This post is the concluding post in my analysis & critique of Google's Strategy. I had written 2 posts earlier which were: Google's Strategy Anyone? and Why eBay Inc. is worried about Google
In my first post Google's Strategy Anyone? I had stated:
Strategy is about what you choose to do and equally importantly about what you don't choose to do. Strategy means choice says Peter Lorange of IMD. Unfortunately for Google (GOOG) "Organizing the world's information" has come to mean choosing to quite literally cover the activities of the whole world of software providers and users!
The fundamental flaw in Google's moves in building content and commerce related online properties (e.g. Google News, Google Finance, Google Base etc.) is that Search is a horizontal technology. Google has positioned itself as a Web Search Engine and pitched for Search Advertising dollars from the rest of the world. Thus it is natural that large or small eCommerce players would get nervous if Google starts businesses that would either directly compete or substitute their own offerings.
Why should an eCommerce or Content pay Google Search Ad dollars if Google at some point could potentially redirect all the traffic to its own properites. Since Google's Search Ranking Algorithm is not public, and past changes have caused several small players a lot of pain -- its bound to make large companies nervous.
In a comment on my Google's Strategy Anyone? post I had stated:
Currently Google hypes "all" of its own products by placing them on Google Labs. If Google’s main business is Ads and search what is Google Mars doing on Google Labs? It is clearly a "favourite" project within Google not related to Search & Ads. It isn’t marked with a statement that says -- "this is a cool fun thing that an engineer built in his free time. Go play!”...it's not the media alone that is hyping Google Base. eBay is already talking to Yahoo and Microsoft trying to wade off the threat of Google Base. The reason is:
Search is a Horizontal service. That is the threat. Search leads to results and ads. Ads lead consumers to commerce. That is the threat. Google controls its search service and is secretive about the ranking process. Whenever Google search rankings change; several deserving companies lose business. There are some cases mentioned in John Battelle's "The Search...". How threatening is that? Remember that Yahoo at one point used Google's Search service and eBay advertises on Google.
If users search through Google and Google at some point decides to guide the top 3 search results to Google’s own properties (by chaging the ranking system) – whether about auctions, classifieds, or books– wouldn’t the eBay's and Amazon's of the world feel threatened?
For now, Google has hyped all its search *or* non-search products and services -- rather than sifting through them by reviewing the potential impact on their (Google's) large Advertising partners. As I had stated in my article on eBay's worries with Google:
It is quite clear that Google's un-strategy of trying to be both a search engine serving ads along with a portal like provider of eCommerce and Content services will make it a untrusted entity in the Internet world.
About a recent Amazon-Microsoft deal, where Amazon (AMZN) booted Google (GOOG) to sign up for Microsoft Search a Washington post article said:
A move that signals a small rebellion against Google but a large gain for Microsoft...Although the move is subtle, it speaks volumes when one of the Internet's biggest storefront site turns its back on the industry leader in search.
Now that Yahoo Inc. (YHOO) and eBay Inc. (EBAY) have signed up an alliance, its time that Google reviews its focus on Search V/s Commerce V/s Content.
Also of Interest: Dot Com War 2.0 -- eBay Inc. & Yahoo! Join Forces
» Will Google Suceed with GBuy? from TheBizofCoding
This post continues from my previous post Google readies GBuy Google's Plans for GBuy Google (GOOG) could potentially tie purchasing of advertised items on Google Search Results with GBuy -- offering lower prices to GBuy users. So if a user... [Read More]
Tracked on: June 28, 2006 8:24 AM | Permalink to Trackback