Less Is More and Will Google Own Local?

This comment by Google CEO Eric Schmidt struck me in reviewing the Google earnings call transcript:

We are showing fewer ads per search on a much higher quality and much better monetization. So again, the targeting and the technical work that we are doing is producing better return for advertisers, better revenue for us, with even fewer advertisements on a comparison basis. We are experimenting with new ad formats.

Fewer ads = more money. Yikes!

And now, from Bill Tancer at Hitwise, here’s recent market share data comparing G, Y, M:

google 13107.PNG

Of course, the (December) numbers are different over at Nielsen:

Nielsen

Others argue that Google’s share is even more dominant than these numbers reflect.

Google is really in the driver’s seat on many fronts right now. Turning to local, the company recently enhanced its local OneBox presentation of results. (Here’s a recent general post on Google OneBox.)

Google is not the best local application online by any means. (Yahoo! Local, Ask and Yelp, for example, are better.) It has taken some steps to improve the user experience but it could certainly do a great deal more (e.g., “sort by rating,” “click to compare businesses,” etc.). One wonders why not? Maybe Google is distracted by all the initiatives going on there, doesn’t feel it needs to upgrade the application and/or doesn’t want to threaten its partners too much.

Whatever the reason, the company is not doing all it could in local. But Google is probably now at the peak of its market dominance (I could be wrong of course). And with a few simple tweaks it could literally dominate local — verticals are different — because of its general search volumes.

There are also a range of things that Google could also do on the revenue side that it isn’t doing to attract more SMB advertisers. (Clearly a $3+ billion dollar quarter suggests there’s no urgency there.) Curiously it hasn’t (yet) done them either.

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One Response to “Less Is More and Will Google Own Local?”

  1. juliemarg Says:

    i think google local is a bad product. with only 3 businesses showing in the onebox, the likelyhood that you get something you want is pretty slim. The 3 that are highlighted seem to be randomly selected. I think yahoo local is much better, the sponsored search section seems to be random, but at least the white part is based on how close the business is to me. which is all I really care about.

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