"In sight it must be right." That's the official mantra of burger chain Steak n Shake, but it's just as apt for any other business that makes money from the trust of its customers. That's why Google (Nasdaq: GOOG ) is moving its personalized search results out of the mysterious black box they have occupied for years -- and into public view.
No more black boxes
Google adjusts its search results all the time based on previous searches, preference settings, and so on. If you search while logged in to your Google account, the data mining goes far back into your history. That's why I can search for "weather," and a local TV station's weather site shows up on the first page of results. "Personalized Results 1-20 of about 546,000,000 for weather [definition]. (0.09 seconds)" is the little banner at the top of my results.
But now, the company is rolling out more insight into the wherefores and how-tos of those personalized results. You might search for pizza, and get a notification that your results were "customized for the Chicago metro area," for example. Click on the included link and get a breakdown of the reasons that led Google to Chicago for this search. Recent searches factor in, so a sudden interest in Wrigley Field or the Sears Tower could be a hint. An IP address (think Internet zip code) in the Chicago area would be another useful sign. (You lucky dog you, in that case, if you're really looking for pizza.)
Comfort is money
I've seen a lot of privacy complaints about Google's use of your personal search history and browsing habits. Now the detractors can check out what the information is being used for, and then decide if they want to drop that Gmail account, iGoogle page, or whatever other login hooks they have into the Googlish computing fabric.
It's important to Google that people feel comfortable using their search interface, of course, but nearly as imperative to get them to sign in somewhere. Forget about giving you more useful search results for a minute. The more information Google can collect about you, the better it can pinpoint its advertising messages to you, which makes for happy advertisers who enjoy a good return on their investment. And the money machine grinds on. That's the immediate payoff.
On a longer time scale, Google accounts become even more important, and it's easy to see why the Big G keeps throwing out more ways for you to sign up, sign on, and feed the ravenous data-crunching beast. Online advertising is a puny, tiny market next to the massive amounts spent on billboards, TV ads, radio spots, and so on. You may not see the connection today, but just you wait a while.
In five years, interactive television should be all the rage through 'net-connected TVs, Blu-Ray players, and other media center components. Google already sells a little bit of TV advertising on the same auction-based principles as its AdSense/AdWords online ad networks. Get a little login action going there, and the local pizza joint will pop up on your living room screen more often. It's pretty sweet to think that Microsoft (Nasdaq: MSFT ) could end up feeding revenue to Google through its Xbox 360 media hub.
Why not, guys?
I'm frankly flabbergasted to see that Mr. Softy and Yahoo! (Nasdaq: YHOO ) aren't doing more to get us logged in and milked for all the information we're worth. Conversely, old-school advertising specialists like Lamar (Nasdaq: LAMR ) , Interpublic (NYSE: IPG ) , and Omnicom (NYSE: OMC ) should feel Google breathing down their necks, whatever their specialty market may be, and try to establish some kind of personal connection to their target audience. The traditional method of not-very-targeted message broadcasts is going out of style fast, overtaken by Google's point-to-point personalized connections.
That's why we get to see what's inside the black box now. And that's why Google will not always live and die by online advertising alone. It's so much bigger than that. Don't miss out on this ride.