November 1, 2004

zClassifieds

Decentralization By: ams

Dan Gillmor wrote in the 10/31/2004 SJ Mercury News:

Google will have all kinds of company in this expanding world of advertising. That will include, I would expect, many of the more traditional media companies that will see a chance to expand their advertising base beyond the equivalent of the blockbuster (expensive) model that now prevails.

The competitors will also include big companies that have already shown an appreciation of Net-based economics. Microsoft, Yahoo, eBay and at least a few others will certainly be among them.

Google will also find competitors, small ones, out at the edges. And some of those will be new entrants that are figuring out ways to create targeted advertising without massively centralized infrastructures. The principles of peer-to-peer file-sharing will come to the ad marketplace, too.

Google is unquestionably positioning itself in a smart way. The critical mass it’s creating may even prove unbeatable, or turn into a new kind of monopoly that sucks up an astonishing portion of all advertising dollars into its corporate coffers. (That would be a dangerous dominance if it happened.)

Today, eBay, online classified-ad sites and traditional media are the marketplace of choice for the single-item seller. Ultimately, Google and others could even go after that market.

How many dollars (and euros, yen, pesos, renmimbi, etc.) will there turn out to be in the low-end advertising market? It’s a big, big number.

Google may not own it. But it’s going to get a share, a large one. I wouldn’t touch the company’s stock at today’s prices, but there’s plenty of room for growth in its primary revenue base. Nothing grows to the moon, as the saying goes, but there’s a fair amount of sky left.

A month ago we gave the name declassifieds to the concept of decentralizing ads. Now we give the name zClassifieds to an internal CommerceNet project to work on “targeted advertising without massively centralized infrastructures”. Will post more as we learn more.

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