Is Google Going into the Classifieds Business? - Why is Google Doing This?
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Google is being very coy about the speculation surrounding Google Automat. “Like many companies, we file patent applications on a variety of ideas. Some of those ideas later mature into real products or services, some don’t. Prospective product announcements should not be inferred from our patent applications.” Right. So why did Google use the “classifieds.google.com” domain name address in its patent application?
We’re not stupid, and neither is Google. The search engine giant knows it needs to diversify its revenue stream. Granted, classified advertising is still advertising, but it is a very different kind of advertising. And if it cuts itself in for a small percentage of the proceeds from each transaction it facilitates – as to both eBay and Paypal – it stands to gain a great deal of money.
Currently, Google is almost completely dependent on pay-per-click ads. There has been growing concern about “click fraud,” where malicious users click on ads with no real intention of buying anything, in order to gain money for themselves or do harm to the advertiser’s budget. Still, according to a study from the Interactive Advertising Bureau and PricewaterhouseCoopers, U.S. spending alone on paid search ads reached $2.3 billion. The kicker is that spending on online classified ads reached $1 billion. In short, it’s a huge market, and Google, not surprisingly, wants a piece of the pie.
On a global level, the market is even bigger. According to Classified Intelligence, Google’s latest moves could “directly impact the $100 billion annual global classified advertising business.” About $30 billion of that global number comes from the U.S., and – at the moment, anyway – it’s still dominated by the newspaper industry. That looks set to change. Jim Townsend, editorial director of the consulting firm, stated that “We know they’re out to own search. And it looks like they are out to change classified advertising…Traditional media companies will need to figure out a way to manage life with Google.”
Of course, Google’s patent application claims the motive behind it is to help users with the “unique set of challenges” involved in Web-based advertising, since creating effective online ads require “significant time, effort, and expertise.” That is why web-based user-assisted advertising is needed. “Preferably, such an approach would guide a user in the creation of advertisements describing offerings of goods or services, creatives associated with the advertisements, and advertising budgets. Such an approach would also help create and host a Web presence for individual and other advertisers. Such an approach would also facilitate driving Web traffic to hyperlinked advertisements through targeting.” Well, it is probably traditional to not mention making scads of money as a motive in your patent applications.
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