October 23, 2005 By

John Battelle analyzes why Google is running away from the crowd in the search space internet advertising space. Hey, I can tell you that one. I work for a Google competitor. We simply aren’t as good. Yet.

The word-of-mouth network around the world is so efficient now that you can NOT win if you don’t build the best of breed products and services. When I can honestly say that MSN is better than Google, you can bet I’ll be singing that from the rooftops. MSN +is+ getting better. I can see the improvement every month. The question is will we pass Google’s quality? Will we have an advertising engine that’s better than Google? I believe we can. But we’re not there yet (even the guys who make MSN’s search engine admit that). Until we are, Google will continue being rewarded by the market.

This reminds me of working on a magazine. See, Google isn’t a search company. It’s in the audience aggregation business. Get an audience together and then figure out how to serve advertising to that audience. Lots of people think Google is a search company. It’s not. This is why Google probably doesn’t care too much about newer search engines like Technorati, Feedster, IceRocket, Sphere, or Exalead (all of which have some search advantages over Google).

Google just wants to make sure they have the biggest audience (and smartest, and richest, and youngest).

Do you have a way to attract an audience on the Internet? That’s what the business types at the big companies are looking for. Do you have a way to serve better advertising to those audiences? That’s what they are looking for too. There’s business opportunities in those two places. The trick is, getting an audience is getting harder due to the choices we all have as to where to spend our time (and our money). The more choices there are, the harder it is to get any decent sized audience.

And on the advertising side, getting advertisers to feel comfortable spending money on your service will be hard. I remember when I helped run a camera store in Silicon Valley. We used to advertise in the Yellow Pages. Lots of other competitors would always pitch us on spending money with them. So we tried the alternative once. It didn’t work. So we went back to where the audience was.

You want to know where the money is in the internet advertising business? Follow the audience. That’s where it’s going to be.

Filed Under: Google Calendar, Second Life
  • Christopher Coulter

    What I always said, Google is not a search engine, it’s an advertising company…

  • Christopher Coulter

    What I always said, Google is not a search engine, it’s an advertising company…

  • http://sixdisciplines.blogspot.com/ Skip Reardon

    Google’s winning this “war” so far for the same reason eBay has it over all other competitors - they found a way to aggregate the audiences.

    Hey, MSN - there’s still time - get crackin’

  • http://sixdisciplines.blogspot.com Skip Reardon

    Google’s winning this “war” so far for the same reason eBay has it over all other competitors - they found a way to aggregate the audiences.

    Hey, MSN - there’s still time - get crackin’

  • http://consumermanagedmarketing.dabu.com/ Richard Reukema

    Robert,

    Google has a business model that not too many people really understand - their primary service is something that they give away for free. What they sell is the remnants of providing that service. What they are really doing is “tagging” groups of individuals by what they are searching for. They then sell the advertising space to this aggregation of consumers.

    If a business whiches to differentiate themselves (including MSN Search) they must think broader than simply the service they are providing. Initially they must provide the best of class service, but that is not enough. (Competition will catch up in this technology world - see Don Dodge’s blog on that one).

    For an example, the airline business is truly a competitive market. Consumer selection is probably based on flying times and/or price. Most, if not all airlines, are concentrating on ensuring their planes are full. If they would think a bit broader - I would say that they are flying consumers to other markets - markets where merchants would love to service those customers. This is a remnant of their service. Sure they are responsible for safely delivering a passenger to a city, but why stop there? Why not make arrangement for a special cab service that saves their consumers time and money (no wait line, better quality cabs, etc.) when they get to that city. How about a hotel and ensure luggage goes straight there from the airport (I hate lugging the stuff until I can check in..)…. I could go on and on…And consumers, via word of mouth, would then fill those planes…not because of the airline, but for the additional services that come with that service.

    A good CRO (Chief Relationship Officier) should be thinking broader, and introduce relationships that benefit his consumer base - this is all about thinking about the audiance - not just about a consumer buying a plane ticket.

  • http://consumermanagedmarketing.dabu.com Richard Reukema

    Robert,

    Google has a business model that not too many people really understand - their primary service is something that they give away for free. What they sell is the remnants of providing that service. What they are really doing is “tagging” groups of individuals by what they are searching for. They then sell the advertising space to this aggregation of consumers.

    If a business whiches to differentiate themselves (including MSN Search) they must think broader than simply the service they are providing. Initially they must provide the best of class service, but that is not enough. (Competition will catch up in this technology world - see Don Dodge’s blog on that one).

    For an example, the airline business is truly a competitive market. Consumer selection is probably based on flying times and/or price. Most, if not all airlines, are concentrating on ensuring their planes are full. If they would think a bit broader - I would say that they are flying consumers to other markets - markets where merchants would love to service those customers. This is a remnant of their service. Sure they are responsible for safely delivering a passenger to a city, but why stop there? Why not make arrangement for a special cab service that saves their consumers time and money (no wait line, better quality cabs, etc.) when they get to that city. How about a hotel and ensure luggage goes straight there from the airport (I hate lugging the stuff until I can check in..)…. I could go on and on…And consumers, via word of mouth, would then fill those planes…not because of the airline, but for the additional services that come with that service.

    A good CRO (Chief Relationship Officier) should be thinking broader, and introduce relationships that benefit his consumer base - this is all about thinking about the audiance - not just about a consumer buying a plane ticket.

  • http://larryborsato.com/ Larry Borsato

    Actually Google’s business model should be well understood by anyone who listens to radio or watches broadcast television. They make stuff available to you in order to sell you as an audience to advertisers. In fact, monetizing eyeballs was what the initial monetization of the web depended on.

    The web allows one-to-one advertising, selling to your exact target demographic, and Google is very good at that, and keeps finding ways to improve. And they provide a service that people like.

  • http://larryborsato.com Larry Borsato

    Actually Google’s business model should be well understood by anyone who listens to radio or watches broadcast television. They make stuff available to you in order to sell you as an audience to advertisers. In fact, monetizing eyeballs was what the initial monetization of the web depended on.

    The web allows one-to-one advertising, selling to your exact target demographic, and Google is very good at that, and keeps finding ways to improve. And they provide a service that people like.

  • http://www.nslg.net/ Adam Carstens

    Maybe it’s because Google, unlike MSFT, doesn’t have decades worth of animosity built up from the time when it treated customers/users like crap? Google has never given anyone a “blue screen of death.” Google has never been perceived as abusing its monopoly status.

    Whether or not these critiques of MSFT are fair or not, Google is *perceived* as having its users interests at heart. Can MSFT say the same thing?

  • http://www.nslg.net Adam Carstens

    Maybe it’s because Google, unlike MSFT, doesn’t have decades worth of animosity built up from the time when it treated customers/users like crap? Google has never given anyone a “blue screen of death.” Google has never been perceived as abusing its monopoly status.

    Whether or not these critiques of MSFT are fair or not, Google is *perceived* as having its users interests at heart. Can MSFT say the same thing?

  • Mujibur

    This has to be one of the dumbest posts you’ve made Scoble.

    Google doesn’t care about upstart competition? They merely want to garner a large audience? Here’s a clue: Google is obsessed with both its competition and making search better. Which is why we’ve gotten fantastic tools like maps.google.com that have been shamelessly copied.

    You argue that the “word-of-mouth network” will always reward a superior product. In the post above this one, you talk about PMC being superior to iPod. Why hasn’t it been more succesful then? Surely the “word-of-mouth” network would have picked up on this superiority.

    It’s going to take more than marginal improvements to unseat Google.

  • Mujibur

    This has to be one of the dumbest posts you’ve made Scoble.

    Google doesn’t care about upstart competition? They merely want to garner a large audience? Here’s a clue: Google is obsessed with both its competition and making search better. Which is why we’ve gotten fantastic tools like maps.google.com that have been shamelessly copied.

    You argue that the “word-of-mouth network” will always reward a superior product. In the post above this one, you talk about PMC being superior to iPod. Why hasn’t it been more succesful then? Surely the “word-of-mouth” network would have picked up on this superiority.

    It’s going to take more than marginal improvements to unseat Google.

  • http://www.gawdproductions.ca/ Gina

    Actually, Google will likely reign a good while longer simply because of being a household name. Turn on Tech TV and be advised to ‘google’ something, watch CSI and see the boys and girls in the crime lab do Internet research from their ‘Google’ homepage.

    I honestly think MSN IS getting a LOT better (and I’m no fan of anything Microsoft). Search Results are more relevant (especially after the latest Google dance) and interestingly enough, for one of our clients MSN has come within 3% of Google in refering visitors.

    And I agree with John, Google is no longer about search (if it ever was); it is about drawing audiences together to serve advertising.

  • http://www.gawdproductions.ca Gina

    Actually, Google will likely reign a good while longer simply because of being a household name. Turn on Tech TV and be advised to ‘google’ something, watch CSI and see the boys and girls in the crime lab do Internet research from their ‘Google’ homepage.

    I honestly think MSN IS getting a LOT better (and I’m no fan of anything Microsoft). Search Results are more relevant (especially after the latest Google dance) and interestingly enough, for one of our clients MSN has come within 3% of Google in refering visitors.

    And I agree with John, Google is no longer about search (if it ever was); it is about drawing audiences together to serve advertising.

  • http://www.msmvps.com/glach Matt Gerlach

    I agree with Gina. The service is there…but to fight a household name of google?

    Even if you arent that tech-savy, people know to “google” things.

  • http://www.msmvps.com/glach Matt Gerlach

    I agree with Gina. The service is there…but to fight a household name of google?

    Even if you arent that tech-savy, people know to “google” things.

  • Andy Freeman

    > How about a hotel and ensure luggage goes straight there from the airport (I hate lugging the stuff until I can check in..)….

    That’s one of the services of Disney World hotels.

    One of the side effects is that folks are less likely to rent cars, so they don’t spend a day or two at Universal Studios or other Orlando-area things.

  • Andy Freeman

    > How about a hotel and ensure luggage goes straight there from the airport (I hate lugging the stuff until I can check in..)….

    That’s one of the services of Disney World hotels.

    One of the side effects is that folks are less likely to rent cars, so they don’t spend a day or two at Universal Studios or other Orlando-area things.

  • http://infomediary.wordpress.com/2005/12/03/think-broader-think-audience/ Infomediary - Consumer Managed Marketing » Blog Archive » Think Broader - Think Audience

    [...] Just left a long comment over on Robert Scoble site regarding the business model of Google. [...]