In November 2005, Telstra CEO Sol Trujillo famously dismissed Google by saying “Google Schmoogle” to ABC Radio. The transcript, which Auntie happily provides and Google kindly indexes, includes Trujillo saying “We’re outgrowing Google in Australia. We’re doing more, we’re growing faster and we have more capability, because we’re more relevant.”

Sensis supremo Bruce Akhurst said, on the same program, that Trujillo meant “…Sensis is outperforming search engines generally,” at least in terms of the traffic it attracts, especially for business-related searches.

Fast forward to yesterday’s announcement that Yellow’s ads will now be embedded in Google Maps, while Google search will replace Yellow’s own search engine and Google ads will appear on Sensis pages, and at first glance one would imagine that eggs are being wiped from faces down Sensis way.

The reality is, however, that for all of its search advertising muscle, Google hasn’t made a huge dent on Yellow’s ad sales. That’s impressive resilience by Yellow given Google’s astounding revenue growth from online ads, from $US1.57 billion in the quarter ended September 30th 2005 to $5.54 billion for the same quarter this year.

But Sensis has botched maps with its Whereis.com service offering a slow, low-resolution online mapping service that is nowhere near as much fun to use as Google’s, even if it is sometimes a little more accurate in regional Australia. Over the last two years, the company has tried to ape Google’s move of letting anyone develop applications around its mapping services. Almost nobody has bitten, because doing so would be as relevant as investing in new technologies for narrow-gauge steam locomotives.

Yesterday’s announcement is therefore an admission that Sensis can’t win on maps and needs someone else to carry its ads into a medium of growing importance to fend off other online business directories. It also shows that the position of online dominance Trujillo seemed to be imagining three long years ago may not quite be achievable. It’s also a shrug of the shoulders from Google that it can’t scoop up all online advertising, especially from entrenched and well-regarded indigenous brands, and cannot rely on its own properties to give its advertisers the reach they want.

It’s also an interesting incident in light of Telstra’s recent, softer, public pronouncements. Within weeks of Phil Burgess’ departure, the company started to venture into social networking by delivering customer service over Twitter and then went all wet with an online hand-wringing exercise about whether or not its blog is any good. Attack bloggers Rod Bruem and Rhonda Griffin, meanwhile, hardly post any more. Now comes a cuddle with Google.

Could it be that, post-Burgess, we have a kinder, gentler Telstra on our hands?

Peter Fray

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