During SES London, a researcher asked me which areas are most important to consider when studying global trends relating to vertical search engines. The discussion got me thinking about the importance of vertical search in global search marketing — and Google’s role in it.
Then, earlier this week, Google acquired British price comparison site beatthatquote.com for £37.7 million.
It hasn’t all been easy sailing for Google in vertical markets:
- Not so long ago, Google pulled out of real estate search, having effectively been beaten by Realtor.com in the U.S. and Rightmove in the UK.
- Google’s acquisition of ITA, which would give it access to flight data to enhance its vertical travel search offering, is still being looked at by the regulators and facing a stiff lobby from the vertical search engines with which it seeks to compete.
- Local search has become also hotly disputed with the launch of Google Places.
This all raises lots of questions:
- Should the regulators be concerned that a generic search engine is taking on vertical search markets and removing niche and typically small competitors?
- Is Google’s strategy likely to be to creep up on vertical search competitors by buying smaller rivals and thus staying under the regulator’s radar?
- Does this mean that regulators are, in effect, powerless to exercise any kinds of effective controls?
- What happens if the “don’t be evil” ethos of Google is replaced by a new breed of executives who “do some evil”? Who will protect us then? Do we need to call in James Bond?
The Link With Global Search Marketing
There are relatively few markets where Google isn’t the market leader. Google has no real global search competitor (sorry Microsoft) and to continue to grow and satisfy its shareholders, it needs to expand into new markets — which can only mean mobile (did that already), or social networks (trying that now), and vertical search.
In the travel sector some time ago, the term “disintermediation” was popular. This meant that third parties who operate between travel providers and travelers would disappear as consumers became better able to buy directly from their favorite providers.
In reality, it proved not quite so simple but nonetheless true that much of the travel market moved online and, while populated by new intermediaries, in certain countries the traditional intermediary in the guise of the high street travel agent began to disappear.
Vertical search organizations are the new intermediaries, which raises the question of what it means economically and ethically if Google rules many of the online vertical markets?
This isn’t an attack on Google. The reason Google has reached this position is because they have created a phenomenal and hugely useful technology.
But I’m sure they would concede that one single organization controlling much of the world’s useful information must be effectively regulated. And if regulators have a role, then so do we because we must answer the question of how far we want this to go — and then tell the regulators.
Consider the perspective of investors and entrepreneurs who are considering launching a new vertical search tool. For how long will investors feel it is appropriate to invest risk capital for the development of a new service that will have to go up against Google?
Right now it is possible to justify that on the basis that Google might be the acquirer — but that may not always be the case. So what then?
Fortunately, I don’t actually believe it’s quite so bleak. Google has one decent competitor in Facebook.
Facebook has a link with Bing and can return to “search” when it has achieved the same status in the social networking sector, namely the market leading position in the majority of global markets. Several companies have resisted Google’s entreaties to sell including both Twitter and Groupon. And it is possible to compete in vertical search sectors.
How to Survive in Vertical Search
The survival of Rightmove and Realtor.com provides important “how to” lessons for others operating in the vertical search world. There were a number of reasons why the real estate vertical wasn’t ready to be disrupted by a new technology.
Some of the reasons are to do with the technologies that were linked to real estate search — including things such as the production of sales details linked to the online content. It was also to do with the role which realtors play actually working for consumers — even though those same buyers and sellers complain bitterly they do, in fact, need an “intermediary.” And it was also about having your property listed on the largest and strongest — so first mover advantage also played its part.
So, vertical search engines developers: do something different, something useful, do it offline as well as online and do it first!