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There's no delete button on the Web
Games with a purpose
Google's secret weapon
It's not an Excel killer, it's the Google Grid
Vonage train wreck realized
Vonage IPO trainwreck
Google and the market for TV ads
Will new entrants bust the online ad market?
Google and the Paradox of Choice
Microsoft adCenter is broken

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WSJ on eBay and Google Base - 3/16/2006 10:12:02 PM

The Wall Street Journal today picked up the story (sub req'd) that Google Base and Google Payments could threaten eBay's juicy fees. But the article is quite imprecise, and doesn't do a very good job in describing the competitive landscape. Here are a few snippets:

Google Inc. is increasing the number of sellers who can use its online payment-processing service, in a move that could put pressure on eBay Inc.'s online auctions and PayPal payments services to cut or even eliminate some fees.
Last month, Google began processing payments for some sellers using its Google Base service, which lets users submit information such as classified-like listings of items for sale. The Mountain View, Calif., company in recent weeks extended that offering to more sellers. Under the program, Google handles the billing of a consumer's credit card for an unspecified number of sellers.
Google charges the seller 25 cents plus 2.5% of the value of the transaction. The company doesn't charge Google Base sellers who handle credit cards or other payment methods themselves.
Some financial analysts say the Google Base payment service could put pressure on eBay and PayPal, which generally charges fees ranging from 1.9% to 2.9% per transaction, plus 30 cents, depending on factors such as a seller's payment volume.

But the Journal doesn't capture the fee threat precisely. In fact, to list and sell an item on eBay, the seller must pay an insertion fee (whether or not the item sells), a buy-it-now fee, fees for multiple photos, a final value fee, and a PayPal payments fee.

For a $100 item, these fees can amount to $10 to $12 on eBay. On Google Base, there is only a payments fee (if using Google Payments), which on the same $100 item would amount to $2.75. This is where there could be dramatic pricing pressure on eBay if Google Base achieves traction.

But of course, it's not all about the fees. Even if it were free, Google Base doesn't have the network and captive reputations of eBay, which is the biggest barrier to entry. Without that network, sellers on Google Base will find it difficult to find buyers, even if the fees are a small fraction of eBay's.

In addition, buyers and sellers have years' worth of feedback in eBay's reputation system which is not portable, and would need to build their reputations from scratch in Google Base.

Finally, the big unknown is whether Google can counter the immaturity of its Base network with Google's incredibly high traffic on its other properties, primarily search.

We've got this cool thing, and nobody knows about it - 3/13/2006 09:50:00 PM

Yesterday I recommended that the Google investor watch Seth Godin's presentation to Googlers in Mountain View. Here are a couple more reasons to watch the whole 48-minute video:

Godin calls 'em like he sees 'em.
Minute Maid lemonade has "zero percent juice," but still commands a big share of the market. Google has lots of "juice," and is riding the wave of unintentional marketing decisions made years ago -- but if Google doesn't learn to effectively market and maintain its brand, Google will go the way of technology dinosaurs like Digital Equipment.
Godin answers the Google Mini product manager by saying the Google Mini may be a great product, but nobody knows about it. Google needs to start a conversation about it, and get out of the way.
Google Maps is a cool product that doesn't solve anyone's problem. Only the digerati elite have an "AJAX problem" that needs to be solved, while the ordinary person is just fine with MapQuest.
Google needs a strategy for what types of products will fill big needs and that "want to spread," not just "doing all the things that pop into people's heads that can be done.
"When we look at fashions that succeed, ... it doesn't really have a lot to do with the last 500 people who perfected it. It usually has a lot more to do instead with being in the right place at the right time with the right story."
"I think you have to take a deep breath and spend an hour" with each product, "and ask 'what's our story,' and should we cancel this right now before it's too late."

More from the Google Maps discussion:

Googler: I was wondering if you had an opinion on what we did wrong with Google Maps. It was really amazing when it came out two years ago, and it spread among all nerd-dom, but my sister visted me over the weekend and she had MapQuest maps, which was a dagger through my heart. And now Yahoo has scrollable maps, Microsoft has scrollable maps, and we've got this cool thing, but nobody knows about it.

Seth Godin: Problem number one is when you launched Google Maps, for most people who need to get to their hotel, they didn't have a map problem. The digerati had an AJAX map problem, there wasn't one. But I didn't have a directions map problem. And the amazing thing about Google Maps, after you first looked at it and realized how cool it was, it was really hard to print, and it was really hard to get the driving directions so I could take them with me when I went. So it's really cool and fun to do so I can look at my backyard with the satellite, so the digerati and the BoingBoing people, we all went crazy. And it made it to the Times yesterday with the Sopranos, it's a really cool gimmick .... but it's not solving anyone's problem, it's an entertainment vehicle.

Mysteriously, it looks like part of the presentation was censored. Between minute 44 and minute 45, the presentation skips something, and you can hear Godin saying, "... because real radio doesn't feel broken." Seems like a continuation of the Google Maps discussion, but I can't really tell what was censored.

The best technology doesn't always win - 3/12/2006 10:46:00 PM

Seth Godin gave a talk at Google that challenged Google to think beyond building superior technology to becoming a superior marketer. I'm sure this is anathema to many Googlers, since as the title of Godin's book suggests, All Marketers are Liars.

But isn't this the real challenge that Google is facing now? They've defined Microsoft as their chief competitor - a fearsome marketer that has never let inferior technology keep them from dominating markets.

From Godin's opening remarks:

If you look at what Digtial was doing when Digital was doing it, nobody had better technology than they did. And the question is how many of you have a Digital computer on your desks - not very many.

There is a belief among a lot of companies, especially in the Valley, especially on this road, Amphitheater Road, that technology wins. But what I want to sell you really hard on, is not that technology wins, because I don't think it does. I think what technology does, is it gives you a shot at marketing.

And if you don't buy into that, then sooner rather than later the company is going to smash into a wall.

Watch online or download the entire 48-minute talk:

Google is a market, not a search engine - 3/12/2006 09:53:00 PM

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.

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