Yesterday, Google released Lively, a browser based virtual world somewhat reminiscent of The Palace from the mid-90s. A lot of people have been wondering why Google would be interested in entering this market, but according to Hitwise, it seems Google is looking at all the major categories its search engine is sending traffic to and then tries to develop a product for that category.
Hitwise has a very good track record in using its Clickstream data for predicting Google’s next moves. In January, they predicted Google would enter the health, travel, or virtual world market. Since then, Google launched Google Health and Lively, though it doesn’t have a major travel product besides Google Maps in its portfolio just yet.
Looking at the latest data, Hitwise predicts that Google would either enter the automotive or music market next. Both of these are very broad categories with a large range of competitors already operating in them, but then, that has never stopped Google from entering a new market.
Google Autos
Google could easily build a competitor to cars.com, Vehix, or Autotrader by tying together data from its Google Base product (which already has a ‘Vehicles‘ category) and mashing it up into a more comprehensive used car market by also allowing users (or dealers) to easily put up their own cars for sale. As of now, Google is only aggregating data from all the major online car buying sites.
Google Music
Rumors about Google Music have flared up regularly over the last few years, but so far, no actual product has materialized. Entering the music business is obviously fraught with problems for any new player. Given the issues around licensing music, as well as its failure in selling videos on Google Videos, Google might not want to develop a mainstream music platform.
What Google could do, though, would be to offer a platform for independent musicians, somewhat akin to what MySpace was in its early days or what AmieStreet does today.
Google Travel
Given Google’s background in search, we think Google might also be likely to develop a competitor to the large travel aggregator sites like Kayak or FareCompare. Not only is this a market where Google could develop a decent revenue stream outside of its core advertising market, but it would fit in right with Google’s core expertise. As of now, Google only links to Kayak, Expedia, Hotwire and others when you enter the right query into its search engine, but it doesn’t display any actual results itself yet.
Our Prediction: Travel is Next
If Google is indeed trying to fill out all of these major niches with a product of its own, we think a travel product is still Google’s most likely next move. It is not only the closest to Google’s core competency of search, but Google could also easily put ads on there as well.
