Now Google bets on high stakes in advertising

Updated: Nov 19 2005, 05:30am hrs
Google is poised to enter the highly competitive classified advertisement business, posing a threat to online and traditional businesses in that field. Recently, the dominant Web search site, was planning to introduce a service called Base, which it said was intended to permit internet users to upload files and other information to Googles servers and make them searchable by category.

Currently Google displays the results of queries as a simple list, ranked by relevance. Google Base would allow searchers to pull up information organised by any subject. Google, however, has not said how it will display information organised into groupings, like homes, cars or jobs. Initially, the service will be free. During an interview at Google headquarters recently, Salar Kamangar, Googles vice president for product management, said the new service was experimental and cautioned against viewing it as an imminent assault on the classified advertising business because it could be used in far broader ways. Still, several industry executives and analysts said they believed that Google Base was an aggressive first step in a series of manoeuvres that would position the company as a powerful player in the $100 billion annual market for classified advertising.

The general industry perception is that Google could potentially transform that market, which has already been shaken by the rapid shift to online searching and the free-listing services offered by Craigslist.Its very clear that Google is planning to launch a classified advertising product, Peter M Zollman, publisher of Classified Intelligence Report, an industry newsletter. It will be a huge threat to traditional classified businesses.

The newsletter, recently, reported on a Google patent application filed in March 2004 for a service called Automat, which the newsletter said went so far as to use the URL address classifieds.google.com in several drawings. The application was titled System and Method for Providing On-Line User-Assisted Web-Based Advertising. The company said in a statement, Prospective product announcements should not be inferred from our patent applications.

Google Base touched off widespread speculation last month when the company accidentally exposed a portion of the service because the companys Web servers were briefly configured in correctly.

The system is intended to simplify the process of making either small or large amounts of digital information easily accessible. Google Base, Kamangar said, offers fields that will permit users to label and define the attributes of each piece of information they upload to Google. The information can then be quickly indexed by the companys search system.

Kamangar said the service would enable users to store all kinds of information ranging from DNA sequences to home recipes, allowing both commercial and noncommercial uses.

We saw there were large instances of information we didnt have and couldnt make searchable, he said, noting that, we realised that we could make it possible for people to make information on information available.

A variety of Web services like Technorati and Flickr already use a mechanism known as tagging, which makes it possible for computer users to categorise Web pages they have found and to annotate them.

Google Base would offer users a similar function.

In shifting from scouring the internet for information with Web crawler software to allowing users to contribute data by category to a structured database, Google has added a new computing facility, the company said.

Until now, information acquired by the Google Web crawler has been organised in a vast index. The engineer said that the new database was not a complete relational database, the most common kind of database, designed more for flexibility than speed. There is intense industry interest in what Google will do with its Base and Automat services as well as an online payment system that is reported to be under development. The company faces several challenges if it does decide to enter the classified ad market, a move that would put it in competition with companies like eBay, Monster.com and CareerBuilder.com, which are currently all major Google advertisers.

In fact, recently Google searches were to direct job seekers to specific listings on the CareerBuilder Web site. A CareerBuilder executive said any concerns about Google competing with CareerBuilders listing site were speculative.

We would have to see what it looks like, said Richard Castellini, CareerBuilders vice president for consumer marketing. There are a half a dozen scenarios out there; some would and some would not be competitive.

Google currently is dominant only in its Web search service, while its other offerings like e-mail, news and maps, all significantly trail competing services from Yahoo and others. Googles success in gaining classified revenue might depend on the degree to which it is able to integrate the information into its main search offering.

What will really be interesting is how they actually display it in Web search results, said Danny Sullivan, editor of SearchEngineWatch, an online industry newsletter.

Ultimately, Googles reach will help determine its success in the classified business. I think they can be a very serious player in this business, said Ellen Siminoff, chief executive of Efficient Frontier, a Mountain View, California, company that helps its clients turn up higher on search sites. They have enormous assets to leverage.

Johan Markoff / NY TIMES