As confirmed by TechCrunch, Google today announced that they’ve bough Aardvark for $50 million – brilliant move by the Goog. I’ll get to the why after a little background.

Google still dominates the most lucrative percentage of marketing dollars spent on the web:

But recently they seem scared. Google is a one trick pony, with the Adwords serving as their main source of revenue. They’ve tried over and over to replicat it’s success but have failed miserably with Youtube, Dodgeball, Jaiku, Lively, Orkut and Wave. I visited Google’s New York offices in Jan 2007. The most memorable moment (besides the organic salmon burgers in the cafeteria) was when one of the engineers said that Google was the only site in the world, whose goal was to minimize time spent on it. At the time I was blown away – “Give the people what they want.”

Fast forward to today – for most searches related to products, services or experiential recommendations – Google fails:

googfail

People no longer trust the anonymous, SEO optimized, affiliate marketing driven, possibly automated, blog post. The next web is built on relationship driven, public, recommendations. Google’s biggest threat is not another search engine, but a change to the underlying way that people search. Enter Facebook and Twitter. I no longer search for news, it finds me (goodbye RSS).  It’s no surprise Google has made numerous plays at Twitter and FB has changed it’s whole strategy because of Twitter. They are all fighting for the same role, to be the underlying real-time, social operating system on the web.

Eyeballs and CPM ads are finally being replaced by microtransactions and quantified actions. Subscriptions are the new black. G used to be the gateway to the web.  Now, more sites are reporting an increasing trend of quality traffic from Twitter and FB.  The top brass at Google knows that social is critical.

Purchasing Aardvark is a brilliant (third or fourth) play into the social arena. With Buzz just released, Google now has a captive audience of 176mil (in Gmail) to test, position and improve social search (before it’s too late).  People don’t want to be sold to, but will gladly buy products based on recommendations by people they trust.  The line between advertising and content is blurring.  The key is being able to monitize recommendations (companies would gladly pay 2% of a product’s price for a sale).

What will be interesting to see is if either Facebook, Twitter or Google is able to do it alone (doubtful – but maybe FB), whether some big-time M&A will happen (Goog buys Twitter), or whether they will be forced to open up to each other, each find their respective niches, and continue to compete on the fringe (likely).   What do you think, with Buzz + Aardvark will they be able to achieve monetizable, real-time, social search before FB and Twitter?

Related posts:

  1. Google's Biggest Competitor isn't another Search Engine
  2. The Case For and Against Google's Rumoured Twitter Acquisition
  3. The Transition to Real-Time, Social Search
  4. Why Would Anyone Advertise Online Without Google/Facebook?
  5. Slides from Social Media Training Sessions