Analysis: Google, from big to local

By T.K. MALOY, UPI Deputy Business Editor  |  March 18, 2004 at 6:43 PM
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WASHINGTON, March 18 (UPI) -- Do you know that pizza shop by Fourth and Main Street? Google says it will tell you.

It isn't enough that Google is a noun as well as a verb and that it holds the premier place among world Internet search engines. Now Google is going local with its new Google Local service, which gives relevant local information including neighborhood business listings, maps and directions.

Google, which has been contemplating a multi-billion dollar IPO, said Wednesday that it would be combining traditional business listings along with existing local information from its massive database index of 4.2 billion Web documents to create directories of local information for searchers -- all under the catchy name of Google Local.

The local Google is one a variety of Web directory-oriented information resources, including some which have come and gone such as Microsoft's, which in its day included everything from local events listings to restaurant reviews. Google does not plan to have any actual content, but does intend to tell you how to get there.

"Google's goal is to connect searchers with the information they need, whether it's half-way around the world or in their neighborhood," said Sergey Brin, Google co-founder. "Google Local combines a wide array of sources including Google's more than 4 billion Web page index to produce the deepest local search."

Debuting for action Wednesday, a user clicks the new Google Local hyperlink and then puts in their desired information -- lets say "pizza" for instance or "sushi" if you are more health conscious -- enters the relevant ZIP code, and the new Google Local delivers a listing of, in this case, local pizza or sushi joints.

A phone number and street address accompany each result. Click on a business name in the search results and through a partnership with Mapquest a new page pops up a map and directions.

Google spokesman Nathan Tyler said that users can search for anything -- not just products such as "pizza" -- that might have geographical relevance, "for instance you can search for Wi-Fi coffee houses located within a specific area."

According to Google, if needed, users can limit or expand their results to include listings within a one-mile, five-mile, 15-mile, or 45-mile radius of a specific location.

Sukhinder Singh, general manager for local search at Google, said the new search facility is the result of about six months of testing. Famous for it relevancy-ranking mathematical algorithms, Singh said that Google devised a whole new "relevancy algorithm" for the local search.

What's going on behind the scenes is that Google searches the entire collection of Web pages in its index to pinpoint geographic information that is relevant to a user's query. Google combines this information with comprehensive local business, map and service information drawn from a wide variety of U.S. databases such as the yellow pages and other sources.

Tyler and Singh said the new service had proved very popular during its first 24 hours of operation.

As of now, Google Local is limited to U.S-only information but plans on expanding internationally in the coming months, according to the company.

In addition to the new Google Local, the company recently began featuring flight tracking, UPS and Federal Express package tracking and ZIP code information.

Like a number of famous Internet search engines, Google had its start in a dorm room. It opted, however, not to take itself public earlier in life like some of the other noted engines such as Yahoo. Among other factors why Google hasn't yet gone public is the small matter of the tech recession of several years ago kicked off by the March 2000 dot com crash.

So Google has sat, privately held, but growing in popularity all the time and growing in worth. Now, however, with the crash perhaps sufficiently receded from memory, this bigwig member of the search engine club may take itself public at last.

Tyler declined to comment when asked about the possibility of an initial public offering.

According to media reports starting at the end of 2003, Google had begun courting investment bankers to handle the company's initial public offering. Reports have appeared in the Financial Times and elsewhere in the media.

In keeping with Google's online business model, the company is expected to run its IPO as a electronic auction, which would reduce the underwriting fees paid to any respective investment bank handling the IPO and make for a level playing field for any potential issue buyers, who could bid on shares directly. While such an online auction of shares would not be a first, this might be the largest.

Professor Nirmal Pal, who heads the eBusiness Research Center at Penn State's business school told United Press International she was optimistic about the prospects for the IPO.

"Will it fly? As we all know, next to e-mailing, searching the Web is the most prolific activity of the digital age. It is rumored that Microsoft tried to acquire Google but could not agree to a price point. They are reportedly developing their own search tools. Google has demonstrated a viable business and profit model, therefore I most definitely think their IPO will fly," Pal said.

Started five years ago by two enterprising Stanford students -- the same school which brought the world Yahoo -- Google quickly gained in the search ranks by virtue of its "page ranking" system, which often made for more successful and accurate searches. Founders and Ph.D. computer science candidates Sergey Brin and Larry Page formulated the page ranking algorithm while still in school, surmising that pages which were linked to more often (and therefore were more popular) were greater sources of information.

Danny Sullivan, the editor and publisher of the highly regarded Web site noted how Google quickly advanced over fellow search engines.

"Google was fortunate to come along with a better system of producing search results at a time when its competitors were getting lost in the morass of being portals. They forgot that quality search was something visitors wanted. It gave Google an opportunity, and searchers have since flocked to it," Sullivan told UPI.

"Today, now that its competitors have learned how much revenue search can produce, they've greatly improved. Google is still the market leader, but its competition is much closer."

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