Google Strategy: If You Can’t Buy ’em, Use Your Dominance to Crush ’em
Yesterday, Reuters reported that Google had promoted its new daily deal product, Google Offers on its home page for the first time. Reuters called it “a rare instance of the Internet giant using its prized online real estate for advertising.”
We’d call it, Google leveraging its dominance in search to subdue its rivals (e.g., Groupon and Living Social) in the adjacent “daily deals” market.* Google’s promotion of its Offers product goes beyond the homepage. A search for “daily deal” on Google also shows Google Offers is taking the top spot.
Here’s Google’s strategy in a nutshell: Google attempts to acquire a company; is unsuccessful (reportedly because of antitrust concerns); uses its dominance in search to favor its own product over the products of its competitors, steering users to what’s good for Google, not necessarily what is best for users.
If it sounds familiar, it’s because it’s a lot like what happened with Google and Yelp. Recognizing that local search was the next big thing, in 2009 in an effort to get into local search, Google tried to acquire Yelp. Yelp walked away.
Google couldn’t buy Yelp, but that wouldn’t stop the search giant from getting what it wanted. If Google couldn’t have the technology for itself, it would just take the fruit of the technology – the content and user reviews that make Yelp one of the most popular local search sites on the web.
Google did this by “scraping” content from Yelp’s pages and serving it up as search results in Google’s own “Places” product.
In Yelp’s CEO’s own words: “Google’s position is that we can take ourselves out of its search index if we don’t want them to use our reviews on Places…. But that is not an option for us, and other sites like us – such as TripAdvisor – as we get a large volume of our traffic via Google search…We just don’t get any value out of our reviews appearing on Google places and haven’t been given an option other than to remove ourselves from search, how to improve this situation.”
*If you thought “using its position in Internet search to subdue rivals in adjacent markets” didn’t sound like FairSearch, you’d be right. That comes from news reports outlining the FTC’s antitrust investigation into Google.