Google Base: A Case Study in How to Go from Zero to $100 billion in 14 Months

It is being widely reported today that Google is about to launch a service to compete with eBay called Google Base.  Rumored to be a service that would allow users to sell items on Google.  It is also rumored that in conjunction with Google Base, a PayPal type service will be offered.

Google has gone from its IPO to be valued at $100 billion in 14 months.  At $100 billion, its market cap equals that of eBay and Yahoo combined.

Regular readers of this blog know that I am a huge fan of Google because I believe it is a world-changing company.  For more, see these previous posts here and here.  Other bloggers have posted this screenshot:

OCTOBER 27, 2005 News Analysis By Robert Hof and Sarah Lacy Big Waves from "Google Base" Is the search giant preparing for a landgrab in online auctions? Or classified ads? Or even more? It's sure looking that way It's not enough that Google (GOOG ) seems to be taking on everyone from Microsoft (MSFT ) and Yahoo! (YHOO ) to Verizon (VZ ) and the world's book publishers (see BW, 9/5/05, "Google's Grand Ambitions", and BW Online, 10/20/05 "Google's Escalating Book Battle"). Now, it looks like the search giant has its sights set on tearing into another cast of corporations: online marketplace eBay (EBAY ), the funky classified-ad site Craigslist, the entire newspaper industry, and maybe more. Google's already outsize ambitions appeared to balloon even bigger on Oct. 25 with the news that it's apparently testing something called Google Base. The test site, spotted by sharp-eyed Web surfers in Europe, indicate that Google aims to solicit people to post all manner of content on its site. But what got people's attention were the specific examples, such as classified-ad listings for real estate. For now, Google says only that it's trying to provide content owners an easy way to "give us access to their content." It also says it has nothing to announce right now. But that didn't stop rampant speculation about precisely what Google's next move would be. Because Google has been looking at getting into auctions or classifieds for months now, most of the buzz has centered around the potential to take on eBay. POTENT AMMO.  It's not as crazy as it may sound to the casual Web surfer. In essence, notes Steve Harmon, vice-president for corporate development at local online classifieds site LiveDeal, "Classifieds are product search." So it fits neatly into Google's stated goal of organizing the world's information and making it more accessible. And, of course, taking tidy profit off the top. Google brings some potent ammunition to what's shaping up as a pitched battle for the $90 billion U.S. market for newspaper classifieds, Yellow Pages listings, and local radio ads. For one, it has a hugely appealing brand and enormous traffic. It managed to appropriate an entirely new advertising market that already has stolen ad revenues from traditional media, newspapers to magazines. The highly profitable revenue from those ads has enabled Google to offer a raft of new consumer services, from e-mail to desktop search, for free. "They're not starting from scratch in many regards," says Derek Brown, senior analyst at Pacific Growth Equities. "The foundation Google is working off of is pretty sizable." It's already getting product feeds from its Froogle comparison-shopping engine, it's working with existing merchants through keywords and advertising, and it has millions of consumers. GIVE IT A TRY?  Google has also been working on a payment system for months. Few companies other than PayPal -- including eBay -- have been able to pull that off, and no one knows how far along Google is. But Brown sees Google Base potentially cutting into eBay's pricing power -- if Google's service were free -- and into the auction giant's growth. Brown already has a sell rating on eBay's stock because he's concerned about growth and large eBay sellers moving off the site. Perhaps the most crucial eBay constituents are the so-called Power Sellers, those who make all or a substantial portion of their living on the site and account for about 29% of eBay's sales, says Martin Pyykkonen, managing director at Hoefer & Arnett. They're not going to switch capriciously, but there's nothing stopping them from testing a few transactions on Google to see how it goes, he says. As news of Google Base filtered out on Oct. 25, eBay shares fell $1.41, or 3.6%, to $38.01. eBay may not be the only company in the way of Google Base. Newly discovered Google screenshots seem to indicate a wide range of categories of content: course schedules, events, housing, jobs, news, people profiles, reference articles, products, vehicles, travel, and more. That seems to suggest a wide variety of traditional media, such as newspapers, magazines, and even scientific journals, could be in the line of fire. "HEAVY CONFLICT"?  Even more than eBay, Craigslist looks to be squarely in Google Base's sights. Minority-owned by eBay, it has garnered a loyal following of people who like its spare but friendly feel -- and its proven success in matching buyers and sellers. Google's widely recognized brand could help it ramp up classified listings quickly, surpassing Craigslist in short order, Pyykkonen says. Google will have to break down roadblocks, though, before Google Base poses a meaningful threat to eBay or any other rivals. It appears Google Base would put Google into the content business -- that is, content it would own, not just point to. That could rankle partners, specifically the classified-ad sites such as Monster.com from which Google recently has been asking for feeds. "It starts to put them in heavy conflict with their partners," says Craig Donato, CEO of Oodle, a new search engine for classifieds, itself a would-be competitor. Another set of challenges lies in creating a workable user experience, says Rajesh Navar, LiveDeal's CEO. It's one thing to scan search results. It's another thing entirely to view and buy through classifieds. So the user experience would need to be carefully set up to make it clear, for example, who's doing the selling. Also, because classified listings are so transitory -- good ones on Craigslist are gone in 10 minutes -- they may not be conducive to Google's so-called spidering, the process of storing Web pages and indexing keywords, links, and text. LOTS OF BETAS.  Navar points out that Yahoo and AOL (TWX ) had, and perhaps still have, a better position from which to offer classifieds, but they've largely failed. So it's not a lock that Google would succeed. The biggest question remains whether Google can deliver on services beyond ad-supported search. It's developing a reputation for launching beta project after beta project, from its Gmail Web-based e-mail service to its Orkut social-networking service, that fail to gain much traction. In particular, traffic to Froogle trails far behind that of rivals such as eBay's Shopping.com and E.W. Scripps' Shopzilla, despite Froogle's debut in test mode more than two years ago. That's why one person familiar with eBay management's views says the company actually remains less worried today about competition from Google than it was six months ago. Indeed, to offer buyers and sellers a credible alternative to eBay, Google also would have to come up with a number of new services -- for one, a payment system. It has said it's working on a Google Wallet, which it hasn't yet introduced, but eBay's PayPal unit took years and hundreds of millions of dollars to clear regulatory hurdles and stamp out fraud before it caught on. WATCH YOUR BACK.  Google also would need to create a reputation system to rival eBay's formidable feedback system, by which buyers and sellers rate each other to build trust. Still, Google has a big and growing cash hoard it could use to hire the right talent, create the needed technology, or strike a deal with partners and the many upstarts already challenging Internet incumbents. If nothing else, Google Base will force a whole new swath of the business world to pay attention to the brash boys from Mountain View, Calif. __________________________

Google Testing Possible EBay Competition

Google confirmed that it's testing a new searchable database service, called Google Base. Google is providing few details, but the service was online several hours and at least one alert blogger snapped a screenshot.

By Antone Gonsalves,  TechWeb News
Oct. 25, 2005
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=172900366

Google on Tuesday confirmed it is testing a new service called Google Base, which could someday offer services that compete with EBay Inc.

The Google Base site was up for a short time Tuesday before it was taken down. Some bloggers, however, managed to capture a screenshot.

A company spokeswoman confirmed that the Mountain View, Calif.-based, search engine was testing a new service, but offered very few details.

"We are testing a new way for content owners to submit their content to Google, which will complement existing methods such as Web crawl and the Google Sitemaps program," she said in an email.

Google Sitemaps are tools the search engine offers to Web site operators to help improve their coverage in the search engine's index.

In a description on the Google Base site, the company described the service as "Google's database into which you can add all types of content."

"We'll host your content and make it searchable online for free," the site said.

Among the items listed as examples of what could be submitted were used cars, descriptions of a party planning service and a "database of protein structures."

The service could put Google in competition with online auctioneer EBay Inc., which recently bought a minority share of Craigslist Inc., a classified listings site, observers say. EBay, based in San Jose, Calif., bought a 25 percent stake in San Francisco-based Craigslist, which covers a wide range of categories from jobs and apartments to used cars and personals.

_________________________________

Google Base, a new opportunity takes Google the eBay way Posted on : 2005-10-26 | Author : Helen Steele News Category : Internet All set to get into full-fledged e-commerce, the world's most acclaimed search engine, Google, is about to launch a service called 'Google Base' that would place it squarely in the realm of giant online retailers and auction sites such as Amazon and eBay as well as local and national classified and job sites. It is worth noting however that Google does not complain (to outsiders) when these companies or any other ventures into the search engine market, A9.com, as an example, instead Google simply endeavours to make their own service better. The new service, which will allow users to list whatever they wish to sell from used cars to real estate, is likely to be backed by a payment service to take the purchase experience to its entirety. A Google Base screen shot that revealed the way the site would look like was doing the rounds of the Internet briefly before being blocked off, possibly because the company is still believed to be “testing ways for content owners to send their content”. However, what is known is that the service offers users an opportunity to “Post items on Google”, which some analysts believe could be as early as next week. They also say that the Google Base service is also possibly a forerunner to the much-awaited Google payment service. Google, which is on a high as far as earnings are concerned, has already launched a slew of services this year causing its market capitalization to zoom to the $100-billion club in just 14 months from first listing. The company also seems keen to remain the darling of market and as if its numerous new measures were not adequate, it recently announced another favorable measure of focusing on the fastest-growing Chinese online market. Analyst, Derek Brown of Pacific Growth Equities suggests that with the Google Base service, “Google is maybe striking at the heart of eBay by offering a perhaps free venue for individuals to list items for sale”. After eBay's August 2004 acquisition of a 25 percent stake in Craigslist, the market is virtually divided between three major players. Meanwhile everybody is guessing as to the extent of Google's new service being tied to its other long-term offerings on the anvil. A few analysts suggest that Google could “generate enough listings” to allow consumers to begin using searches to locate this type of information. Analysts are even going as far as assessing the impact of Google's new service on eBay should it in tandem “unveil a payment service”, which they put at “minimal” in the immediate term. But clearly Google's entry into rival territory could not be more dramatic as it possibly is building strength as a repository for all types of information as varied as maps, books and scientific data. The scale of their plans is something that keeps rumor mills spinning that something entirely new like a “Semantic Web” is in the offing from Google's side. An idea favored by the inventor of the World Wide Web, Tim Berners-Lee, actually sees the web itself as something more intelligent than what it is today. Gartner vice president Whit Andrews says, “In the last 10 years we have seen a number of initiatives intended to make it easier to build a data-driven web site”. But this is more like building a data-driven website from other's data in a publicly available database. Such a move is only likely draw Google closer to eBay in competition and yet in many respects far removed and futuristic.

Print Source : http://www.earthtimes.org/articles/show/4315.html