While the subject of Google Base is hot I thought it a good time to step back from divining what Google may be doing and look at where search as a whole is going. Right now when you search on Google you are generating much more than relevant search results. You are minting money. According to the figures in Google’s just-released results for Q3 2005, you and your fellow searchers are delivering $4 million in profit per day. You do that by generating relevant situations into which Google inserts targeted advertisements. The situations are so relevant that advertisers pay handsomely to show just a small amount of text and a web site link to you.
Here’s why. Search has become the online equivalent to the retail shelf. It is the moment of decisive customer interaction. When I type “HDTV” into a search engine I am doing so for a reason. And online retailers will line up to show me ads for HDTVs. In fact they will bid on how much they are willing to pay Google if I click on ad ad generated by that search. Why? Because based on that search I am signaling an intention. Sellers of that particular product are prepared to pay for my attention of that signal was in fact my intention to buy.
Now here’s where it gets interesting. Consumers are spending somewhere north of $100 billion online in the U.S. That’s exciting and the growth rate is fantastic and all. But it represents less than 2% of all consumer spending. Most consumer dollars are spent locally. And that will always be the case. But commerce-oriented search isn’t only about online fulfillment. I may buy that HDTV online and maybe from an online retailer that served me an ad with the results of my search. But I am more likely to buy it locally. And that’s the holy grail for retail search. Not just relevance, but local relevance. That’s what Google, Yahoo, MSN, and the rest are cooking up.
Go ahead and type “muffler” into a search engine. Ask yourself why anyone would want to search on the word muffler. The only time I would ever be interested in a muffler was if I needed one. And if I need one I probably need it immediately. And I also probably need it to be installed on my car. With the “HDTV” query I could reasonably have been simply researching. But with “muffler” I want to buy. So the right ad here is a local ad. The situation screams for an ad from the Meineke down the street, not meineke.com.
Getting back to Google Base (is that like “data base”?), if it really is a service allowing you to “Post your items on Google” then how much more local can you get? It’s the concept that made craigslist so popular. Peer-to-peer commerce started on bulletin boards and has grown into eBay. But the urge for buyers and sellers (and barterers and swappers and hagglers) to interact locally is still strong. If Google Base is real then Google is about to launch a new weapon in the battle for the local search market - all of us!