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September 14, 2006 8:45 AM
In Software, It's All About Distribution - And Inventory
Yesterday came news that Google has struck a major deal with Intuit. Today comes news Yahoo has struck a deal with Acer. Both are distribution deals - Yahoo and Google are using their partners as channels to get their software and services into the hands of customers. In short, they are buying new business.
So what are they distributing? That's where it gets interesting. In Google's case, the deal with Intuit gets AdWords in from of small businesses and encourages those traditional Yellow Pages customers to try Google instead. And of course, the deal includes Google Desktop and Maps integration.
But perhaps the least reported portion of this deal is the fact that QuickBooks also purchased StepUp, a small SF-based firm that helps local businesses get their inventory into search engines. In short, StepUp is the automation software needed to virtualize all that small business inventory and make it easily consumed, and therefore searchable, in Google Base, Froogle, and the main Google index.
If you recall my scenario about the transparent shopping society, this is one significant component in getting us there.
Yahoo's deal with Acer is a bit more mundane. It's Yahoo toolbar pre-installed, and setting Yahoo as the default search engine at the factory. This is good for the company, but it's the kind of deal Google was cutting nearly two years ago. The difference here is YPN - with no play to speak of yet, Yahoo can't compete with Google for deals like Intuit. Yet....
- Posted by John Battelle on September 14, 2006 8:45 AM
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I'm baffled as to why the StepUp deal isn't getting more coverage. Another adWords channel is great, but getting small businesses to make their real-time inventory searchable through Google is potentially huge. This would make Froogle's "Search for iPod near you" feature much more valuable. Right now, it's very hit or miss. Of course, the value is to the consumer who knows what they want. The discovery process is not as well addressed. But, hey, this could ultimately help move the Froogle link back to the homepage...
The problem with AdWords is that it's not a simple enough solution for most small businesses. John, you've experienced AdWords as a user. It's constantly changing and the interface is geared more for technical people. Are most small business owners going to understand what to do when their keywords are marked inactive for search? For adequate local coverage with the Google platform, you need to run 2 campaigns, one with local scope and one with national scope. The local campaign contains core keywords and the national campaigns contains those keywords paired with geographic keywords. This catches searchers using big ISPs who are routed through proxies. Those IP addresses won't register in the local campaign. Are small business owners going to make use of exact, phrase, broad and negative matches? Are they going to realize that broad matches are now really expanded broad matches and that they're paying for keywords they didn't type in. Do they realize they've been opted into the content network? Do they realize that's not search engine advertising but contextual advertising?
Google needs to create a simpler version of AdWords tailored for Quickbooks users. Their Starter Edition doesn't cut it. Why? It uses the content network and the budget optimizer, neither of which is in the interest of a new PPC advertiser. No, they need a version that only displays ads on Google and the search network. Quickbooks users need to be able to control the CPCs. If this deal is just a link to AdWords with a $50 credit, I don't think this will be all that effective getting small businesses to use AdWords.
With windows cluster stabiliazing and microsoft shifting its computing paradigm towards "software as service", their won't be a clear winner like Google is now in the search market today.
John,
I picked up a reference on V7N to your comments regarding Adwords being too complicated for small business users. I couldn't agree more.
The original attraction of both Overture (Yahoo) and Google Adwords was the simplicity of the system. Since then as advertising professionals have ratcheted up their spend smaller - and perhaps the original early adopters - users have found themselves swamped.
I do a lot of work in the travel industry. The pay per click medium was great for niche tour operators and travel agents. But now the big corporations are switching budgets away from brochures, commissions and offline advertising and blasting the little guys out of the water.
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