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None of this will turn Google into a retailer in the traditional sense. But it will mean that Google will be providing connections in the marketplace -- exactly what eBay does now. "This will capture consumers, and they won't go to traditional shopping portals," Peck says.
Peck thinks Google will roll out programmable search by the end of this year, but he says you can already see the crude beginnings of it at the site. If you run the query "real estate” followed by a ZIP code, you’ll get the option of clicking on a button that will then show a list of homes available for sale from real-estate agents who paid a fee, with a map showing where the homes are. That’s a lot more than just a list of Realtors and their phone numbers. “It will get way more sophisticated,” says Peck. “We think this is the beginning of a transfiguration of the Web.”
Peck sees Google’s recent launch of “universal search,” which has a single search scan videos, images, news, maps, books and Web sites, as a step along the way to programmable search.
Programmable search makes use of a powerful advanced database and storage technology developed by Google called Bigtable, Arnold says. "The real story here is these guys invented a brand new kind of database, and if you are in the database business, you better get your act together," Arnold says. He explains other ways Google will use the technology in an upcoming book called "Google Version 2.0, The Calculating Predator."
For Arnold, Google's scheduling of its Checkout party during eBay Live was just another example of how the company likes to probe competitors to gauge how they will react to upcoming changes. "This is typical of Google's probing to determine the limits of another company's resolve," Arnold says. "There is a pattern where they allow a regional manager to go in, do some testing to get data and withdraw. So now they have a data point." Likewise, says Peck, eBay was responding with some probing of its own by canceling ads on Google to see how well it could do without them.
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A Google spokesman responded that it regularly files patents and that "prospective product announcements should not necessarily be inferred from our patent applications." Google also says it has worked closely with eBay for seven years and "looks forward to a continued partnership."
Will eBay pay?
So what does it mean for investors? It looks like Google is finding a way to sustain its impressive 65%-plus sales growth, a rate of growth that has lasted so long -- more than four years -- that many have questioned whether it can endure.While Peck still has a "buy" rating on eBay, I disagree with him. Though Google may never declare outright warfare on eBay -- and may indeed continue to work with it as a partner -- the coming change in search cannot be good for the premier online auction site.
Cantor Fitzgerald analyst Derek Brown, who has a "sell" rating on eBay and a $30 price target, thinks the Boston party dust-up was just a symptom of growing tensions between the two companies as everyone figures out they are in the same business. "It's important to realize what eBay is. Ebay is a venue through which sellers can advertising products and consumers can find and buy those products. In that context, Google's platform is really not all that different."
And it's about to get a lot better.
Expert picks
With this column, I'll add Google to the Company Focus tracking portfolio in our Expert Picks section, and we'll see how it does from here.At the time of publication, Michael Brush did not own or control shares of companies mentioned in this column.
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