November 5th, 2005
Wal-Mart's fear of the Googleplex
The New York Times has a story by Steve Lohr about how upstart Google is disrupting many traditional business sectors. As an example, Wal-Mart views Google as a threat. Lohr quotes Jim Breyer, a venture capitalist from Accel Partners who sits on Wal-Mart’s board, who says that Google could threaten the retailer’s business by telling shoppers where better bargains can be had in proximity to Wal-Mart stores. It’s good news for buyers, who will have information at their fingertips to make more informed decisions.
It will also force Wal-Mart, and Walmart.com, to figure out how to keep customers happy beyond low prices and product selection. Wal-Mart might have the leanest and smartest (RFID) supply chain in the works for gaining efficiencies, but Google is building a scalable, massively parallelized, distributed infrastructure for serving billions of users and delivering increasingly targeted content and services on any device. Do you go to Wal-Mart or Google (Yahoo, MSN, etc.) first and last in the product purchase cycle?
Google is already impacting advertising, stirring up a hornet’s nest over book search and enabling all kinds of mashups and new services that could disrupt everything from real estate sales and Craig’s List to television and communications.
To be fair, Google is simply has the most buzz and momentum today, and a growing power base and employee count. Yahoo and Microsoft, in particular, are other powerhouses striking fear in the business plans of mature and emergent businesses that could be disrupted by the continued evolution of the Internet and digital lifestyles.
As the Web giants gather more content, harvest and harness more data about individual and group user behavior and preferences and improve the scope and quality of search, commerce will become more about "pull" than "push" in the words management consultant of John Hagel:
Over the past century, institutions have been perfecting highly efficient approaches to mobilizing resources. These approaches may vary in their details, but they share a common foundation. They are all designed to “push” resources in advance to areas of highest anticipated need.
In the past decade, we have seen early signs of a new model for mobilizing resources. Rather than “push”, this new approach focuses on “pull” – creating platforms that help people to reach out, find and access appropriate resources when the need arises.
The pull world makes you think the the network has ambient intelligence and values your time and attention. That’s tough for any single retailer to do…
Dan Farber, editor-in-chief of CNET News.com, has more than 20 years of experience as an editor and journalist covering technology. See his full profile and disclosure of his industry affiliations.
| 11/07/05
