  Web search data are a valuable source of business and economic information.
Previous studies have utilized Google Trends web search data for economic
forecasting. We expand this work by providing algorithms to combine and
aggregate search volume data, so that the resulting data is both consistent
over time and consistent between data series. We give a brand equity example,
where Google Trends is used to analyze shopping data for 100 top ranked brands
and these data are used to nowcast economic variables. We describe the
importance of out of sample prediction and show how principal component
analysis (PCA) can be used to improve the signal to noise ratio and prevent
overfitting in nowcasting models. We give a finance example, where exploratory
data analysis and classification is used to analyze the relationship between
Google Trends searches and stock prices.
