Google 411 Competitors Hold All The Patents
Google’s free 411 service, 800-GOOG-411, is going to face a lot of problems in the future, as rival free 411 services have been granted patents on techniques endemic to the industry Google is trying to get in on. Search Engine Journal reported that Local.com received last week a patent on a method of responding to directory assistance queries, including the referral-based business model. Meanwhile, TechCrunch reported that Jingle Network received a patent for playing a recorded advertisement based on a directory service query.
Besides the fact that the two patents may contradict each other, and should never have been granted due to them being a combination of existing technology (voice recognition) with a popular business model (referral/targeted advertising) on a known service (directory assistance), Google still has a lot to deal with. If the patents hold, Google will have to pay significant licensing fees to one or both companies, or face costly litigation to challenge the patents.
Google obviously wants GOOG-411 to succeed, but if the price is too high, they might be better off staying out of this one. Local.com stock is up 146% over the last two weeks, but has been tapering off as excitement over the patent dies down. Google could probably initiate a hostile takeover of the company for $100 million or less right now, solving this before it becomes a big mess.
Previous article on GOOG-411:
Google Launches Free 800-Number Local Search - April 11
Google 411 Shaking Up 411 Industry - April 13
Google 411 Draws You A Picture - July 3
Here’s another reason the Google 411 number won’t make it: it doesn’t compete well with 1-800-Free411. The Goog number has no live operator support as a back-up, and offers only business listings. 1-800-Free411, in comparison, does have operator support as a back-up, and has business, residential, and gov’t listings. These differences mean that users will continue dialing 1-800-Free411 not only because we have a more memorable number but also because we give them better results.
Comment by Paul from Jingle | July 10, 2007