Google and global market search: information signals and knowledge indices

With perfect information an economically rational market is expected. In the ICT age the introduction of a shopping/price comparison facility (Froogle) by a company with a search reputation as pre-eminent as Google leads to the expectation that it will allow comparison of products in terms not only of price but also of other aspects to an extent that appears to approach perfect information. Telecommunications and media companies and even retailers such as Wal-Mart increasingly see such initiatives as a competitive and strategic threat. This paper proposes a conceptual framework within which to analyse the strategic impact of consumer information channelled through global market search. In this we distinguish between information signals and knowledge indices arguing that the specific properties of information signals as distinct from knowledge indices and the critical role of intangibles place limits on the ability of purely fact-based search to eliminate 'friction' in markets.