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The phrase "uncharted territory" came up several time during Google's earnings call last week. In the context of the call, the phrase referred to the fact that no one really knows whether conversion rates, CPC prices, or consumer confidence will return to normal anytime soon.
But the phrase has resonances beyond these narrow concerns, because Google's challenges extend beyond the first quarter of '09. As the year progresses, the company may find itself exposed to a number of unmapped hazards, including:
1. Uncle Sam. Think of government regulations as a smoldering volcano. We all know there are hot, trapped gasses down there, but when exactly the mountain will shatter remains uncertain. Google crossed swords with the government several months ago, when its co-marketing deal with Yahoo tripped the DOJ's antitrust tripwire. This battle was avoided, but ominous subsurface rumblings continue, from the FDA (which is now insisting, somewhat absurdly, that 95-character pharma ads include full drug side-effect disclosures), to the FTC (which still hasn't figured out if will allow the online industry to self-regulate). Any and all of these alphabet agencies are watching Google, constraining its efforts to bust out of its core search ad business into true growth areas. And in an era in which only 53% of the American population believe that freewheeling capitalism is a better idea than socialism, Uncle Sam casts a long shadow.
2. Shifts in the competitive landscape. The efforts of Google's competitors to provide a meaningful check on its market dominance have so far been pathetic. And yet advertisers and publishers are clamoring (if not actually dying) for increased competition. I don't buy into the idea that Twitter or another emergent platform can possibly overtake paid search as a sales and distribution channel. What's of more concern is the idea that Microsoft and Yahoo could actually pull their online operations together and get them firing on all cylinders. Before you conclude that this is impossible, recall that Microsoft has gotten a lot smarter in recent months when it comes to attacking its archrival Apple. Instead of running silly ads featuring Jerry Seinfeld, it's taking Apple to task for being faux-cool but unaffordable. And with $100 million budgeted to promote its forthcoming search service (whatever its name happens to be), it's got a lot of ammo.
3. Cornered incumbents. Old media, especially print, is increasingly behaving like a cornered animal fighting for its very survival. Call me paranoid, but when The New York Times' Maureen Dowd, who usually reserves her dragon-like tongue for the likes of Dick Cheney, directs her attention to Eric Schmidt, public opinion begins to be shaped in ways we haven't seen before. Opinions change quickly in the age of Twitter, as we saw last week with the Dominos-disgusting food scandal. Whether or not Google is the key player responsible for the demise of the Fourth Estate is irrelevant (I'd argue, with many others, that the news guys did this one to themselves). What matters is that you can't just smile and throw crumbs to a cornered, frightened, hungry animal without expecting said animal to lurch onto the table and sink its teeth into your face.
Will 2009 be the year when these hazards surface like Jaws, Moby Dick, or U-505? I don't know. But this is going to be a long, long year, for the economy, Google, and everyone working in online advertising -- and when you're in uncharted waters, the smart money never sleeps far from the lifeboats.
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The Newspapers just fail to accurately identify the problem. They keep looking at as if its Internet vs. Print. It isn't, it's a financial issue! It's given a limited company advertising budget where does that company spend its money, Internet or Print or both? Either way Print will always get a smaller cut of the pie because there's another guy in the room.
There's no getting rid of the Internet or increasing the company budget, so if the newspapers want to survive they have to get their money from the Internet and put it back into print production. Since the newspapers sit on the real content creators this should not be a hard thing to do. They just have to stop thinking like printers and start hiring real Internet Marketing people that can solve their problems. hint..hint..
In "Uncharted Territory," we once again see a kind of simplified arrogance in a comment like "I'd argue that the news guys did it to themselves...." This is the kind of thinking that shows no understanding of the economics of business and information. Its thinking that celebrates the advance of technology at the expense of quality thinking and content. Yes, the newspapers are not totally guilt free for the situation they find themselves in. But the notion that everything should be free or highly discounted is not good business either. We are blithley creating a society that shows less and less interest in reading and the diversity of the world outside the latest Twitter. There's nothing wrong with Twiter of Google, unless these modern marvels skirt all responsibility to educate and inform as well as collect revenue and parse out content. Perhaps Google should put together a division of investigative reporters to replace all those who have been displaced. The world will be a sorrier place without checks and balances.
Well, at least one of my "uncharted" hazards seems to have surfaced.
The U.S. Senate will be holding hearings on the Future of Newspapers.
See: http://www.boston.com/business/articles/2009/04/20/us_senate_panel_to_look_at_future_of_newspapers/
Anyone want to lay odds on how many times the phrases "search engines," "parasites," and "revenue-sucking leeches" will come up in the same presentations?
Even though Goggle, Microsoft and Yahoo remain as 800 pound gorillas, opportunity still abounds in these challenging times for aggressive and creative initiatives by those who are committed to staking out a claim to this space. Since I also believe that movement to a recovery is closer than many would like to say.......now is the time for action.
If you have a choice of "searching" on google (what else is there to do?) or yahoo or any of the "search engines" or "searching" on a mobile site (y'all got your mobiles with ya?) that gives you the location (70% of us are searching for retail) and a deal - such as www.GripOffs.mobi where advertisers create their own offer, whether it's just for branding or an e-coupon with a barcode to be redeemed for instant savings at the point of purchase, which are you going to choose?
And, the advertisers see the instant results - they're offering something for all of us on the go that's instant and produces instant results for them.
Google for what? I want the deals. That's what 70% of the people are searching for.
I think I want to know the locations, but I really want to know about all of the deals in my area right now. Advertisers have never had it so good. Once they open their eyes and get into mobile, we're rounding third!