Companies as diverse as Wal-Mart, Microsoft, the New York Times, and NBC are concerned about the growing threat from Google. If you are a retailer you need to be aware of what is happening in online search and make it work for you before it works against you. Here’s a quick overview of what’s happening and why retailers need to leverage it to sell more online.

Microsoft Challenges Google

First of all, what does Google really do? Google monetizes your attention. Google uses its clever technology to give you something compelling (relevant search results) and earns revenue by advertising during to process. Microsoft is getting into that game in a big way with two important initiatives. First they created an advertising platform to challenge Google’s stranglehold on targeted ads on a search platform. (Microsoft announced adCenter at ChannelAdvisor’s recent Summit trade event.) And now they are announcing Live.com, an online platform based in part on their Office productivity suite. What the Office Live component will do is offer features based on Microsoft Office but as an advertising-supported online service. By turning a product into a platform users can turn general productivity applications into customized business solutions. And Microsoft can then use their advertising engine to monetize your attention by serving you targeted advertising.

Google Targets Your Phone

Meanwhile Google and Yahoo are pushing fast into the wireless phone market and will be delivering more features wirelessly. I am absolutely convinced of the importance of local search and that EBay bought Skype to create a searchable marketplace for local services. Google Maps has an open API on which developers can build applications showing data from other sources on a map. Now you can not only find goods and services online, you can find where they are on a map. And soon you will be able to find them wherever you are with your mobile phone. The next step will be for goods and services to find you.

If you are marketing to consumers this is great. But if you are a retailer you need to be aware of the future in which consumers are empowered to know where the best deals are at all times. How would your business be affected if a customer in your store could glace at her phone and see that a better deal is available at your competitor two blocks away? Could you differentiate yourself enough to overcome that threat?

Yahoo Talks to Your TiVo

Yahoo has announced new functionality for its online calendar, part of the popular My Yahoo portal, that will allow TiVo subscribers to schedule upcoming recordings from its online TV listings. Why is this important? Because by extending functionality Yahoo is gaining more of your attention.

The Retail Angle

Now if you are in the retail business all this is important to you for several reasons whether you sell online or not. First it blows the advertising business wide open. You can now reach potential customers at more times, in more places, and when they are most interested. But more importantly it creates an attention platform that you can leverage to enhance your customer relationships. Google, Yahoo, eBay with Skype, and Microsoft are building online platforms and services to monetize your attention. They will pay for it through advertising. If you sell products then this is represents new opportunities for you. Use the opportunity this new attention economy gives you to build conversations with your customers. Reach them when they are most interested and you will be an advisor. The old broadcast model makes you a distracter.

Search empowers the consumer. It discounts the benefits of location and threatens to disintermediate retailers. But by embracing search first you can highlight your differentiating factors and bring consumers to you in way not possible before. The big guys are spending billions to build the engines. You can be the fuel or you can ignore the coming changes and risk becoming roadkill.