Location, Search and Google’s Patent

Google’s patent awarded last week for using location in advertising is interesting news (patent details here via VentureBeat). Not because of the dramatic effect (dun, dun, dah) it might have on the industry . No, the key point here is they submitted the patent for consideration back in September 2003.

This is significant because it shows the foresight Google has.

Sure, the concept of location isn’t new – people have been talking about it (or at least claiming to have talked about it) for more than a decade. And recently the talk has reached mainstream discussion. But most of that talk (myself included) has been about location enabled services.

Google on the other hand – with patents like the one mentioned above – was proactively making monetization plans seven (7) years ago. To put this in perspective time-wise, this is around the same time they launched AdWords.

This is another indication of the gulf between Google and its competitors (Microsoft, Yahoo, Facebook, Apple, etc) when it comes to search. Google has been working on these concepts for so long now, it’s difficult to see how any of their competitors can catch up (especially when we see how primitive Steve Ballmer’s ‘insights’ remain – discussed later).

By the way, don’t get worried about Foursquare, Yelp and other location enabled services, they won’t be affected (contrary to what some blogs misunderstood) since this patent is about using location in advertising delivery. They’re safe. Rather, it’s the companies that use location in their advertising services that should be feeling uncomfortable – for example if Opera uses location information to alter inserted ads in the compressed pages they return.

Aside: Location versus Local Search

BTW, a little clarification on location in search versus local search (since they are often confused). Both are surprisingly complex but here’s a simple overview:

Local search is when a user searches for something specific to a location eg ‘sydney airport parking’ and the results that are returned take the location terms (‘sydney airport’ in this case) into account.

Using location in search is about search engines using your current location to tailor the results you get eg searching for ‘nearest hospital’ would be a situation where you’d experience this. The search engines have done this for years based on broad location (eg IP address based) and are constantly refining it based on other factors (eg GPS, Wi-Fi and cellular triangulation). And obviously, mobile devices are a particularly appropriate platform for this.

The two can overlap eg when you are physically at Sydney airport and search for ‘nearest parking’ you’ll likely get similar results – often referred to as the ‘where I am versus where I am going’ overlap.

But the big opportunity is when it comes to advertising. Advertisers want maximum control over where and how their ads are shown, and under what circumstances (eg based on the searcher’s specific location, and what they are searching for). Plus in most markets the location will be used for non included keywords (eg searching for ‘nearest dominos pizza’ can return results for other vendor’s locations as well – not just other vendor’s ads).

[BTW it’s not just traditional ads – already we’re seeing Google charge for enhanced organic location results in their 7-packs.]

But back to Google’s foresight…

OK, so we know that location is important, right? Google obviously saw the dollar potential back in 2003.

It’s foresight like this that makes me wonder what Google is working on and patenting now.

By the way, I’ve been following Eric Schmidt a lot more lately. Not that I think he’s particularly charismatic, but I do think he’s fucking smart – even if he still doesn’t get privacy :-).

No matter what he’s questioned on, he brings an interesting perspective. Take his off-hand comments about Twitter (recorded a year ago) (thanks to Matt Cutts for the link). Most people think about social interaction. Eric thinks about storage and identity. Google is, at it’s core, a data company, and they approach Twitter in terms of data. I wonder what patent they’ve got in play there…

What about Microsoft?

Let’s move on to Microsoft. How will location, mobile advertising and Google’s patent affect them. In fact, how is Microsoft responding in general to the moving target that is Search. Perhaps Steve Ballmer can bring us up to speed…

Unlikely. What a disappointment Steve Ballmer’s keynote at SMX West last week was (embedded below). If you haven’t got time to watch the video (it’s 49 minutes) have a read of Jennita’s summary on this SEOmoz post or Lisa Barone’s excellent coverage on this Outspoken Media post (oh and while you’re there make sure you subscribe to the Outspoken blog – highly recommended).

This could have been *the* opportunity for Microsoft to give us some confidence about their search initiatives; some insights into how they’re going to change the game. But no. Instead Steve trotted out much of the same stuff he spoke about at MIX 08 (yes, two years ago). At the time I’d been impressed with his perspective, today I’m wondering what else he’s going to do… because passing references to personal search, social search, cash back, alluding to game-changer, and an understanding that the ‘search market is still young and we see opportunities’ won’t cut it.

Admittedly, part of the problem was Danny Sullivan’s questions – they were *soft hitting* to say the least. The main problem though is that Microsoft is so far behind the game, and Steve knows they need to focus on growing search share as their highest priority. Perhaps talking about any innovation they’ll be making in search would be construed as them getting ahead of themselves?

But I could hope couldn’t I? Hope to hear about them embracing key growth areas (eg location based search on mobile). Instead we were ‘treated’ to a discourse into regulation, anti-trust issues against Google and advertiser lock-ins before moving onto a few comments about the China situation. Sheesh! At least Steve rightly referred to them as ‘sideshows’. I thought we were here to learn about Microsoft’s insights into Search, not their response to agendas set by Google!

Towards the end of the chat, Danny finally gives Steve the gift question when he asks: What is the biggest opportunity in search?

The floor’s yours Steve. Please deliver. Please redeem yourself. Please give us hope.

Despair. Steve answers with a platitude: ‘The biggest opportunity is helping people get done what they need to get done’. Worse, he then outlines some of the problems he personally runs into when searching. Yes, Steve, but what are you doing about it? How are you solving this problem? Give us some substance. Details. Anything that would give us pause to consider moving to Bing. Anything but the stunning insight that you ‘see this as an opportunity’…

This, from the company that will be Google’s biggest competitor in search (as they will be once the Yahoo search deal completes later this year).

Back to that patent

And so we return to Google’s recently awarded patent. Should we be worried? Yes, we should.

When a company has:

1. The foresight this patent signals
2. 70%+ search market share and online advertising market dominance
3. Platitudes as the response from their nearest competitor

then we can be reasonably confident/scared they are only going to get stronger.

To this observer it seems that Microsoft is attempting to compete with the Google of 2005. And in the next five years they may even make some in-roads… At which stage they’ll be fighting a Google that is 10 years ahead of them.