Google: Free Here; Paid There


Google may be a lot of things, but it's certainly not boring. Just this week in fact, it did several interesting revenue model back-flips, changing one product to free and making another one paid.

Let's start with Zagat. Zagat sells its content, in print and online. Not a revenue model Google knows anything about, but that didn't stop Google from snatching up Zagat for around $150 million in 2011. I predicted at the time that Google would make Zagat content free and dump in into Google Places (home of its user-generated business reviews). What happened? Google announced this week that it will make Zagat content free and dump it into Google Places. Google Places, in turn, will be dumped into Google Plus, as part of an initiative to shore up Google's faltering response to Facebook.

Google hasn't thrown away all of Zagat's revenue, at least not yet. You'll still be able to buy the print Zagat guides. Google will still charge for the Zagat iPad app. And my suspicion is that Zagat's real source of profit, gift copies of the guides imprinted with corporate logos, will continue. Make sense? If so, click here.

The biggest question for me is what happens when you mix Zagat's edited, witty, curated reviews with a much larger grab-bag of user generated reviews? Will Zagat reviews shine, or get lost in the sauce? Will people continue to submit reviews to Zagat when they can get immediate gratification (and reach the same audience) with a user-generated review? Sure, the Zagat brand is strong, but Google is sailing into uncharted waters, and I am not sensing a strong hand on the tiller.

This very same week, Google decided to rebrand its Google Product Search service as Google Shopping. And with the new name, Google decided a revenue model might be cool too. So the new Google Shopping service will be paid inclusion. Yes, Google Shopping is now a buying guide.

Charging for inclusion in the product directory (Google daintily calls this "a commercial relationship with merchants") is apparently the first time a Google-created service has gone from free to paid. Also, as you read Google's rationale for this shift, you realize that it has spent a lot of time and money to learn some basic truths about data publishing, for example:

  • Even companies that do make the effort to submit product information in structured format are lousy about keeping their information current
  • A smaller database of highly accurate data is more attractive to most users than a larger database of moderately accurate data
  • Structured data permits far more powerful and precise searching of product information

So while I have historically been at a loss to figure out what Google is doing, it's getting easier these days as Google moves ever-closer to doing everything, all at once. Just don't try this strategy at home!

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