How to tell if Google is going to kill (or acquire) your business

I recently got Google Analytics wired up on this blog, and it’s a pretty nifty application. It’s perfect for a small-fry like me, but as I browse the web, I occasionally find it running on some pretty high-profile, high-volume websites, so I wonder what its impact has been on the incumbents.

I’ve had some exposure to Omniture SiteCatalyst, WebTrends and a few other analytics platforms – many of which require training and experience to really get their full benefit. Many times as a consultant, I met clients who religiously deleted the regular email reports sent by their analytics package of choice, because they didn’t understand it, or what they understood of it was not interesting. Simplicity often trumps power.

This is what Google has become astonishingly good at.

Search, maps, email, AdWords, AdSense and now analytics and OpenSocial (plus much more of course). On the surface, these are useful, reliable, elegantly-designed services. They other thing they have in common is what they give Google.

Each of these provides Google with a powerful window into what people want from the Internet. Maps, for example, tells Google a lot about what people want from local search, as well as other real-world behavioral data around travel and commerce.

Google Analytics and the OpenSocial API represent gold mines for Google with regard to the data they get access to.

Using the same philosophy, but with a slightly different goal in mind, Google admitted that a big reason for launching their free 411 service was to gather data for developing speech recognition algorithms.

With their hands on all this data – especially data that no one else can gather very well – Google effectively becomes the world’s most powerful information broker. They can use the data to improve their own products or power new ones, of course, but they can also sell it in a marketplace where there’s an almost limitless demand for it. They will surely make some of it available in the form of APIs, but probably in ways that will enable them to gather even more data.

Which brings me back to the title of this post.

If you’ve built a business that depends on a category of data that Google might covet, especially data that’s not adequately represented in Google’s portfolio, then there are two ways Google might rock your world.

In the first scenario, you are like Omniture or MapQuest. Your goal has been to provide an essential service, and you haven’t really given the data that flows through your application very much thought. Maybe you even made it a core principle of your business to keep your eyes and hands off that data, to protect what is proprietary or private to your customers. Finally, your service is not all that difficult to build. Outlook: Google replicates your business and claims a devastating (for you) slice of your market.

In the second scenario, you’ve built an application or service that is utterly about a particular kind of data. In fact, you are aware that if the application that uses it were to simply go away, or if your initial target market were to become suddenly irrelevant, you know you could build something different using the same data – or sell the data itself. Finally, the data that drives your application is unique and difficult to acquire, and you’ve spent a lot of time and effort on that core problem. Outlook: Google makes a killer offer.

What business will Google target next? Will they kill an incumbent or bless a scrappy startup?

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