Google used to be based on a simple premise. The web is a big place, we help you find the relevant piece of information for your question and direct you there — as quickly as possible. You don’t consume information on Google, you simply find it. Users only spend 3.4% of their time on search engines. This is changing. Having the best algorithm is no longer enough. Google is investing heavily to own the data across key vertical categories and slowly becoming a destination experience for consuming this data. Unless you own and curate rich data-sets there are natural limits to both the search relevancy and experience you can provide. Google is quickly adapting by buying access to vast and rich data sets. Let’s look at their recent buying binge:
- Travel: Acquired ITA Software which aggregates flight routes and pricing information and enables advanced search capabilities on travel data.
- Local: Attempted to purchase Yelp.com, and after that fell through they ramped investment to build their own local data set. Additionally, Google has been investing for years in map with StreetView and satellite imagery.
- Metaweb (Freebase): Structured data of people, places, and things.
When Google focuses on a category like local this is what happens to the search experience. For a query like Delfina Pizzeria (an excellent pizza place in San Franciso) rather than linking to the best sources of information like Yelp, Zagat, SF Chronicle, etc. Google first pushes you towards Google Places. It currently includes a mix of their own content and other sources of licensed content. What happens when they have their own pictures, reviews, and check-in data — do they really need to license all this other content from the likes of Zagat and SF Chronicle.
I expect Google to complete the buying binge by acquiring companies with rich data sets across other highly monetizable categories:
- Shopping: Amazon and eBay to a lesser extent are capturing significant percent of query share in a very lucrative area. If users bypass Google and go directly to Amazon for their product queries this represents a serious threat to their business. They need to acquire a company with a huge selection of product data — rich and structured product attribute (size, color), inventory availability, pricing and promotions, and user reviews. I can’t think of one company (beyond Amazon) that has done this well at the scale Google would need. This may require acquiring multiple companies to create this.
- Real-Estate: Is somebody like Trulia next?