Saul Hansell, in “New at Google, Local Coupons,” declares:
Google is expanding its local directory business using the same sort of disruptive tactics it has used in other areas: giving away something for which others charge.
The disruption portrayed, however, is of the same ilk as Google’s predatory pricing model of Google Checkout designed to “lock-in merchants as AdWords customers by not charging AdWords clients for…payment processing,” as I present in “It's official: Google launches 'Checkout' with predatory pricing model aiming to 'increase advertising spending'”:
Google has officially launched its ecommerce payment service with a predatory pricing model to lock in its advertisers, increase advertiser spend with Google and attract new Google advertiser customers.
In “From Search Engine Strategies to San Francisco” this morning, I reflect on Google CEO Eric Schmidt’s unsubstantiated bravado at the Search Engine Strategies Conference last week.
The Google CEO’s penchant for flippant commentary on matters of substance to his company’s advertisers is as disconcerting as Google’s disingenuous official pronouncements that it selflessly promotes small businesses for free.
Hansell quotes Shailesh Rao, Google’s director of local search:
Mr. Rao said Google saw coupons as content that it would place on the Internet free. This is much the same as Google Base, a service that carries free classified ads and other information for individuals and companies.
In “Google Base obtains the world's content for free, Google.com capitalizes on it,” I put forth Google’s shrewd strategy to obtain “the world’s content” cost-free and then monetize it by both selling ads against it, and by selling AdWords to the content owners, who had been enticed to provide Google with its content via promises of free Google promotion:
By distributing to Google search properties the content it has acquired for free via Google Base, Google monetizes what it has obtained cost-free, by selling ads against it at Google.com.
For Google, however, making money by selling ads against free content is not sufficient. Google wants the owners of the content it obtains, cost-free, to pay Google to “distribute your content to different Google search properties,” via Google AdWords.
Hansell acknowledges same, but portrays Google’s hidden, bottom line profit motives as beneficial to small businesses:
Google will soon allow businesses to buy ads that will appear on its search engine to point people to their coupons, just as it sells ads that drive traffic to Google Base items.
If businesses must buy Google ads for their coupons to be found at Google, then Google is NOT “giving away something for which others charge.”