Google's Retail Change, From Free To Paid, Is Rightfully Scaring A Lot Of Merchants

Given Google's strong dominance in the search world, coupled with the huge amount of E-tail business that comes in via Web searches, it's understandable that whenever Google tinkers with anything that might possibly or perhaps could impact that traffic, retailers get nervous.

Well, Google is preparing some major changes to a relatively small merchant area of its site. The fear is that, despite whatever assurances Google offers, the Domino Effect of this decision will impact Google's main search listings. And where Google goes, Bing and Yahoo are sure to follow.

What Google has done is said that it is changing the name of Google Product Search (which used to be Froogle and a few other names) to Google Shopping. The name change make clear that this part of Google's empire hasn't exactly caught fire with consumers. But the real impact is changing it from a free model to a paid model.

"We are starting to transition Google Product Search in the U.S. to a purely commercial model built on Product Listing Ads. We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date," said Sameer Samat, Vice President of Product Management, Google Shopping. "Higher quality data—whether it's accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants."

The big-picture question is whether this move will impact the main Google search results. If someone searches for refrigerator or lawn-mower or sofa, will the paid listings from Google Shopping (which have always been included in the main Google search) push down much larger retailers that didn't happen to pay for a Google Shopping listing?

SearchEngineLand Editor-in-Chief Danny Sullivan made an excellent point when he dug into Google's 2004 IPO and reminded us of what Google had to say about paid search, specifically involving merchant listings: "Because we do not charge merchants for inclusion in Froogle, our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased."

Fully agree, Mr. Google From 2004.

Michael Saracino, Eddie Bauer's Digital Marketing Director, said his people have yet to start serious discussions with Google, so it's hard to know where the chain will end up. "We'll have to evaluate our approach to how we continue to use that program and what the level of optimization should be, on a paid basis. It has to be evaluated against other paid programs now," he said. "Google product search shows up in both places, and it's more important to be in the main search. We're going to want to show up for those results. For us, it may be that if the ROI is there, it may be necessary to continue to run. Or it may be something that we don't want to do."

Predicting what Google will ultimately do is almost impossible.Predicting what Google will ultimately do is almost impossible. Yes, it did freely incorporate product listings with its core search function. But that was when both were free, which meant that just about every retailer was involved. When Google changes everything and makes Google Shopping a paid service, will it then stop letting those results impact the main search listings, as Eddie Bauer will seek? And if all retailers insist on that in exchange for paying, will that result in the exact type of credibility taint that Google warned of in its IPO?

Top Google watchers agree the free search listings might indeed end up being impacted, but there's no way to know for certain. And while Google is trying to sell listings, it has good reasons to be deliberately vague and ambiguous. Google wants retailers to fear that if they don't pay up, they'll get frozen out (well, buried under hundreds of listings is more accurate) from the main search engine.

"Will merchants end up with product listings in the Web search or core results from Google's regular crawling of the Web, which will continue for free? Perhaps. But I think any merchant who is relying on this had better make some new assumptions," Sullivan said. "I hardly think that Google's going to roll out a new Google Shopping box, complete with paid inclusion feeds, only to decide that it's more relevant to also have a lot of product listings appearing from merchants in the Web results, as well. I think it will find a way to ensure that its Web results are reflecting something other than a lot of shopping listings, so as not to be duplicative of the shopping box. Bottom line: Merchants who are getting a lot of free traffic from Google should prepare for the worst and hope for the best. Google has never, ever made this type of major shift to take an entire search engine that had free listings and make them all paid. All bets and assumptions are off."

Andrew Davis, director of marketing for CPCstrategy, another group that watches Google very closely, expressed similar concerns.

"Product feed impacts Google Shopping; organic results are determined by Google spiders. Even though Google Shopping is small compared to Google organic, Google Shopping was one of the last and largest free traffic portals on the Net and is one of the largest sources of traffic and revenue for a lot of merchants, mostly in the small to midsize range. So the change to a paid engine definitely has huge ramifications for all online retailers, big or small. Does using Adwords give you a better bet at increasing your organic SEO rankings? The answer from Google will always be no. And I think it's highly probably that they're telling the truth, though no one can be sure. I know a ton of people who think that using Google's paid services gives them an edge organically."

The SEO retail environment is about to get a lot more interesting—and frightening.