Tuesday, November 29, 2005
Opportunity and Fear as Google Widens Reach
Wal-Mart, the largest U.S. retailer, strikes fear into the hearts of its competitors and suppliers. Makers of goods from diapers to DVDs must cater to its whims. But there is one company that even Wal-Mart now eyes warily: Google, a seven-year-old business in a seemingly distant industry.
"We watch Google very closely at Wal-Mart," said Jim Breyer, a Wal-Mart director. In Google, Wal-Mart sees both a technology pioneer and the seed of a threat, said Breyer, who is also a partner in a venture capital firm. The worry is that by making information available everywhere, Google might soon be able to tell Wal-Mart shoppers if better bargains are available nearby.
Wal-Mart is not alone in its concern. As Google increasingly becomes the starting point for finding information and buying products and services, companies that even a year ago did not see themselves as competing with Google are beginning to view the company with some angst and admiration. Google's recent moves have stirred concern in industries from book publishing to telecommunications. Businesses already feeling the Google effect include advertising, software and the news media. Apart from retailing, Google's disruptive presence may soon be felt in real estate and auto sales. Google could extend its economic reach in the next few years as more people get high-speed Internet service and cell phones become full-fledged search tools, according to analysts. And ever-smarter software, they say, will cull and organize larger and larger digital storehouses of news, images, real estate listings and traffic reports, delivering results that are more like the advice of a trusted human expert.
Such advances, predicts Esther Dyson, a technology consultant, will bring "a huge reduction in inefficiency everywhere." That, in turn, would be unsettling for many industries and workers. But it would also reward consumers with lower prices and bring opportunities. Google, then, may turn out to have a more far-reaching impact than earlier Web winners like Amazon and eBay. "Google is the realization of everything that we thought the Internet was going to be about but really wasn't until Google," said David Yoffie, a professor at Harvard Business School. Google is but one company at the forefront of Internet technology. It has many competitors, and it could stumble. In the search market alone, Google faces formidable rivals like Microsoft and Yahoo. Still, apart from its front-runner status, Google is also remarkable for its pace of innovation and for how broadly it seems to interpret its mission to "organize the world's information and make it universally accessible and useful." Google executives speak of the company's outlook only in broad strokes, but they suggest unlimited horizons.
Among the projects being developed and debated inside Google is a real estate service, according to a person who has attended meetings on the proposal. The concept, the person said, would be to improve the capabilities of its satellite imaging, maps and local search, and combine them with property listings. The service, this person said, could make house-hunting more efficient, requiring potential buyers to visit fewer real estate agents and houses. If successful, it would be another magnet for the ads that appear next to search results, the source of most of Google's revenue. In retailing, Google has no interest in stocking and selling merchandise. Its potential impact is more subtle, yet still significant. Stores are collections of goods, some items more profitable than others. But the less-profitable items may bring people into stores, where they also buy the high-margin offerings one shelf, in effect, subsidizes another. Search engines, combined with other technologies, have the potential to drive comparison shopping down to the shelf-by-shelf level. Cell phone makers, for example, are looking at a "shopping phone" that can read product bar codes. The phone could connect to databases and search services and, aided by satellites, reveal prices in nearby stores.
Brought to you by Guardian eCommerce Privacy Seal Program.
"We watch Google very closely at Wal-Mart," said Jim Breyer, a Wal-Mart director. In Google, Wal-Mart sees both a technology pioneer and the seed of a threat, said Breyer, who is also a partner in a venture capital firm. The worry is that by making information available everywhere, Google might soon be able to tell Wal-Mart shoppers if better bargains are available nearby.
Wal-Mart is not alone in its concern. As Google increasingly becomes the starting point for finding information and buying products and services, companies that even a year ago did not see themselves as competing with Google are beginning to view the company with some angst and admiration. Google's recent moves have stirred concern in industries from book publishing to telecommunications. Businesses already feeling the Google effect include advertising, software and the news media. Apart from retailing, Google's disruptive presence may soon be felt in real estate and auto sales. Google could extend its economic reach in the next few years as more people get high-speed Internet service and cell phones become full-fledged search tools, according to analysts. And ever-smarter software, they say, will cull and organize larger and larger digital storehouses of news, images, real estate listings and traffic reports, delivering results that are more like the advice of a trusted human expert.
Such advances, predicts Esther Dyson, a technology consultant, will bring "a huge reduction in inefficiency everywhere." That, in turn, would be unsettling for many industries and workers. But it would also reward consumers with lower prices and bring opportunities. Google, then, may turn out to have a more far-reaching impact than earlier Web winners like Amazon and eBay. "Google is the realization of everything that we thought the Internet was going to be about but really wasn't until Google," said David Yoffie, a professor at Harvard Business School. Google is but one company at the forefront of Internet technology. It has many competitors, and it could stumble. In the search market alone, Google faces formidable rivals like Microsoft and Yahoo. Still, apart from its front-runner status, Google is also remarkable for its pace of innovation and for how broadly it seems to interpret its mission to "organize the world's information and make it universally accessible and useful." Google executives speak of the company's outlook only in broad strokes, but they suggest unlimited horizons.
Among the projects being developed and debated inside Google is a real estate service, according to a person who has attended meetings on the proposal. The concept, the person said, would be to improve the capabilities of its satellite imaging, maps and local search, and combine them with property listings. The service, this person said, could make house-hunting more efficient, requiring potential buyers to visit fewer real estate agents and houses. If successful, it would be another magnet for the ads that appear next to search results, the source of most of Google's revenue. In retailing, Google has no interest in stocking and selling merchandise. Its potential impact is more subtle, yet still significant. Stores are collections of goods, some items more profitable than others. But the less-profitable items may bring people into stores, where they also buy the high-margin offerings one shelf, in effect, subsidizes another. Search engines, combined with other technologies, have the potential to drive comparison shopping down to the shelf-by-shelf level. Cell phone makers, for example, are looking at a "shopping phone" that can read product bar codes. The phone could connect to databases and search services and, aided by satellites, reveal prices in nearby stores.
Brought to you by Guardian eCommerce Privacy Seal Program.
