Google likes markets.
Google may have made their name in search, but they make their money by making markets. They run the biggest real-time auction the world has ever seen, allowing supply-and-demand to automatically price and place billions of advertising messages every month.
With this affinity for markets, Google naturally ran the most unconventional IPO in history when they auctioned a miniority stake to the public back in the summer of 2003.
Recently, Google bought dMarc so they could bring the power of markets to radio advertising, too. While
most observers saw this as Google extending its expertise in advertising, I see it as an extension of Google's expertise in building online markets. (dMarc's
big innovation is their automated auction market for radio spots.)
Buygoogle has been
ranting that the Google Video Store, which so many have
criticized for lacking content, organization and aesthetics, isn't really an iTunes competitor at all - it's actually the beginning of a marketplace for content. (When Google
opens this up for individual content producers to get paid this will be obvious.)
Buygoogle's posts about Google building a content marketplace included January's
prediction that they would use the same approach to books that they have for video, allowing authors to sell directly to readers. Voila, Google quietly announced this weekend that they are now
making a market in online access to books.
Google recently unveiled an
order management system, a payments service, and a seller reputation tool that round out their ability to consummate transactions initiated through various Google marketplaces. Google then integrated these tools with Google Base, so
lookout eBay.
Scot Wingo is
on to something when he observes that Google's new reputation system could be a Big Deal. It could do what eBay has never been able to accomplish -- break out of the walled garden. By integrating reputation with payments and Adwords, a seller's reputation is now portable, and visible to any trading partner in any Google-enabled marketplace.
Can you see where this is going? This is bigger than Base, bigger than Video. Google intends to unlock the marketplace potential of search itself. Google will be the trusted intermediary in the
database of intentions.
Indeed, in
announcing the continued evolution of their payments capabilities, Google couldn't have been clearer: "We expect to add payment functionality to Google services where our users need a way to buy online. For us, it's all about bringing our users a better online experience
whether they're searching or buying."
How does this fit with Google's mission to "organize the world's information and make it universally accessible and useful"? Well, what is a market, except an information exchange? Wikipedia
defines a market as "a social arrangement that allows buyers and sellers to
discover information and carry out a voluntary exchange."
Google is a
market, not a search engine.
