This is the third installment of our Deep Dive in Local series. Each week Mary Bowling, David Mihm and Mike Blumenthal share their thoughts about the previous week in local. The complete video is posted in the Local U forums. In the second half of that weekly video (paywall), they take a deeper strategic and tactical dive into one interesting area that caught their attention during the week. These segments will typically be about seven minutes in length and be posted one to two weeks after their posting in the forum.
In this episode, recorded September 5th, David, Mike & Mary examine the intersection of personal speech driven personal assistants, mobile apps, search and location. How will these trends impact search as we know it? And what will Google do in its effort to maintain dominance?
Mike: The topic for the deep dive this week is the intersection of location, mobile apps, the trend towards mobile and Google's potentially large looming competitive threats moving forward. Why don't you kick that off, David?
David: Sure. Well I'll actually start...it's certainly related to that, but it'll actually start with the personal assistant discussion. So I see that there are now -- assuming that Facebook's...I haven't seen their beta, but assuming it's a compelling product -- five compelling personal assistant products. You have Google Now. You have Siri in combination with Spotlight. You have Cortana from Microsoft. You have Alexa from Amazon, which is powering the Amazon Echo. And now you'll have Facebook with its M products.
So, to me, I think that this really...this is a pretty clear signal that most of the smart minds, smart companies in technology are seeing that the interface for search is no longer going to be a box that we type something into. It's going to be a message or a verbal command through which the results come back are always in the context of where we are, what the last search was that we just did, what our friends are talking about in the case of Facebook. I think of this...we now start to see the importance of the conversational search piece of Hummingbird that came out a couple of years ago.
And I think that this really is a major threat from Google ... or to Google. If they are able to be boxed out not only by these personal assistants, but also by the apps that these personal assistants connect to, especially in the case of Apple obviously, this could very quickly be a path towards irrelevance for Google. And I think that's a little bit over the top. I'm not saying they're going to become irrelevant, but it certainly is, I think, the most real threat that Google's had in a decade.
Mike: Along those lines, Apple's TV, which is supposedly coming out September 9th has more processing power than a PlayStation, PlayStation 3 probably. When that A6 chip is unbounded by battery constraints and plugged into the wall, they can really make it do some interesting things. So you've got a machine that's significantly more capable of processing speech than your iPhone because it has so much processor power to throw at it. So there's that. Those (Facebook, Apple, Google, Amazon & Microsoft) also the five that really seem to me -- you might want to count Samsung. Maybe they'll compete. Maybe they won't. But those are the five that really we're really looking at that, ultimately, are going to be in much more direct competition over the next 10 years, right? Those are the five major players where a lot of the interesting stuff's going to be happening. They're going to be sucking up a lot of the smaller guys too, right?
David: Well, I think that their routes to partnership...well, certainly in Apple's case and I think Microsoft's probably, too, their routes to partnership may be much...let's see.... There may be fewer competitive risks to partnering with those companies for app makers than to Google. For instance, it was really another piece of news but, sorry to bring it up, but the Hilton just announced a partnership with Uber this week that they're now going to surface recommendations provided by Uber for hot spots in the neighborhood when you check into your Hotel. That's the kind of thing that I think companies are hesitant to give Google that information. Uber and Google have a partnership and Uber's not even doing this with Google as far as I know. It hasn't been announced. I think those are the kinds of things that there are going to be plenty of other data points beyond a type search into Google these companies can leverage to actually provide better results than Google can potentially in the future.
Mike: So Uber as the new Foursquare?
David: Right. Exactly.
Mike: That's interesting.
David: Based on real data from a mass population instead of...half a million people all in the same demographic.
Mike: "Don't go to this bar because all the drivers report the people leaving it are puking in their cars." Is that what we're talking about here?
Mike: How do you see this tie into the Google Here announcement [of cancellation] that you spoke about in the news?
David: Sure. So basically, I think maybe one of Google's primary advantages that it has is that the Maps app is basically ubiquitous, right? I think that the...this is the more interesting...well, obviously I thought the program was a little bit creepy, but we've certainly seen the potential given the technology that Google has. But the fact that the notifications were coming through to the Maps app I think is critical because this is something that, even on iOS devices, almost everyone has installed. And I think that this is a back door into remaining a relevant company on iOS devices or would have been. Because the Chrome browser is...I don't think it has anywhere close the same market share as the Maps app. Obviously I just said I think we're going to see a trend away from in-browser searches. We're already seeing 90% of time on mobile devices is spent in apps versus 10% in browser. So I thought that Google is recognizing that the browser is going away or diminishing in importance on mobile devices, and that their beach head against all this is actually the Maps app and not necessarily things that you're doing in Chrome.
Mike: Yeah, and I think Google discontinued Here probably because of concerns about privacy, although that always seems to me very disingenuous obviously. They only discontinue privacy products that rise to the level of so creepy that everybody brings them up. Clearly, they're all about learning everything there is to learn about you. Look at Google Photos for example. They don't list people's names, but I am convinced they know what those people's names are that they're doing facial recognition on. How creepy is that, right?
David: Absolutely. Yes.
Mike: So Here, though, was only going to be introduced...I think it was actually a test with Starbucks and Target and a few other major retailers. And nobody knew about it until it got discontinued actually. Had you heard of it prior to the discontinuation?
David: No, not at all.
Mike: So do you see the other...what about the interstitials? Do you see Google's effort there as mainly a way of limiting app competition short haul so they...
David: Short haul.
Mike: ...can get more footage in the app world like with this new app they just brought out, the Street View app for example?
David: Sure. I guess I would say they're trying to buy time for develop...on the one one hand, they're trying to buy time for Google Now on Tap to catch hold with enough app makers that they have connections into all these apps so it doesn't matter anymore. And then, on the other hand, they're penalizing these same companies for pushing people into their apps. So I'm not sure. It seems like they want it both ways, but I think the goal is really buy time until everyone is opting in to this Now on Tap program so that they can still access all this same data that, as I said, I think Apple and Facebook and some of these other companies are going to have.
Mike: Yes, as we see with Uber, there's a strong resistance on the part of some of these companies to cooperate with them for real reasons so it could be an existential threat. At least they're...even if it isn't, Google's going to treat it as such as they do with almost any threat, right? And they're gonna pull out all the stops.
Well, with that, I think this is a wrap. I think we all have another call to be on so thank you very much, and we'll see you next week.
David: Sounds good. Thanks. guys.
Mike: Bye bye.