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Monday, November 7

Why Wal-Mart is Afraid of Google

It is no secret that suppliers and competitors have good reason to be wary of Wal-Mart - but there appears to be a company that in turn strikes fear into the hearts of Wal-Mart management ... Google.

Google's dominant position in Internet search and its aggressive focus on technological innovation mean that a wide range of traditional industries might start to feel the heat as Google's disruptive innovation changes the competitive landscape in industries far removed from Internet search. Such industries include retailing, real-estate, telecommunications and automobile dealerships. In addition, the advertising and newspaper publishing industries are already feeling the heat.

Why retailing? Well, image a cell phone equipped for mobile searching that combines local store listings with product pricing information. Instead of physically shopping around for the best deal, a simple search could tell you if the product you want to buy is available cheaper in any other store within a ten mile radius. No retailer, including Wal-Mart, would be happy about that kind of transparency.

Why real-estate? Picture Google Earth's 3D satellite images overlaid with real-estate listings for every single home that is for sale in the area you are interested in. Instead of talking to various real-estate agents and going for time-consuming drives, you could easily zoom in on the houses that match your wishes while you sit in front of a computer.

Why telecommunications? Google has been buying fibre-optics networks and has submitted a proposal to provide free wireless access in San Francisco, stating that access to the Internet is as important to searching as searching information itself is.

Why automobile dealerships? Large automobile firms are starting to spend significant money on search advertising and attract visitors to corporate websites. There, visitors can find extensive information about the various car models and have the ability to get approximate prices on a car with exactly the features they are looking for. This type of functionality significantly reduces the value that car dealerships can provide to prospective customers - so what will their value-add role be in the future?

These are only some examples - Google is also rumored to be developing its own payment system, offers a free email service, blogging, photo storage and sharing, and much more, which all could be a threat to other industries. The impulses that Google is currently providing may fundamentally change how business is done in a wide range of industries, and this may be happen sooner than many expect.

1 Comments

At 4:33 PM, Anonymous said...: Why real-estate? Picture Google Earth's 3D satellite images overlaid with real-estate listings for every single home that is for sale in the area you are interested in. Instead of talking to various real-estate agents and going for time-consuming drives, you could easily zoom in on the houses that match your wishes while you sit in front of a computer.

When I bought my house a few years ago I did this manually, searching for listings and looking at aerial and sattelite photos on the web.