Commentary

Will Google Become More Of A Content Creator?

by Laurie Sullivan , Staff Writer, February 8, 2011

Editorial content could generate inventory to sell without relying on third parties. Google employees already write blogs on everything from mobile to enterprise to public policy to search. It would not be a stretch to acquire a publisher like Search Engine Land and sell ads against the content. Let's hypothesize.

Google wouldn't be the first search engine to make the leap. Yahoo will support more editorial content in 2011. AOL on Monday reported paying $315 million for the Huffington Post. This follows AOL's acquisition of TechCrunch, reportedly for an estimated $30 million.

"Portals, or any company including search that can deliver permission-based content to consumers, will produce a superior experience," says Jason Fairchild, chief revenue officer at OpenX. "They would be in a great position to deliver more."

Tweak the business model a bit and could a search engine happily acquire any type of publisher? Not all are convinced that a search engine could acquire a search engine marketing publisher. "Tough to say," admits SEOmoz.org's Founder Rand Fishkin. "Could a computer device maker buy CNet.com and have no conflict of interest? Seems unlikely; I think it would be challenging to maintain editorial integrity. AOL's acquisition of TechCrunch is likely a good corollary."

Search engine marketing company Distilled Cofounder Will Critchlow had a similar view. "I wouldn't call it a conflict of interest necessarily, but it does seem likely it would compromise the editorial quality of the publication to be closely aligned to a search engine," he says, referring to a search engine marketing publication.

Vertical integration isn't uncommon as industries mature. Think about Google's purchase of YouTube. In a way, they have already gone down that path. Although the Mountain View, Calif. tech company makes the majority of its revenue from ads, it needs to find a way to increase profits.

If Google has a superior monetization platform for search and contextual, and they're pushing this direction in display, it would make sense for them to control more information or editorial content rather than rely on partners to give them access, especially as search becomes more competitive. It's not uncommon for companies to want to own the full value chain -- from the advertising to the content -- because it generates movement for the inventory.

Some industry observers call Google's inventory constrained. The number of searches that people conduct monthly don't drive enough growth for Google -- one reason why the company must diversify offerings to generate revenue in other sectors such as display. It would support the hypothesis that Google may need to expand by adding editorial content. There's more competition that's cutting out Google Content Network, which reduces access to inventory and cuts their ability to drive advertising revenue.

"You can be more aggressive about how to pay for third-party inventory or acquire your own," according to a source requesting anonymity. "We've seen examples of companies that have done both."

display, google, search, yahoo

6 comments about "Will Google Become More Of A Content Creator?".

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Chris Nielsen from Domain Incubation, February 8, 2011 at 2:58 p.m.
Perhaps. That may partly explain their actions in suspending our 8-year AdSense publisher account. We appealed but no use and no explaination. The best we could get from them after all these years was something about the "risk" their advertisers.
I think you may be right. They are figuring out that they don't need content publishers that fall below their "standards" and by publishing more content themselves the take that much more from advertisers and put it into their own pocket.
Note to all companies: When you work with someone for many, many years and decide things are not working out, you really need to have a heart-to-heart and explain your reasons and allow a chance for a response. To not do so will for sure generate resentment that is roughly square to the number of years you were partners.
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Michael Martinez from SEO Theory, February 8, 2011 at 3:56 p.m.

February is turning into a REALLY slow search news month.

Paula Lynn from Who Else Unlimited, February 8, 2011 at 6:28 p.m.

Chris: They don't have to and they won't. For them, it's just business and do not care. You do know about at will states that allow employers to dismiss an employee without having any reason and not say a word.

Darren Davis from Artisan News Service, February 8, 2011 at 8:04 p.m.

I think before they produce content they'll try to work on ad inventory and pricing. There is room for growth in CPM advertising. If the other companies can get CPM (a BIG if) for their new properties then the bar will be higher than it currently is. Google (who was Associated Content long before that company was formed) will get their share of that pie. It's probably 1/10 of what it should be and what it could be once others help the whole online video industry prove what it is really worth.

Tim Davenport from ScienceOps, February 9, 2011 at 5:42 p.m.

Google's need is the advertiser's opportunity. We see this need every day on the GDN. There's a vacuum of content-specific pages. Savvy advertisers take heed.

Brian Hayashi from ConnectMe 360, February 15, 2011 at 2:21 a.m.

Um, how is this news?

Google launched boutiques.com last year. Content site for women's fashion.

Google just launched Google for Weddings. Also content site.

I would argue no one knows more about the consumer mindset than consumer goods giant P&G. P&G just launched ManOfTheHouse.com, an advice for manly men who have questions about running the household. Apparently, tracking mouse clicks is easier than continuously asking consumers to participate in polls and surveys. (I believe internet entrepreneur Adam Rifkin was the first to call this practice "bacn".)

Not only will you see more of this practice in the future, but I believe that the move to content was a big driver behind Google's purchase of ITA Software last year. If I'm right, you'll soon see lots of content about places to go, along with embedded ad units allowing you to BUY NOW. Compare this with the inefficient practice of having to go to a site like Expedia, and all of a sudden you see where this is going.

And as for the hotels, etc buying the ad units? Expedia is paying them a paltry 3-to-1 on their contributrion, just because they're the only game in town. I just hope Google pays hotels closer to the 5-to-1 they need in order to keep the lights on.