Clew’s Deep Dives offer a closer look at some of the most loved search-related products.

A brief history

Bret Taylor is most known for his startup successes; FriendFeed which sold to Facebook for $50M in 2009 and Quip, to Salesforce for $750M in 2016. Less talked about, is Taylor’s early work on a product that made $0 in 2003. He was a young PM at Google, and the product happened to be a little thing called Google Maps.

In 2003, Taylor had an idea simmering in his head that users could search by location. The problem was that Google had no maps; therefore, the feature had no legs. There seemed a clear opportunity in mapping, and big players like Yahoo!,  were placing their bets. Larry Page and Megan Smith (Google’s VP of Business Development)agreed it was time for Google to make a push in the space.

Around the same time, Sequoia Capital, one of Google’s investors, was eyeing a potential startup based in Australia called Where 2 Technologies. The company was founded by two Danish brothers, Lars and Jens Eilstrup Rasmussen, who wanted to build dynamic maps that let users zoom and move around. Sequoia ultimately declined to invest in the startup after news broke of Yahoo!’s plans for scaling its mapping ambitions. But after hearing about Larry’s plans to enter the space as well, Sequoia gave a tip to the Google team about a potential acquisition worth looking at.

Google bought Where 2 in October of 2004, and quickly closed two more acquisitions in succession. One was Keyhole, a geospatial data visualization company, and the other was ZipDash, a real-time traffic data provider. Combined, the acquisitions became Google Maps, and Bret Taylor became its first product manager.

In a matter of months, Google Maps publicly launched in February of 2005. Taylor admits the product fared okay for about a year, contrary to the common narrative that the product was an overnight success. Over time, progress compounded; by 2006, Google Maps overtook MapQuest and Yahoo! in the race to becoming the largest mapping provider. It was the same year that Google opened its maps API to developers, enabling massively popular location-based products like Airbnb, Uber, and Zillow.

Sebastian Thrun 

Up until this point, Google Maps relied on two third-party data providers, Tele Atlas and Navteq. They licensed to car companies, GPS devices, and all of Google’s competitors. In 2007, both these providers were sold to larger companies, and Google realized Maps had an unhealthy dependence on third-party data. Larry and Sergey decided to visit Sebastian Thrun, a Stanford Computer Science Professor who ran the artificial intelligence laboratory as well as the school’s team competing in the DARPA challenge (a challenge to build an autonomous vehicle that could navigate a pre-set course). During the visit, Thrun told the pair that he was thinking about starting a company that would drive the streets of America with camera-equipped cars. Larry and Sergey decided to acquire the company at the end of that conversation, marking the start of Google Street View. All the data collected from Street View cars fed into an internal company project called GroundTruth which made it possible for Google to free itself from licensors.

Also in 2007, Apple launched the iPhone. Everything on the device was developed by Apple with the exception of Google Maps and YouTube. As Google began working on Android, there came a point where Google Maps started prioritizing Android above iOS. An app update in 2009 included turn-by-turn navigation. On the day of the announcement, Garmin and TomTom’s stocks plummeted 30%. To iOS users’ surprise, they realized the update wasn’t available for them. The same way Google grew weary of Tele Atlas and Navteq, Apple realized it couldn’t depend on Google and began developing Apple Maps. In 2012, tensions escalated when Apple removed Google Maps and made Apple Maps the default map installation. Unfortunately, Google had a near six-year head start on developing its mapping software and Apple Maps simply wasn’t on par. Apple Maps failed publicly and painfully. Tim Cook issued an apology after users revolted and Scott Forstall (who led Apple Maps) left the company.

Sensing an opportunity, Google assigned a dedicated team based in Kirkland to build Google Maps for iOS. In just three months, the team had a version ready to be shipped. A team member commented on the experience saying the following:

“The whole API surface is already written for Android. We just needed to be really good iOS engineers and connect to the right devices. Not that it wasn’t that hard, but it was actually architected really nicely for us to just make an iPhone app, that we just had be Objective C experts.”

The story highlighted Google’s engineering-driven nature, as it was no small feat to build and ship what they did in such a short time span. And what they shipped, users loved. In the first 48 hours Google Maps was listed on the App Store, it was downloaded on over 10M devices. Not long after, Google announced that Google Maps had amassed more than a billion monthly users.

The impact of Google Maps

Comparing cartography from 100 years ago to the world of mapping now, and the scale of improvements and change is astronomical. “Traditional” cartographers, equipped with protractors and proportional dividers, created maps by hand with the hope that maybe a few thousand people would use their map. Finding the answer to the question of how long it’d take to walk the perimeter of San Francisco would probably involve someone actually doing the unfortunate job. But, a kid today would need only look up the answer on their phone. And what they see on the screen would be the same as that of another stranger’s map on the other side of the world. An unbelievable level of detail is now freely available to billions of people. And not just that, but Google Maps has evolved beyond a powerful navigation tool to get from point A to point B. The product is a lens through which users discover their surroundings.

Traditional paper maps could never afford the space to label shops, restaurants, or little-known speakeasies. But nowadays, people want to see every nook and cranny of what a neighbourhood has to offer. The ability to expand the map view to focus on a single building’s footprint gives rise to place data. By 2014, the Street View cars had driven 99% of the public roads in America. With a little help from machine learning, Google parsed out business names, hours of operations, and relevant business information from its Street View images. Google’s Street View project did more than just relieve the company’s dependence on third-party data, it was a critical component in enabling richer features and strengthening Maps’ moat.

You can see the shape of the HVAC units 

While Street View creates place data, Google’s aerial imagery creates building data. When you zoom in on the map, Google uses its aerial images to show you 3D renderings of the buildings, some so detailed that you can see the HVAC units atop skyscrapers. By combining the place and building datasets, Google created Areas of Interest; the shaded yellow patches you see on the map that highlight bustling commercial centres. Competitors just haven’t gotten as good as Google in creating these features and details out of boatloads of data.

Source: RBC Capital Markets

Fast forward to today, the battle of the maps is fought between heavyweights, Apple and Google. The upper hand rests with Google, the market share leader, who is able to leverage its core search platform to deliver a more personalized, detailed, and feature-rich map to its users. Other players like Lyft and Uber are challenging  Google Maps’ territory too as they vie to be the one stop shop for getting from point A to B and to ready themselves for the future of self-driving cars. But Google Maps has been prescient, having enjoyed a six-year head start against Apple in data collection, and long moved on from being just a navigation tool in terms of product development.

Product monetization

For a rough sense of Google Maps’ opportunity, consider that Yelp posted 178M monthly active users and $943M in revenue for fiscal 2018. Google Maps has over six times as many users. Not to mention that Google Maps has more monetization streams atop its advertising business given how many businesses rely on its API. For instance, Uber disclosed in its S-1 that it paid Google $58M between 2016 and 2018 for access to maps, routes, and places.

Despite what the product has contributed to Alphabet’s top-line revenue thus far, it’s certainly the case that Google has taken a leisurely approach to making money from Maps. The product remains one of the few hugely under-monetized 1B+ user platforms, alongside Whatsapp. Still, Maps provides a tailwind for Google’s core search business with the information it provides in the form of store visits and foot traffic. But since the day Brett Taylor began working on the zero-revenue product, all the way until it surpassed a billion users, Google has been laying the foundations for what is clearly a goldmine. Sundar Pichai has this to say about the opportunity with Maps:

“I’ve always felt that Maps is a tremendous asset we have. And we have really focused on the user side of thing, and we will continue to do so because the growth is very, very high. So we see a lot of headroom. And — but as their experience is — we get a better understanding of it, we are developing our views on how we can bring monetization experiences. And so these are all steps in that direction. But we’ll take that slowly, and we’ll continue to evolve it here.”

Mobile searches for “stores open near me” increased 250% since 2017. Google’s own data shows that 76% of people performing local intention searches resulted in a same-day mobile visit, with 26% of them making a purchase. As mentioned earlier, Maps doesn’t just lend itself for navigation, but also discovery. Business have a huge incentive to pay to have their location pinned on Google Maps, because if you’re not on a map, do you even exist? Google Search is already a strong ad platform, but Maps gives rise to new and exciting ad formats that could command higher cost per clicks. Given how the growth of local mobile searches is outpacing mobile searches and the release of evermore location-based products, Google Maps is compelling to advertisers and third-party developers alike.

Some of the new ad formats are product-specific or navigation-based. For instance, product specific ads would enable users to browse through a store’s products, view prices, and receive promotional offers. Navigation-based ads would mean users could add a pinned location as a stop along their planned route. The rollout of new ad formats and local advertising is expected to drive an additional $1.9B to $3.6B in incremental revenue for Google by 2021.

What might the future of Google Maps look like?

Google is known for being a horizontal player, aimed at lending itself to as many users across as many devices as possible. But in recent years, the company has attempted vertical integration with its investments in hardware projects. The head of the Google’s hardware program, former Motorola CEO Rick Osterloh, as said this about the move :

“Fundamentally, we believe that a lot of the innovation that we want to do now ends up requiring controlling the end-to-end user experience…We needed to build a system that actually ran [Assistant] perfectly…Our aim is to give our users the best possible experience.”

With that in mind, Google Maps presents a huge opportunity for bringing the offline commerce experience to life. Maps is often the first thing someone checks to find someplace to go grab a bite, watch a live show, and just spend their money. Maps could continue moving further down the user journey by managing reservations, processing payments, or even challenging on-demand services with Waymo-powered delivery. If anyone is equipped to bring it all together, it’s Alphabet and its party of business units. Aside from the buzz about maps and its huge role in the future of autonomous vehicles, it’ll be interesting to see the product’s role in the future of experiential retail and dining.

Conclusion

Given the scope and ubiquity of Google Maps, it’s crazy to think that it began as a project proposal from a fledgling PM and emerged from a handful of small acquisitions. I think it’s an underrated product, deserving of more hype and coverage. But as Maps gets serious about monetization and complimentary industries like autonomous vehicles mature, the product’s golden moment looks to be just around the corner.

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