Will Google Compare Be Viewed as a Successful Failure?
Robert Regis Hyle | February 24, 2016
Failure is not always a bad thing. There are many reasons why projects and initiatives don’t succeed and they can’t always be blamed on a lousy product. I have to believe Google’s decision to shut down Google Compare, its price comparison tool for personal auto insurance, falls under that category.
The big worry when Google made this initial foray into the insurance market was that one day the search-engine giant—or similar-sized technology companies—would use their technology skills and their capital to take over the most profitable lines of the insurance industry—personal auto and homeowners.
It could still happen, of course, but there will be plenty of dissection of the Google Compare carcass before another tech giant jumps into the fray.
Matt Josefowicz, CEO of Novarica, urges insurers to refrain from reading too much into the Google decision.
“What Google seems to have proved is that the business InsWeb and others tried 15 years ago—converting comparison shoppers into immediate buyers directly through the comparison site—is still a lackluster business,” he says.
Deb Smallwood of Strategy Meets Action believes the industry should have mixed feelings about what happened to Google Compare.
“Should insurers be happy or sad?” she asks. “I say both. Sad to know that this attempt at innovation failed, but happy to know it is not the end, and the industry will learn from this.”
Google Compare will barely mark its first anniversary by the time the site is shut down, but despite that relatively small period of time, Smallwood doesn’t believe Google acted rashly.
“The key to successful innovation is to know where to place your bets and know when to fold them,” she says. “Failure is part of the process. Google is one of the smartest and most innovative companies. It knows when to fold them, and knows when to reopen, too. I will not be surprised to see them reappear with the next-generation comparative tool, but rather than focus on insurers needs to quote, it will be focused on the consumer needs for insurance.”
Josefowicz agrees: “A bigger question is, what else did Google learn about insurance shoppers from this experiment, and how will they use that information to create new offerings that they can sell to the insurance industry?”
So insurers may not have seen the last of Google (or Amazon or a host of other tech companies) just yet. These companies didn’t get where they are by pouring billions into something only to expect millions in return.
Josefowicz points out Google already makes a ton of money off insurance through its AdWords.
“Google may have realized they can make more money with less investment selling advertising to insurers than selling insurance itself,” he said.
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