Google is preparing to launch an expert network which will facilitate paid one-on-one consultations. Google’s ambitions are broader than those of existing expert networks such as Gerson Lehrman, as reflected in its prototype compliance platform. Unlike existing expert networks, Google plans to record consultations, but there are notable exceptions to this policy. Also, Google apparently plans a level of verification of it experts which surpasses many existing expert networks. However, its compliance platform appears inadequate for institutional-level interactions.
Google’s New Expert Network
Google Helpouts is essentially a way for experts in a number of fields to make money by offering their expertise to customers via Google+ Hangouts, the company’s video chat service. Experts can charge by the minute or by the session depending on their preference and the service rendered. In order to be paid, the expert and the customer will need to use Google Wallet. For each completed paid Helpout, Google will charge a 20 percent platform fee.
Essentially, Google is taking all the expertise seen in videos posted to places like YouTube, where fitness instruction and makeup tutorials are increasingly popular, and giving the experts in those fields the ability to directly profit from their skills beyond simple traffic-related advertising revenue.
Consultations will typically be recorded because Google is offering an eBay type conflicts resolution to refund customers for unsatisfactory consultations. Users can opt out of recording but if they do the money-back guarantee does not apply.
Recording consultations has been the elephant in the room for existing expert networks. Records of interactions during a consultation would act as a powerful deterrent to passing inside information. Hedge fund clients of expert networks have baulked at recordings, however, because of the cost of monitoring as well as the liability. There is a fear that conversations might be taken out of context by prosecutors.
Although recording consultations is a powerful compliance tool, but Google isn’t using it as such. For Google it is a client satisfaction tool. Not only can users opt out, but also healthcare-related consultations will not be recorded for privacy reasons. Given that healthcare has been one of the primary settings for inside information cases the decision not to record consultations obviates the compliance value of recording.
Google has retained outsourcing providers including Infinity Contact, Capita Customer Management, and VXI to interview prospective experts prior to allowing them on Google’s expert network. While existing expert networks offer some level of vetting of experts, the process is not consistently applied across providers. However, it appears that Google is mainly focused on verifying the qualifications of professionals, such as healthcare providers, and for others the review may be superficial from a compliance standpoint. There seems to be no effort by Google to require experts to sign terms and conditions analogous to the requirements made by existing expert networks.
The dearth of an effective compliance platform is a strong indication that Google is not currently envisioning its expert network competing for institutional business. Nevertheless, just as LinkedIn provides assistance to investors wishing to do their own expert recruitment, Google Helpouts offers a platform, however primitive, for arranging consultations. Further, there is nothing to prevent Google from adding an institutional component down the road if it wishes.
For Silverlake Partners, the private equity parent of Gerson Lehrman Group, Google’s imminent expert network launch must be exquisite torture. On the one hand, Google’s entry validates GLG’s attempts to launch a social media version of its services. Perhaps this is an opportune time for the long delayed IPO? On the other hand, Google’s new service may derail GLG’s social media ambitions.
Existing expert networks will take comfort in the fact that technology alone cannot create an effective expert network for institutional investors. Skill in understanding client requirements and subject matter expertise are essential ingredients for a successful institutional expert network. Nevertheless, Google’s entry will be of interest to all concerned.