It seems Frooge is doomed to mediocrity

[shorebreak]

They don't charge for inclusion, and don't allow merchants to control their ranking. AND, the whole thing is funded by AdWords on the right.

If I'm missing something here, please tell me, but this seems like to most knuckle-headed business plan of all time. The contradictions abound:

1)Froogle's success will come at the expense of click-throughs to AdWords which fund it

2)Advertisers won't join en masse because they can't control product positioning, something they've all gotten used to with paid search, offline merchandising and comparison shopping engines.

3)Google gets half its traffic from distribution partners, but those partners have options (YHOO/Overture primarily, but eventually MSN as well) and will look for a partner who allows them to best monetize their traffic. If Google doesn't monetize Froogle to the fullest extent they will lose distribution.

Am I missing something?

[sun818]

Google's done well with free inclusion on the left column, and paid inclusion on the right column. Froogle is still in BETA, its too early to knock it.

[ThomasB]

They earn money by being an affiliate if possible.