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.