Google eyes business market

SIMON AVERY

Globe and Mail Update

It already organizes the information on the Web for more people than any other search engine. Now Google Inc. is stepping up its efforts to be the access point of all information inside major businesses and organizations.

The company is pouring money into a product called Google Search Appliance, adding sales staff and forming partnerships with information technology consulting firms for the first time.

Google is trying to boost sales of a new version of a search engine it introduced several months ago that scours all kinds of information within an organization and presents it in a simple-to-understand manner.

The Internet giant thinks there could be just as much money to be made by licensing its search technology to corporations and governments as it is reaping today from on-line advertising.

High-profile deals like the company's $1.65-billion (U.S.) bid for YouTube Inc. this week show that it believes there remains plenty of new opportunity for advertising on the Web. But Google is trying to develop into much more than one of the Internet's best-known consumer brands.

“The size of the Internet advertising market today is approximately $15-billion,” said Scott Goodhew, Google's enterprise sales manager for Canada. “We don't see any reason why the market [for corporate search] can't grow to a market space that would rival Internet advertising.”

While Mr. Goodhew wouldn't put a time frame on that growth, his forecast suggests Google has its sights fixed on a huge, untapped market. In the first six months of this year, 99 per cent of Google's $4.71-billion of sales came from advertising.

The company, based in Mountain View, Calif., announced its first re-seller partnership in Canada on Tuesday. Compugen Inc., an IT consultancy that integrates computer systems for companies, will begin offering its clients Google's search technology. The partnership follows several formed recently with IT specialists in the U.S.

Working with established vendors lends credibility to an enterprise best known as a consumer company that gives away its technology in return for ad revenue. The trust is especially important because Google's business software must meet security and privacy standards that Google.com doesn't face.

“It's a new tool, and it will become a big product in the next year,” said Harry Zarek, founder and chief executive officer of Compugen.

Search tools for businesses have been around for years, but the market is emerging rapidly with demand particularly strong in the legal, manufacturing and finance industries, he said.

Unlike previous generations of the technology that answered queries with lists of information, Google's technology provides one unified link to documents and real-time business data. That means, for example, that an employee could type in a customer's name and get the latest sales order stored in a business intelligence program from Cognos Inc., as well as a direct link to the customer's contact information housed in Microsoft Corp.'s e-mail exchange server.

“The idea that two keywords and a search box can open windows to not just documents and Web pages but also business intelligence, data warehouses, business forms, applications, and otherwise, is very compelling,” said Matt Brown, an analyst with Forrester Research.

Google faces competition from other established enterprise search companies that include Autonomy Inc., Fast Search & Transfer ASA, and Endeca Technologies Inc. But the most formidable may prove to be Microsoft Corp., which has included a corporate search tool in Office 2007, a set of business programs it is preparing to launch by the end of the year.

Mark Relph, vice-president of the developer and platform group for Microsoft Canada Co., said the two companies approach the process of search differently. Google offers a boxed appliance search engine, where Microsoft sells an entire platform.

“A crawly appliance can muscle its way through any pile of data. But a platform can be extended to interpret that data in very intelligent ways,” Mr. Relph said.

Specifically, third parties can develop new software that runs on the Microsoft platform and customizes searches, whereas an appliance is built for a single purpose, he said. “We really believe that a platform brings much higher value to a customer of any size.”