The Next Target for Google: Corporate IT Budgets

There’s an old debate in the Valley about whether Google (GOOG) is really a media company or a technology company. In a sense, it is a silly debate, which is mostly a matter of semantics. A better question is this: Now that Google has become one of the world’s largest media companies, at least as measured by advertising dollars, what does it do next?

After all, the company has tried but generally failed to extend its approach to selling advertising into offline media sectors like television and radio. Nonetheless, as Thomas Weisel Partners analyst Christa Quarles notes this afternoon in the latest edition of her Internet Quarterly report, Google is already the largest media company in the world as measured by ad dollars, with about three percent of the total market. She suggests comparing that to Wal-Mart (WMT), with about four percent of the global retail market.

Quarles notes that the company intends to extend its advertising reach into the mobile, display and video sectors “by improving relevancy and efficiency.” But the more lucrative opportunity might lie elsewhere, with corporate IT budgets.

Quarles notes that Google has barely put a dent into global IT spending, with only about a 0.1 percent share of what was a nearly $400 billion market in 2008; she sees this as “a large and untapped market for Google.”

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