Google Buys Channel Intelligence for 125 Million Dollars - What Does It Really Mean? - CPC Strategy

One of the downsides to being based on the west coast in sunny San Diego, California is that when deals get done at 9 am on the east coast, we tend to find out as we’re waking up, straining to open our eyes wide enough to see what’s on our mobile RSS reader. I guess that’s a fair trade off for living in paradise.

That said Google’s acquisition of Channel Intelligence makes sense for Google primarily because it fits very nicely in Google’s mission of organizing the world’s information and making it universally accessible and useful (and making a tidy profit doing it*).

From our perspective here’s what it all really means-

For Google
- Deep Integration into the ERPs/Inventory Platforms that power big retailers. Channel Intelligence’s where to buy technology allows big retailers to display whether or not a product is in-stock. While simple on the surface, it’s a nightmare to try to pull out inventory availability and pricing from legacy ERP platforms since they’ve been customized or built to spec for retailers. Channel Intelligence appears to have solved the problem for the likes of Best Buy and Target, so that knowledge is of value to Google, who would love to show that information along side online pricing on Google Shopping.

- A sales and integration team who understands retailers. As evidenced by the flops of a number of consumer products (Google Buzz, Google Wave, Google Video Player, Dodgeball, among others) Google is pretty good at building or buying technology platforms  but terrible at communicating their actual value to end users (save Android). This is no different for enterprise plays (Google App Engine anyone?). By acquiring Channel Intelligence, Google gains a salesforce/integration team versed in effectively communicating with major retailers and deploying technology solutions. We see Channel Intelligence’s sales and integration teams eventually joining  Google’s Global Accounts Global Agency and/or large client sales teams at Google, giving them some much needed eCommerce domain expertise in-house.

For Amazon/eBay
- Google is serious about commerce. No, not just eCommerce but commerce in general. They want to insert themselves between the consumer and the retailer. The first shot was Google transitioning shopping into a paid experience so they could surface more product listing ads on general search result pages. This is the next shot, putting the infrastructure in place to start surfacing local availability, something both of these companies are terrible at (sorry Milo!).

For Large Brick and Mortar and eCommerce Companies
- Google wants your pricing and inventory information and in exchange for providing it Google will send qualified traffic to your eCommerce AND your physical stores. The question is: Are big retailers ok with playing this game today knowing that tomorrow that same traffic might cost more. Amazon has decided not to play by Google’s rules and has opted out of product listing ads, the question is will other retailers follow.

For Small to Medium Sized eCommerce Companies
- No real changes but this validates the fact that paid Google Shopping is here to stay. If you have a brick and mortar store look to Google to start asking for pricing information soon but don’t expect a ton of support from them to get it out of your ERP.

For Consumers
- We’re inching closer and closer to an accurate unified online/offline shopping experience. In the not so distant future consumers will be able to use one search box or bar code scanner to see whether it makes sense to buy that Blu-Ray Player from Best Buy 5 miles away or to wait two days for NewEgg to ship it them directly. We’re sort of there already Google’s Shopping’s Nearby Stores but let’s be honest… no one really wants to call for pricing and availability.

I’d love to hear what others think about this acquisition, feel to post your thoughts or reach out to me directly at nii [at] cpcstrategy.com.

* We might have appended this part to the mission statement ourselves.

About the AuthorNii is COO of CPC Strategy, a shopping feed management agency and is responsible for day-to-day business operations and long-term financial, tactical and strategic planning for the company. He has been with CPC Strategy since January of 2007. Prior to working with CPC Strategy, Nii was a product manager at eBay working on algorithmic merchandising and reviews and guides. See all posts by this author here.