As Google continues to plumb the depths of the online advertising market for new revenue sources, many industry experts believe e-commerce-related sites will be a major area of attack for the company.
Gartner analyst Richard Hunter said as much at his company’s Emerging Trends conference in April, noting that Google currently only sees roughly 1 percent of e-commerce traffic with its Checkout service. Hunter later clarified his point to eWEEK via e-mail.
“They don’t necessarily want more e-commerce traffic themselves; what they want is to know what the traffic is, i.e. what is being bought and sold,” Hunter said. By seeing that traffic, Google will better be able to target ads to consumers buying goods, and endear itself to the stores selling those goods.
With that logic, No. 1 e-commerce vendor Amazon.com would seem to be a slam dunk for Google, but Hunter noted that “it’s an expensive and demanding way to get it.” Indeed (exceptions YouTube and DoubleClick duly noted) buying a goliath such as Amazon.com does not mesh with Google’s track record of buying smaller Web services and building them out.
So, where could Google turn to capture one of these commerce-driven vehicles in one fell swoop? Many experts believe Rearden Commerce would be the most logical choice. Rearden Commerce, easily a service ahead of its time when it launched in February 2005, makes a Web-based personal assistant application.
Your Own Personal Concierge
To many chief financial officers tired of wrangling deals out of travel agents that will serve their corporate users, the Rearden PA (Personal Assistant) is a godsend. Need a hotel? Rearden will crawl the Web and find it for you. Want to catch that red-eye from San Francisco to New York to get home to your family after a grueling business trip? Let Rearden be thy guide.
Corporate users who travel or make other business-related transactions can log onto what is essentially their own concierge and book flights, rental cars and hotels themselves with almost 100 percent accuracy. Users can also satisfy their dining and entertainment needs by booking restaurants and procuring sports, concert or theater tickets.
CFOs love it because the platform has built-in alerts to let them know what employees are abusing their corporate accounts.
The kind of control PA provides is liberating at a time when most corporate travel is not a single, smooth process, with separate vendors for air, hotel, cars, events and parking, Beagle Research Denis Pombriant analyst told eWEEK.
“With [Rearden Personal Assistant] you have the beginnings of an uber process manager-something that takes responsibility for the handoffs-and when and if you have a problem, a place to go to for repairs,” Pombriant said. “So I think it’s important, especially because the direction I am seeing travel moving in is of greater Balkanization of services and less accountability.”
Rearden Use Cases and Statistics
Randy Davidson, travel manager for predictive analytics software maker SPSS, said he purchased the Personal Assistant last December for workers spread out in 25 offices worldwide. Within 30 days, 1,300 (94 percent) of the company’s employees eschewed the incumbent Orbitz service and began using Rearden.
“It’s quite reliable and far more up to the minute availability with hotels and cars,” he said. “I’m not getting anybody checking into a hotel and being told they don’t have a reservation.” As for price, he said the Rearden PA runs a few dollars less than Orbitz per transaction, but the accuracy percentage in booking air flights provides him with more savings.
It’s also the kind of Web-based service that Google drools over as it continues its march to cover everything on the Web. However, the companies don’t have any public relationship, and both Google and Rearden declined to discuss whether the companies have any business deals -partnerships, acquisition or otherwise-in the works.
Testimonials are great, but there are lots of great products that don’t make money. Let’s add up some numbers and see what we get.
Rearden CEO Patrick Grady told eWEEK that Rearden inked resale distribution relationships with American Express Business Travel and other travel-management companies in 2006. By year end, the company had 92 customers. Those resellers sold Rearden PA like gangbusters and the company finished with 1,293 customers through 2007.
Thousands of Customers and $2 Billion Target
Currently, Rearden boasts over 1,800 customers and expects to end the year at around 3,200, thanks in part to a new strategic relationship with Chase, where the company will soon offer its Personal Assistant to Chase’s millions of consumer credit cardholders.
The fact that Rearden is able to slide into the consumer sector so easily is a sign the company is prospering and investors have noticed.
The company May 6 banked $100 million in funding from JPMorgan Chase & Co., American Express and others, bringing its total funding to $200 million.
Considering that the average venture capital firm wants to get back 10 times its initial investment, Rearden’s target is a hefty $2 billion. The privately-held company declined to divulge a valuation.
Moreover, the company May 20 launched a mobile version of its PA, which will enable businesses and consumers to access their PA while on the go.
Google Buy Makes Sense, but so does Microsoft
Currently, the service only works with RIM BlackBerry devices, but expect support for Apple’s iPhone and phones based on Google’s Android operating system later this year.
Were Google to own Rearden, porting to those apps would be a lot easier not to mention the fact that Google has confidently targeted mobile search and apps as its next big online ad frontier.
Other work would have to be done for a better fit with Google. The PA currently syncs with Microsoft Exchange Server and Lotus Domino, but doesn’t yet work with Web-mail apps, such as Google’s Gmail and Yahoo Mail. Dan Ford, vice president of product marketing for Rearden, said the company is working on that, particularly as it extends further into the consumer sphere.
AMR Research analyst Bruce Richardson told eWEEK he wouldn’t be surprised if Google picked up Rearden. He said the search vendor could sell the service outright to companies; seal OEM deals similar to the ones the company has inked with AmEx and Chase; have companies pay to use the Rearden channel; and sell ads against it.
Google doesn’t usually sell services directly to businesses, but Google’s ad partners could pay to place ads on the Rearden PA platform, creating another ad revenue stream for the search giant. The OEM and channel deals could complement the new freshet of ad-based revenue.
“This would be a logical buy for Google and it would scare the living daylights out of everyone having to do with travel or entertainment,” Richardson said. “What would Microsoft pay to keep this away from Google?”
Rearden Momentum Makes it a Target
Grady insisted he isn’t interested in selling, not with all of the momentum Rearden has.
“We are maniacally focused on growing our ecosystem of users, partners, developers and merchants,” Grady said. “Unquestionably, certain of today’s largest Web properties would benefit from acquiring Rearden Commerce, but it’s simply not our focus.”
Fair enough, but as the saying in this business goes, never say never. Market conditions may compel Google to grab Rearden. Microsoft May 21 declared its intention to go for Google’s jugular with its Live Search Cashback blend of search and e-commerce and the predictive travel-related service, Live Search Farecast.
If Microsoft starts to gain any ground in its search, expect Google to grab an e-commerce play with some meat. My money is on Rearden, but Google better act lest Microsoft beat it to the punch.