If Google does move ahead with its much-rumored IPO this quarter, it will be a crowning vindication for a business model that's far-removed from the prevailing wisdom of the dot-com days.
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| "Where can we expect the next Google or eBay to arise? One potential source stems from an interesting initiative begun this month by Dan Bricklin, founder of small business sitebuilding vendor Trellix and inventor of the legendary VisiCalc spreadsheet." Give us your feedback in the ASPnews Discussion Forum |
When Google started out, mainstream opinion saw the Web as an electronic version of the existing big-business world. There would be a few dominant stores, a few dominant publishers and a handful of portals that took you there.
Five years later, and the big successes of the online world are the ones that catered to all the Web's small fry. Online auctioneer eBay has become a billion-dollar business — and could hit $2 billion revenues this year — by enabling individuals and small businesses to trade among themselves (see Could eBay Have a $2 Billion Year?).
Google found success by ranking sites and pages according to how many other sites were linking to them. Everyone with a Web site, however insignificant it may be, gets a voice in this process by virtue of the links they publish, and the sum of all those voices produces uncannily accurate results.
Adding Ads to Technology
But the technology is just one half of Google's success story. Although its main activity is as a search engine, Google's business model is founded on putting relevant advertising in front of people while they're searching the Web. Its small, unintrusive, text-only ads are successful because they're a win-win for both buyers and sellers. Unlike banner ads, they require only a small investment by advertisers to bring in a response, and users like the fact that they normally add to the search results rather than distracting from them.
Although we're not privy to Google's financials until it lodges those long-awaited IPO filings with the SEC, you simply have to look at the performance of some of its partners for clues to the profitability of its context-specific ad model. Ask Jeeves has found that supplementing its search engine listings with Google's paid links has been so successful that this month it abolished banner ads from its Ask.com site (see Ask Jeeves Bans Banners). Even Yahoo!, whose paid listings come from Google rival Overture, now earns almost a third of its revenues from listings and other service fees (see Yahoo! Posts Profits on Marketing, Fees Growth).
All of these successes have come through listening to and empowering participants in the network, instead of trying to hector and dominate them. The old dot-com model was all about push — pushing content, commerce and global brands. It's been replaced by a new model that thrives by enabling connections — something we should perhaps always have known would be well-received on the Web.
The Next Big Thing
Where can we expect the next Google or eBay to arise? One potential source stems from an interesting initiative begun this month by Dan Bricklin, founder of small business sitebuilding vendor Trellix and inventor of the legendary VisiCalc spreadsheet. Called SMBmeta, it's an XML specification for a file that a small business can publish at its Web site, giving basic information about what it does, where it operates and how to find out more.
The beauty of this is that it provides core information that would normally have to be painstakingly compiled into a business directory, and instead makes it instantly available at source, in a form that can automatically be scanned and filtered on demand by search engines, online catalogues and other aggregators.
As Dan explains in an introductory essay, a standardized, public file format that's easy to adopt and maintain has been shown to be a powerful platform for innovation. If the specification gains ground, there's tremendous scope to combine information from SMBmeta files with Google search results, eBay trading capabilities and other network-friendly resources in highly innovative ways.
Following the acquisition of Trellix last month by Web hosting provider Interland, SMBmeta has the backing and resources to get off to a good start (see Interland Finishes Holiday Shopping, Buys Hostcentric). As a major home for small business sites, Interland is perfectly placed to encourage the early adoption that's required to create sufficient initial momentum. The next step will be up to the network, and to a new generation of connection-minded innovators.
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