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The "Creeping Googlization" Meme

By - December 16, 2003

Alex Salkever of Businessweek gives Google an interesting business model once over, leading with a scenario in 2006 where Google runs just about everything web-related. He introduces the term “Googlization” – which I take means the creeping (his word) dominance of Google over nearly all forms of informational commerce on the web.

Salkever points out that all the new features Google is adding end up stealing traffic and revenue from other companies, starting with the example of Google’s new ability to track FedEx packages:

“Perhaps more important, Google is providing this new shipment tracking service even though it doesn’t have a partnership with FedEx. Rather, Google engineers have reprogrammed it to query FedEx directly with the information a user enters and provide the hyperlink direct to the customer’s information.
No doubt, this is an ingenious way to keep people at Google longer. By extension, the search giant can create more online real estate to sell ads on. But with every new service, Google takes a slice of someone else’s pie. Its ability to find pizza places within any given Zip code ultimately eliminates the use of YellowPages. Using it to find word definitions diminishes the business proposition of online dictionaries.”

What’s interesting here are the assumptions regarding Google’s motivations – that the company is entirely motivated by the desire to garner more “real estate” against which it can sell ads. A reasonable assumption for a business magazine to make – that a company is being driven by the motivation to make more money. But that’s quite distinct from what folks at Google state they are doing – leveraging searchable data to make a consumer’s life easier. “Can’t the two co-exist?” I can almost hear them asking. “Doesn’t one (profits) follow from the other (helping consumers with a great service)?”

Well, yes, and with AdWords, certainly that was the case. But Salkever further paints an interesting scenario in which Google decides to add a feature where users type in “movies” and their zip code, then get Moviefone.com’s results. He concludes:

“Google wouldn’t really need to ask MovieFone’s permission because the service is publicly available and easy to program into Google in the same manner as the FedEx service.
Yes, such a Google service would probably mean extra traffic for MovieFone.com. And that would be good for MovieFone, right? Perhaps not. The interaction takes from MovieFone at least one prime advertising asset, the usual initial visit to MovieFone’s home page, and instead awards that impression to Google. That’s because the movie-listing seeker will skip right to the MovieFone hyperlink with their Zip-code-specific information. And as more traffic arrives from Google, that would give it more leverage to ask MovieFone for a referral fee. That’s not hard to envision if Google become a public company with a responsibility to, above all, boost profits.”

But as seductive as the reasoning is, I don’t think Google will sell referrals. Google will think twice, and maybe more than twice, about implementing such a business practice. That would make them a player in the buying and selling of pure intent – as opposed to the paid intent they so assiduously separate from their natural search results. Therein lies a significant conflict. Imagine if they did try to sell those referrals to Moviefone, and Moviefone told them to pound sand. Now what would they do – cancel the service? Keep the service but route the traffic to a different movie service, one that was willing to pay them (or pay them more)? Remember, this is within their pure, untainted-by-commerce natural search results. Maybe MSN would cut a deal like that, but such a scenario feels distinctly “unGoogly” to me. Google’s entire reputation is staked on the purity of their search results.

I also don’t buy into the idea that Google, or any portal, will become a consumer’s sole point of entry and/or query to the web. First of all, there’s too much context loss. Consumers like to have context surrounding their interactions with specific services. Second, there’s syntax overload. It’s amazing how powerful Google and other engines are, but more than 95% of all searches never take advantage of advanced search features. I don’t want to have to remember the right syntax to get movies for my zip code, or to type in a particular syntax to get my Fed Ex package. Dedicated sites do this for me in an intuitive way with immediate options in case I get confused. Third, as a competitive differentiator, it’s relatively easy to copy – Yahoo, MSN, and anyone else could add these features quickly if they started to gain traction. And lastly, if Google does become a standard referrer, Moviefone and others would simply have to adapt – it’s not the first time content sites have depended on portals for referrals, and fought with them about who is delivering the true value to the consumer. It’s AOL in 1994, Netscape in 1996, and Yahoo in 1998 all over again. The web will endure.

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5 thoughts on “The "Creeping Googlization" Meme

  1. tim says:

    While I think the referrals issue is interesting to ponder as a “slippery slope”, the writer’s fedex and moviefone arguments are unfounded.

    The Fedex functionality, along with UPS and the USPS, is driven by those companies’ adoption of open Web-based APIs — for the primary benefit of the world’s online stores. Everyone, everyone, everyone can use them.

    As for moviefone losing a page view, how is that different than every other online search? What I want to know is this: would my bookmarking of that page be a bad thing for moviefone?

  2. John, I disagree with your contentions on several points.

    First, I am doubtful of Google’s ability to remain so “pure” after the IPO. They will have effectively lost control of the company and will, to a degree, be at the whims of Wall Street investors. Of course, they might do a class of preferred stock to let Larry and Sergey keep control but that’s not a heck of a succession strategy. Public companies are very different, as you well know. Sure, they try to balance long-term reputation with short-term gains. But few face the same kind of conflict in that area that Google faces. I respect Larry and Sergey for trying to do this. But I believe that many investors would not be so patient. Tanking stock affects a company in myriad ways, few of them good. Between the devil and the deep blue see, they’d have to take the devil or really risk losing control of the company.

    Second, Yahoo! and MSN could not replicate this extension strategy easily. They have chosen another course and can’t go back. They try to keep the content on their own site and partner deals that way. To change that model wholesale would be excruciatingly painful. They would have to unwind vast numbers of deals and explain to partners that, in fact, the way that the partner had originally wanted to do it was a better idea.

    Third, I disagree with your context assertion. The trouble with the Web is it provides so little context. Take Moviefone. The average user may or may not remember the name correctly. Or if they live in New York City they may run into the reality that a lot of cinemas there are not in the Moviefone system. Or they may punch movie times into Yahoo and see a bunch of stuff on the page but perhaps not realize they can simply enter their zip code in the top box for movie times. There are too many variables. What Google has done very well and others have not done is reduce variables to the greatest degree possible.

    I do agree with what you say about Google trying to sell referals. I meant that more as a hypothetical and as a definite temptation. Their whole cachet to date is in not selling referrals or not “selling out”. Again, that will be harder to maintain when they go public. All IMHO.

  3. Hey Alex, thanks for commenting. I think if Yahoo et al see the wind blowing one way, they’ll go that way. It’s happened again and again in this young business. Whereever there is more money (or strategic advantage), they’ll go. The difference being they’ll do a deal where they in fact DO sell referrals, as they are already (essentially) in that business.
    The question of the IPO and its effect on the Googlopoly is a very very central one, and I respect your opinions on that. But I think they have a rasonable claim of differentiation based on the “purity” play, and will maintain that distance for as long as they can.

  4. Alex Salkever says:

    It will certainly be an interesting quarter around this. Google is starting to look more and more like a portal. They introduced a raft of new services similar to the ones I wrote about — flight number search, zip code maps, etc. And if the Reuters rumor of Web mail turns out to be true, then chalk that up. At the same time, new entries keep coming at them offering AdWords types of functionality for less money. With Yahoo! shortly bailing and MSN coming out with a similar game, I can only imagine margins will start to take a big hit in the next six months. Should that happen, the pressure on Google to do something else to make money would become enormous. I am looking forward to your book.

    Alex

  5. Sarah says:

    Though experts may argue over whether the googlization of the world is a good or bad process, it is honest to say that most people want it to happen (though this desire maybe unconscious). People want all aspects of their life (including the Internet) to be easy. People are also creatures of habbit. The key to both the success of companies like AOL and Yahoo is the fact that people find it easy to stay on a page that is familar to them. It is easy. It is comfortable. Most people don’t know how to use anything else. Why should they go anywhere else?

    Googles advantage is that they have a better search feature. Yahoo and AOL customers that sneak over to search on Google might stay if the features of the other sites are present at Google too. In the past month alone, I have noticed a huge increase of email addresses that have the gmail ending on them. This shows that people are already migrating over to Google.

    Where will this lead? Microsoft’s Operating System dominates computers. This will never change. The fringe complains but the mostly computer illerate users of the world are happy to only have one choice. The same will eventually happen will Search. The biggest company will slowly wipe out everyone else. People won’t complain that Google is the only search engine as long as it is easy to use, comfortable and popular. Like everything in the consumer world, using what is popular is more important than using what is small and unknown.

    Thanks, Sarah
    http://www.googlization.com

    PS
    Why do I add AOL to the list of Yahoo and Google. I watch people. I am outside of the expert community (which gives me the advantage of not having preprogrammed opinions fed into me by whatever agenda I am representing). I just watch how people (family, friends, fellow students, etc…) use their computers and the Internet. Most of these people don’t even realize the difference between AOL and the Internet at large. Everything is done within the AOL universe. I see people typing domain names into the AOL search box and wondering why the site doesn’t show up, assuming that it doesn’t exist and then going to some other site with similar services. That’s power to control the flow of commerce. If Google can get these same people to stay in the Google universe, not only will Google eventually wipe out the other search engines and services, most people won’t understand that there is a difference between Google and the Internet. They will become one, syonymous. The googlization of the cyberworld will then be complete.