Google is valued at $232 billion today — its stock is priced at over $700 a share. When it went public, it was in the $80 a share range. At [the initial public offering], it was considered over-valued. Do you remember that noise generated around the Google IPO? I do. Google has more than 1 billion users around the world now.
It executed well — it had a killer app. It built trust with consumers and just added slowly and methodically functionality and technology on a global basis and now it is like oxygen for the industry and for consumers. And the nay-sayers around Google … they lost out in every way — reputation-wise and economically. No one can even remember those days and those critics any longer.
I see a lot of similarity here in the next big opportunity of the intersection of where local meets social, mobile and e-commerce. Experts sometimes lose the forest from the trees.
Today, so-called experts sneer at this market as a “deal of the day” business, based on push permission-based marketing via e-mail. This business has probably reached $10 billion in overall billing worldwide faster than any other industry by many, many key players. One player has emerged as an overall leader with scale. The overall audience is in the hundreds and hundreds of millions of consumers on a worldwide basis in less than five years. But it is early as there are more than 2 billion people connected to the Internet. It is early days for local, mobile and social shopping.
But soon you will see the leaders getting into pull marketing, where deals are banked and offered as a Web service — not on a daily basis but on an ongoing basis. He or she who has the most deals banked will be advantaged, I believe. And deals will be offered in real time as merchants wish to be smart and deplete inventory on an as-needed basis. And personalization will be more and more refined for consumer benefit. Utility will be offered for consumers who buy things on an ongoing basis and want convenience and best prices with regularity and schedule, and rewards will be offered for ongoing purchases.
We will see group-buying power to benefit organizations and a real industry verticalization, which we are seeing already in travel and ticketing and more and more niche categories. Physical goods and products will be sold at a discount in an aggressive way. Digital goods will be next. Self provisioning capabilities will be offered so merchants can program the deals themselves.
We will see more and more technology provided for free to merchants to help them manage their stores in the real world and online. We will see a redefinition of who a seller is, from a merchant to a consumer who is doing commerce on the Web. We will see a morphing and blending of local commerce to be both [business to consumer] and [business to business]. This is huge — when business-to-business enters the picture. And don’t forget the government as it is modernizing and starting to buy online. Auctions and marketplaces will be added to this mix.
Scale will win out. Platforms will win out. Customer file size will win out. Having people who are best at where liberal arts and technology intersect will win out. First mover advantage will be rewarded. And what was once looked at as a tiny direct marketing coupon-like business and industry will be seen as a next-generation biggest new industry ever created — where social, mobile, local and e-commerce intersect.
A big agenda here. There will be some huge new winners. The industry is just getting started. Those who forget the past are doomed to repeat it.
This post first appeared last month on the “Revolutionary Views” blog for Revolution, an investment and venture shop co-founded by Leonsis.