Business Lessons from ‘Google Instant’, the Waifish Temptress of Search

They say dog is man’s best friend. Sure, Fido can fetch your slippers and lick your face in the morning, but so could many of the Kardashian sisters. Even Lassie can’t find Justin Beiber’s favorite color, your weight on Mars, and the best mochachino in Islamabad. For the truly inane and random, you turn to that faithful Google search box. Like a forlorn lover, Google feels you’ve taken this relationship for granted long enough. Instead of taking a fistful of pills to get your attention, Google’s search got a sexy makeover. You’ve probably noticed this new coat of mascara in the form of ‘Google Instant’. ‘Instant’ pre-loads your search results as you type. It’s a neat trick that’s just sexy enough to re-ignite the flames of passion. That is, until you discover its dark, manipulative soul. Google Instant is the Russian mail-order bride of search, a brilliant business move steeped in ulterior motives and glorious lessons.


WHAT IS THE ‘GOOGLE’?

I’m often amazed by how many smart businesspeople, who wear suits and everything, consider services like Google Apps, Android mobile software, or Google Checkout as ‘businesses’. Not exactly. As legendary techie Leo Laporte puts it, Google has one business – getting you to use the Internet, mainly to sell ads. Google knows the more you use the web, whether its through phones, TV’s or a Technicolor Dreamcoat, chances are you’ll be using a Google product. That usage (and data gathered along the way) ensures Google sells even more ads. They’ll drain the blood of baby pandas to make sure of it. (I’m joking, they’re not evil. Muhahahahaahaaaa!!) The formula is simple and to some, frightening: enter an inefficient business, do it better, scale it, then practically give it away in exchange for ad revenue. Good thing I sleep with a Taser under my pillow. Go ahead Eric Schmidt, 50,000 volts says you can’t pry ideafaktory.com from my cold, dead paws.

THE ‘INSTANT’ (C)ON

It’s clear that Instant will eventually lead to a SWAT team firing tear gas through your windows for crimes you’ve only started to consider. For now, its beauty lies in one simple fact: it only shows 10 results at a time. By positioning it as a breakthrough, complete with press conference and Parmesan crisps, Google earned just enough goodwill to change your default search settings from as many as 100 results to 10. Here’s how it helps Google:

  • Big Revenues- It multiplies the number of page views several fold. Each page means more ad placements. Let’s do some math. Let’s say:
    • Google can successfully switch 30 million people from seeing 30 or more results to 10 at a time
    • Each person will now have 500 three-page searches a year (instead of one pagers). That’s 1000 extra pages of ads per person per year.
    • Let’s say each new page yields $3 of revenue (between Adwords and clicks)

That’s $90 BILLION in new revenue a year!! From thin air. Even if you drop it down to 10 million people and $1 per page, that’s still $10 Billion! I’m amazed they didn’t serve Beluga caviar and panda snouts at the press conference.

  • Cost savings – A second, less sexy benefit to Google is reducing server load and energy cost. Serving up 50 results at a time strains Google’s servers. But showing 10 as you type, helps disperse server load and likely, keeps the machines from revolting against their oppressors.

Even if you deactivate instant, you’re still stuck on 10 searches, unless you make an effort to change it. Naughty Little Google hopes users won’t bother. Many won’t. It reminds me of the dawn of ATM’s. First, they were free, convenient ways to get your cash after 3pm. Then, banks cut tellers. Eventually, fees made ATM’s a big business. Now, few complain about their $3 tariff and the scary homeless man holding the door at Chase at 2am.

SOME ‘INSTANT’ MAGIC FOR THE REST OF US

Few businesses are as crafty or monolithic as Google, but most have ideas of things they’d like customers to do differently. The question is, what to offer in exchange? One approach is to:

    • Get some creative people together and list the behaviors you want:
      • “I wish customers would stop (calling El Salvador on the demo phones)“, or
      • “If only we could get consumers to (use our lotion in more places)“.

  • Pick the top five and brainstorm what to offer in exchange for each. Be realistic. A measly 15,000 bonus miles won’t get your customers to re-name their daughters, ‘Lufthansa’.
  • Take a few days to refine the best ideas, cost to implement, and possible downsides. See how other companies achieve that behavior, especially those outside your industry.
  • Choose the best ideas and try them on a small set of customers. Keep experimenting until you find the right mix. When little Lufthansa Faktor is backpacking through Europe for free, your work is done.

 

With Instant, Google brought the classic “New and Improved” sticker to the digital world. Sure the new Folgers coffee is 4 ounces lighter, but it amazingly makes 20 more cups of coffee! Unlike Google, Folgers doesn’t give you a way to recover those missing ounces (or check their math). If you dare, this game is more art than science. The economics are easy. Keeping French farmers and snarky bloggers from rioting in the streets (or at their MacBooks), is less so.

GET NEW ARTICLES BY EMAIL

2 Comments

  1. Dima October 7, 2010

    Brilliant analysis

  2. Anonymous March 28, 2011

    Conquer w/Dima. Brilliant analysis, and very clever explanation. Loved the Austin Powers/Dr. Evil reference.

Add Comment Register



Leave a reply