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Google Tries Again to Win at Local

And it probably won't work -- again. Here's why


When it comes to targeted online marketing, Google (NASDAQ:GOOG) has built a money machine. But it has failed to find much success with the huge local marketplace, which is estimated at $20 billion. Still, Google hasn’t given up. According to a report in the The Wall Street Journal, the company plans to launch a variety of initiatives over the next couple months.

They’ll essentially involve a combination of internally developed products as well as technologies and content gained from acquisitions. But at the core will be Google’s G+ service, its alternative to Facebook (NASDAQ:FB). The pages will be the destinations for local businesses, where owners can provide customers with promotions and discounts.

Some of the products include things like Punchd, which is a loyalty program that’s based on smartphones. Another service, called TalkBin, allows customers to text a business.

To help get traction, Google plans to spend millions on marketing the services. A big part of the push will be workshops, which will help to acquaint small-business owners to G+.

On the surface, Google’s plan makes sense. But it’s still mostly about interesting technologies. So, for small-business owners, this will probably not be a good selling point.

If anything, success in the local market seems to be about having an extensive sales organization. This is the case with Groupon (NASDAQ:GRPN). While the company is controversial, it has proven that it knows how to get business owners to open their wallets — which is never easy.

So, if Google wants to be a success in the local market, it will need to go beyond its automated approach. In fact, it probably makes sense for it to try to make another attempt to purchase Groupon or even Yelp (NASDAQ:YELP). These companies understand the human touch, which is something Google isn’t likely to do on its own.  In other words, don’t expect its latest technologies to do much to help Google get a big piece of the local market opportunity.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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