Thursday, October 7, 2004

Google's Book Moves Raise Eyebrows: Will they Raise Revenues?

Talk about a firestorm. The Wall Steet Journal and practically everyone with a PC comments today on Google's move to expand its support of online book searching in a release of yet another "Beta" (read: we won't scare companies that we're threatening too much in the beginning and learn how to work with them) called Google Print to be announced at the upcoming Franfurt Book Fair. Several major publishers will support this initiative, which will split ad revenues from search results pages featuring book excerpts with Google as bait to get their content in the fold. Purchasing of books will still proceed through vendors such as Amazon, so on one level the established order is not impacted too radically. But going to an ad model that benefits publishers who previously could not benefit from them is probably the most significant aspect of this initiative. Finding ways to monetize content contextually is the true genius of Google, which is harder for store-model outlets such as Amazon to replicate - hence their dabbling with their search engine initiative. And hence the continuing moves of Google to work with major aggregators and publishers such as Reed to come up with innovative ways to provide valuable contexts for subscription content.

Is this really bad for Amazon and other market-oriented models in the end? Probably not - the media's crunching on Amazon is largely misplaced. At its core the Google model is not a store-based fulfillment and community model: it's still very much along the lines of their presentations in which they tout the "Star Trek" ideal of a machine that can answer any simply stated question with authority. Being able to find book content in a context that makes it as valuable as possible only increases the likelihood that it will be purchased in some form. In the meantime, having more ways to monetize book content without having to turn physical book unit sales should encourage publishers to explore other ways to monetize the perceived value of book-based content. Perhaps this capability will be the impetus to start moving publishers into eBooks in more earnestness? The publishing industry's tendency to change at a near-glacial pace make this wishful thinking just now, but in the end this and other moves by Google to make premium content an integral part of its universal search strategy are the fulcrum that is changing many fundamental concepts about how to build premium content profits - and keep Google at the epicenter of The New Aggregation.
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