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Story URL: http://www.silicon.com/research/specialreports/sme/0,3800004380,39127075,00.htm

Google launches into SME market
It's going to be a Mini adventure...

By Stefanie Olsen

Published: Friday 14 January 2005

Google on Thursday began selling the Google Mini, a low-price box for corporate intranet search, in a move to diversify its business.

With the new product, the Mountain View, California-based company hopes to broaden its search-appliance business to cater to smaller businesses with fewer documents and tighter budgets. The blue box, which plugs into a corporate intranet and searches up to 50,000 documents, went on sale on Thursday at Google.com for $4,995.

Google's seminal search appliance, introduced in 2002, starts at more than $30,000, in comparison. It searches 100,000 documents or more.

In addition, the company will introduce an upgrade to its larger search appliance that will give customers new security controls, among other features.

The Google Mini will initially only be available in the US. Google UK said that the company hopes to bring it to other international markets in the future, but it's not clear exactly when it might reach Britain.

The enterprise has been a sideline business for Google, which has made its name in web search with simple and relevant results. Analysts estimate that sales from its enterprise search products make up only $50m of its annual revenue, a small fraction of its near billion-dollar advertising business.

"It's a matter of focus. They've been focused on their core business," said Laura Ramos, vice-president at Forrester Research.

But that's poised to change, said Google Enterprise general manager Dave Girouard.

"While it's certainly small, we view it very much as a growing market. In terms of research and development and sales and marketing, you'll see us do more," Girouard said.

"We're a fast-growing business and we're profitable, and we think there's a strong need for search inside companies."

Girourd said the Google Mini is in the sweet spot of the enterprise business because it will appeal to more companies with a need for search that are typically priced out of the market. With its latest upgrade, the company is also improving the technology to delve into and search specialised databases, such as those made by Oracle.

Still, Google faces numerous competitors in enterprise search, including Fast Search & Transfer, Autonomy and Verity, the industry's largest player. Also, many companies, including Inktomi and Altavista (both now owned by Yahoo) tried to cater to small businesses and failed.

But Ramos said that the Google Mini could eventually be a big market for the company.

"Those other companies didn't have the deep pockets that Google does and don't have the brand recognition," she said.