Google’s Real Market – Small Business

Keen observation by Phil Sim on Squash – follow the money trail and you’ll see that Google’s real customers are the small business clients that are buying advertising, not the millions of users running searches. This puts them in direct competition with Microsoft who sees their fastest growing market in the SMBs.

People have questioned why Google needed to acquire Measure Map. To me, this is the obvious answer. Analytics will be at the heart of Google’s SMB offering. Let’s remember what Google’s core business is. It’s selling advertising. Who is it’s core customer base. SMB’s for whom contextual advertising finally represents a cost-effective marketing mechanism. How much penetration do you reckon Google has into this market. Bugger all. How can Google most effectively increase it’s core revenue. By getting more SMBs to do more contextual advertising. How can they do this? By helping SMBs to understand the effectiveness of electronic sales and marketing. How can they do this? By offering SMBs free CRM and marketing analytics.

If you follow that, then look for Microsoft to go shopping for an analytics package (it looks like they have a basic one already) to plug into their Office Live suite and look for Google to buy up a Netsuite or Salesforce.com to plug into their Ad Sense portal.