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Google Secrets

Google doesn't broadcast its strategic plans. Here are eight critical areas where its decisions will shape the industry.

When Microsoft or Oracle barrel into a market, they serve up a grand strategy and a product road map to get you there. With Google, you might get a beta product that shows up on the Web, sometimes one that's less advanced than similar offerings in the market, and often with a narrowly defined goal, even if the potential for grand expansion seems obvious. CEO Eric Schmidt has said the company doesn't have a sweeping strategic vision, that "we delight in not having such strategy." Not no strategy, but one to innovate in many interesting areas and not to build just one thing.

What follows aren't the kind of secrets we dug through Google's trash to get. Google even talked a little about many of them. These are unknowns in the sense that the typically reticent Google hasn't told the world just how it intends to move down these roads. Here are some insights.

How big in the offline world?

Google is getting into something new all the time: Google Earth, a partnership with NASA, Google Pack software, voice over IP, scanning the world's books. But when it comes to revenue, the company's business can be understood on three lines: 56% from online ads running on its sites, 43% from other Web sites and magazines where Google places ads for a share of the revenue, and 1% other. Its dependence on online ads is one of the reasons Google paid $1 billion for 5% of America Online--to protect the ad revenue that partner AOL generates for Google and keep that from going to Microsoft.

Understandably, the company wants to diversify, and this month's acquisition of dMarc Broadcasting shows one way it intends to do so: by placing ads in conventional broadcast and print media. DMarc does business the way Google likes it--using software that helps automate the buying and placing of radio ads. Google plans to integrate that with its AdWords platform for placing Internet ads. How much does it like this business? It paid $102 million in cash, but the price tag could rise to $1.1 billion if the business hits all its targets the next three years. That's a lot of upside.

Google also is experimenting with print, placing ads for customers through a limited trial in PC Magazine, Maximum PC, Budget Living, and the Chicago Sun-Times. One advantage from such partnerships may be to access partners' local ad sales forces.

Google is now focused on the Internet, radio, and print media, says Patrick Keane, head of advertising sales strategy. But his description of the company's vision--delivering "accountability, efficiency, relevance, and scale to advertisers"--isn't so limited. With Google's recent decision to start selling video content such as CBS TV programs and pro basketball games, it's all but certain the company will move into enabling video advertising as well.

What about further afield, like telemarketing and direct mail? If Google goes there, it would have to do so more cautiously. The company's instant-messaging and Internet telephony application, Google Talk, is free and ad-free, but it's doubtful both of these conditions will continue indefinitely. Telemarketing over IP may not sound appealing, but marketers have yet to meet a medium they won't try.

The caveat here is that brokering the world's information presents as many pitfalls as opportunities. Given the wealth of information that Google collects about its users, figuring out what not to sell will be one of Google's most vexing challenges. --Thomas Claburn

If not a PC, then what?

Google co-founder Larry Page's speech at the Consumer Electronics Show in Las Vegas this month couldn't help but be a letdown. Page made significant announcements, detailing Google's plans to sell video online and distribute a consumer software bundle called Google Pack. But with the rumor mill speculating about a "Google PC" that would be sold in partnership with Wal-Mart (which Google denied all along), nothing short of a major hardware unveiling was going to be enough.

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