Walmart dominates the retail space. It is far and away the world’s largest retailer and nobody else is in the same galaxy. They do around a quarter trillion (yes, trillion!) dollars per year. It’s absolutely mind-boggling. As I was reading an article about Walmart and how they completely dominate their space and deal with their suppliers, I couldn’t help but notice similarities with how Google controls the search space and works with webmasters. I have taken segments directly from the article (http://www.fastcompany.com/magazine/77/walmart.html) and replaced Walmart with Google and related it to search instead of instead of retail. My version is in italics. You’d be surprised at how little editing was necessary.
“Wal-Mart is more powerful than any retailer has ever been. It is, in fact, so big and so furtively powerful as to have become an entirely different order of corporate being.”
Google is more powerful than any search engine has ever been. It is, in fact, so big and so furtively powerful as to have become an entirely different order of corporate being.
“For many suppliers, though, the only thing worse than doing business with Wal-Mart may be not doing business with Wal-Mart. Last year, 7.5 cents of every dollar spent in any store in the United States (other than auto-parts stores) went to the retailer. That means a contract with Wal-Mart can be critical even for the largest consumer-goods companies. Dial Corp., for example, does 28% of its business with Wal-Mart. If Dial lost that one account, it would have to double its sales to its next nine customers just to stay even. “Wal-Mart is the essential retailer, in a way no other retailer is,” says Gib Carey, a partner at Bain & Co., who is leading a yearlong study of how to do business with Wal-Mart. “Our clients cannot grow without finding a way to be successful with Wal-Mart.””
For many site owners, though, the only thing worse than doing business with Google may be not doing business with Google. Last year, 65% of all searches conducted online were done on Google. That means being ranked in Google’s search results can be critical even for the largest widget companies. Wily Widgets Corp., for example, gets 68% of its traffic from Google. If Wily Widgets lost that traffic source, it would have to double its traffic and sales from the next nine largest search engines just to stay even. “Google is the essential search engine, in a way no other engine is,” says Bob Wiley, a partner at Wily Widgets., who is leading a yearlong study of how to do business with Google. “Our clients cannot grow without finding a way to be successful with Google.”
“No one wants to end up in what is known among Wal-Mart vendors as the “penalty box”–punished, or even excluded from the store shelves, for saying something that makes Wal-Mart unhappy. (The penalty box is normally reserved for vendors who don’t meet performance benchmarks, not for those who talk to the press.)”
No one wants to end up with what is known among webmasters as the “hand edit”–punished, or even excluded from the search rankings, for doing something that makes Google unhappy. (The hand edit is normally reserved for websites that blatantly violate Google guidelines or those sites that are knowingly operated by well known SEO’s.)
“There is also no question that doing business with Wal-Mart can give a supplier a fast, heady jolt of sales and market share. But that fix can come with long-term consequences for the health of a brand and a business.”
There is also no question that doing business with Google can give a site owner a fast, heady jolt of sales and market share. But that fix can come with long-term consequences for the health of a brand and a business.
Lessons to be learned:
- It is a poor business practice to put all your eggs in one basket. If you are relying on Google for a significant portion of your traffic/sales, you are setting yourself up for failure when Google has an algorithm shift or your site gets penalized, justifiably or not. They effectively own your business.
- Google currently owns the search space. If you are going to be playing in their space, it is best to play by their rules, especially if they supply most of your traffic. If you feel the need to take risks with your site, you should have a solid customer base along with a permission asset that allows you to successfully market to these people over and over again.
- Both Google and Walmart provide great services to end users. Although Walmart wreaks havoc on their suppliers margins, they do it to provide people with ‘Everyday low prices.’ Similarly, Google operates with the goal of having the largest most relevant index so people can find what they’re searching for.
There are many other quotes that could be applicable to Google in this article, but I have decided to only touch on a few. There are plenty of people out there who have their own opinions of Google who could find other segments of the article and relate it to their own personal experiences. I encourage you to go and read the article here, and let me know of any other similarities you can find between the two behemoths.