16:04 PM

The Trouble With Google's Yellow Pages Experiment

Google is testing a new service in Houston, Texas. The New York Times reports on the experience of the Kingpinz Skateboard shop: [These battle lines are drawn in Yellow.]

Mr. Cowie is trying something new: for a flat fee of $25 a month, he is making his listings on Google stand out. Whenever his shop comes up in a search page or on a Google map, it is adorned with a bright yellow tag.

It's working pretty well:

Just type "skateboards in Houston" on a search engine, and his store will be among the first listed.

Mr Cowie loves the new service. And it's no wonder:

... buying search ads on Google -- got to be pretty expensive. Mr. Cowie, whose shop is just 1,000 square feet, found himself bidding for placement against deep-pocketed national chains, and having to spend $1,500 to $2,000 a month just to keep up.

What a great new business for Google. It replaced revenues of $1500 to $2,000 a month from Mr Cowie, with $25 a month.

But there is another aspect to this story. Google has begun to mix organic search results with 'sponsored' search results. Prior to this, the results were separated. Sponsored links were always on the right, and the main search results were 'organic,' they were listed on how relevant they were to the query -- not because of payment.

Take a look: