Why Google is poised to dominate the ad business
Last week's Journal described Google's strategy to build an ad platform outside of the online arena. In essence, radio, television, and some print ads will be purchased using Google's famed auction-style format, made famous by its AdWords and AdSense technologies.
There are skeptics. Many doubt that Google can play effectively in the old-media world, a venue dominated by tradition, relationships, and ad agencies. And, who knows, near-term they may be right. However, it's clear that Google is well-positioned to dominate this space. And it looks like it may be a lot easier than many pundits suspect:
1) By their searches, you shall know them: Google knows who you are and what you're looking for. In other words, if you Google "pizza 02174," the search engine has nailed your immediate need and your probable location.
2) Presence: Through Google's increasingly popular Gmail and Gtalk services, Google knows where you were last summer. Plus, they know where you are just about every minute of every day. The Gmail and Gtalk clients are also available on a wide range of smart-phones, which ensure that, even when you're not sitting at your desk, you're still using Google's communications network. So, Google knows exactly where you are.
3) Software platforms: Google's hiring practices ensure that they fill their recruiting funnel with the best and brightest software developers. No other company, from online to offline, appears to come close to Google's exceptional due diligence on development talent. And that very talent is exactly what you need to deliver advanced technology platforms that are scalable, secure, and easy-to-use.
4) IPTV, etc.: Here's the best part. As video and audio streams move to the Internet, Google can provide micro-targeted advertising to individuals, not just households (though, heaven knows, households would be nirvana for advertisers). In short, IPTV's headend-to-workstation signal delivery over IP networks promises to allow one-to-one television marketing.
Put simply, Google is poised to dominate the advertising world for reasons that may not be entirely clear to legacy media. Suffice it to say that it has positioned the chess pieces in such a way that a checkmate is not only possible, it's highly likely.
Full disclaimer: the author currently owns Google shares.