Google Commerce: Search giant makes an under-the-radar shopping play

Amidst the noise over the new Droid handset, Google's new free GPS navigation application, and Rupert Murdoch's dance with Microsoft (MSFT) to put News Corp. stories exclusively in the Bing search engine, Google (GOOG) slipped in another new product that could prove to have far more impact on its bottom line. On Nov. 4, the dominant search player unveiled a new search engine product geared to help e-commerce sites provide better intrasite search capabilities to users browsing wares. The move comes at a time when the online shopping world is heating up, with Amazon (AMZN) rapidly expanding it's non-book offerings, and (WMT) slashing prices to show up Jeff Bezos and his Seattle team at Amazon.

Called Google Commerce, it is likely a variant on Google's popular custom search engine product, which allows any site administrator to harness the power of Google to provide comprehensive search capabilities covering only content within their specific site. More broadly, Google Commerce could be part of a budding effort to insert the search giant more squarely into online shopping and grab reams of data to help it sell more ads.
As anyone who spends a lot of time shopping online can tell you, searching e-tail sites is often a chore. Google Commerce promises to make it easy for e-tailers to quickly install potent Google search tools on top of existing site architectures. As with all other things Google does, this is likely a long-term data play aimed at filling gaps in Google's information on online shopping behavior. Google's own online payment service, Google Checkout, has failed to gain significant traction against sector heavyweight Paypal, a subsidiary of eBay (EBAY). And Google's own shopping search engine, Froogle, has long remained a distant player in the highly lucrative vertical shopping search engine market.

This segment has yielded big exits for PriceGrabber, and Shopzilla -- all of which were bought out for scads of money -- and remains a potent force in directing customers to merchants willing to pay to get them. Shopping search engine companies charge e-tailers either for placement in their search engines or are paid a portion of any proceeds from purchases made by customers who arrived via their sites.

Customers Get Quality Searches, Google Gets Quality Data

Getting better data on how shoppers behave could ultimately help Google better compete against shopping search engines. Perhaps more radically, the search giant could use data gleaned from disparate e-tail installations of Google Commerce to fine tune its own advertising algorithms to increase efficacy and market share.

Easy to install and configure, Google Commerce will allow shoppers to browse by types of products, price points, brands and other key differentiating factors that can make or break an online shopping experience. In this, Google is a applying a key lesson already learned from its general search practice: People who can find things more easily are more willing to buy.

"Search quality is a big factor in changing visitors to buyers online, and in making customers happy too," says Google on its official blog, where news of Google Commerce first surfaced. "Visitors spend an average of just eight seconds before deciding whether or not to remain on a website, so having a good search tool is important for turning visitors into buyers."

Google Commerce will also have other signature Google functions such as its auto-suggest/spell checker (e.g.: "Did you mean: bicycle helmet?" when you type in "bicycle hemlet.") and will give merchants the capability to customize product links within their site to group suggested buys more easily. Ultimately, if the product takes off, we should expect to see all the features that Amazon offers. And therein may lie the rub. Google could be trying to build a distributed version of piece by piece that can later be brought together on a branded Google portal, or perhaps to fuel a revival of Froogle.

True, Google has long struggled to gain real traction in enterprise. Its enterprise search products for corporate intranets haven't gained nearly the same dominant market share as its consumer-facing search products. And Google's corporate applications, while making headway, have failed to make a big dent in Microsoft's market share for email and productivity software suites. But keep in mind, this effort is something of a no-brainer for Google. The engineering hours required to build Google Commerce out of existing Google search products were likely trivial for a company of its size. And with even a small number of adopters, Google Commerce could provide reams of useful data on how shoppers behave inside websites. With Google, it's always, always about the data -- data which can later be used to harvest more dollars off the Web.

Alex Salkever is Senior Writer at AOL Daily Finance covering technology and greentech. Follow him on twitter @alexsalkever, read his articles, or email him at
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