17,000 patents in this purchase.

A stronger patent portfolio allows Google to reduce royalty costs by using cross-licensing agreements with handset makers. And it protects the Android smartphone market from getting slammed with patent fees (and lawsuits) as sales continue to climb.

The number of Android-software-powered phones jumped 300% last quarter.

Motorola Mobility's patent portfolio will enable Google to move to hardware design for its Android phones. That will give Google both the phone operating system and the intellectual property to act as a gatekeeper in the mobile space.

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New Products and Cheap Shares Mean It's Time to Buy Google Inc. (Nasdaq: GOOG)

Google Inc. (Nasdaq: GOOG) has fumbled some moneymaking initiatives over the past six months, but now it's time I give them credit.

The company finally appears to be on the path toward shaping up its many facets, giving advertisers more reason to promote on the network - and putting more money in Google's fat pockets.

It helps when a company is challenged by a fierce rival or two, and right now Google's getting a motivating push from Facebook Inc. and Microsoft Corp. (Nasdaq: MSFT). I am particularly impressed with Google Plus (Google+), the search giant's new attack on Facebook. It is a rethink of the social web that looks like it could actually gain traction in coming months and years.

There is a huge opportunity in the social web for people who don't quite get Facebook, which is a large percentage of the population over age 25. For my teenage kids, Facebook practically is the Internet. They do all their messaging, e-mailing and photo-sharing there in one great big group hug; what's made available to one friend is made available to all.

But there are hordes of people who would never want to share their lives with all their friends, and compartmentalize their lives between work, neighborhood, old high school buddies and the like. For them, the social media team at Google+ has created the concept of "circles," which allows you to share some photos and links with one group of friends to the exclusion of others. And all of your Google contacts can easily be interwoven into a larger conversation in a way that escapes the confines of instant messaging or e-mail.

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