Tuesday, October 04, 2005

Google to shake up online classified market?

The key take away in regard to classified ads being searchable by Google is that vendors will need to convert from a pay per listing model to a pay for performance model.

A big site, such as Cars.Com, would continue to have steady customers who automatically go to that site. It would also get a lot of hits from Google searches. Efficiency wins.

Using cars as the example, most of us would prefer to key in our search at Google rather than go to individual sites to search the inventory at that location. Those with a car to sell would not need to advertise it in various locations. The situation is like electricity. Since electricity was first sold commercially on wall street, the efficiency of it has won a bigger and bigger market. The cost to light or heat a home has dropped in real terms. However, the amount being used has grown exponentially.

There was a WSJ article in the past few days lamenting the concerns of books sellers. It seems Amazon is selling "nearly new books" at dramatic discounts. The process of posting an ad is going to become easy and routine. If it costs nothing to post, the number of postings will rise. The availability of goods and services will rise. Inflation will be reduced. EBAY and AMZN will be challenged by Google.

I believe these companies will coexist well. The Googleads will help EBAY and AMZN attract customers. Power sellers will still build and maintain sites at EBAY and the auction model will continue to be one method of selling goods. UPS and FEDEX will cut delivery costs when it becomes routine to stop at many houses per neighborhood each day.

DO THE GOOGLE GULP! For more information on Google's next cha-ching:
New Media ReprotNews.com
Breaking the Media Code
Blasted News
Daily Technology News