Can local merchants compete with Internet merchants? Think - and thank - Google

This Forbes article speaks of a rather interesting proposition for local businesses that may have seen their customers shift ever-so-slightly into shopping over the web. How can they compete like it's 1999? First of all, don't buy the Prince song on iTunes. Second, follow Google Local to your heart's content.

Instead of trying to replace local merchants with Google Base, Google has been trying to create partnerships with merchants anywhere and everywhere. Reason: the lucrative advertising revenue that comes from matching buyer and seller. It's eBay for the advertising age, to coin a phrase.

I've said it once too often, but it appears from this angle that Google's intention is to become the biggest source of advertising on the planet. Its move beyond the traditional Internet into broadcast radio with the DMarc acquisition and municipal WiFi service with the Earthlink partnership, will allow its incredibly ad-targeting platform to shine.

After all, the more Google helps global and local merchants match what they offer insofar as products and services, the more lucrative ad revenue it gleans from each looked-at item and each completed transaction. By siphoning a little bit off each transaction -- and by helping business partners to convert shoppers into buyers -- all the worlds' billion-dollar economies stand to pound hard cash straight into Google's coffers, and perhaps into your portfolio if you hold GOOG.

Maybe the Google folks are having a precognition of future strategy by already having a product called Google Earth.