This is the second in a multi-part series on Google and antitrust. Part 1 looked at how difficult it would be for a new player to start in Web search today.
Disclosures: I worked on AOL Search from 2004-2007, where Google was our algorithmic search partner. Any assessments of financial models are based on publicly released information and not any specific information I had access to regarding the terms of the AOL-Google deal or our negotiations with Google and Microsoft. My brother is currently employed by Google and I have many friends there. I went to high school with Google CEO Larry Page.
You don’t see algorithmic results
Google likes to say that the algorithmic results are untainted; that they’re based solely on hundreds of signals that mere mortals couldn’t possibly understand. That is true. But it’s also not a meaningful statement, because you often don’t see algorithmic results.
Atop the algorithmic results, you’ll see special content that favors Google products. Queries for stock quotes, maps, products and others highlight this content.
Google also blends in to its algorithmic results content from maps, news and social search. A result from Google Places can take the screen real estate of 6 or 7 algorithmic results. How do you tell other results result from an algorithmic result as a consumer? They’re not labeled. Experts can figure it out. But consumers consider them to be algorithmic results. More accurately, consumers don’t care — they trust Google to be impartial and bring them the best of the Web.
Even when Google presents its own content in the algorithmic order, it can give it special presentation that other sites don’t get. Consider this screenshot:
For the sake of argument, assume that YouTube had ranked lower than the original content on Bloomberg. The enhanced presentation of the YouTube video, with a thumbnail, duration and time stamp would drive more traffic.
Tying of other products (like social)
Google also integrates new products into Google’s Web search. If you happen to follow an account on Google+ and that person posts content that matches your search term, it will move up in the rankings for you. In this example, I did a search for “Rick Santorum” and the 10th result is a story by Danny Sullivan. It showed up there because I follow Danny on Google+.
When I do that search while logged out, the same result appears on page 2 in position 16. That’s a significant disadvantage as many searchers don’t go past the first page.
This creates an incentive for a) people to create an account on Google+ and b) people to share articles on Google+. The annotation also increases the likelihood of a click. Three of the four links in that result above go not to Danny’s article on Search Engine Land, but to Google+.
These incentives are especially critical right now when Google+ is struggling to gain meaningful adoption. On its own merits, I would not currently recommend that clients spend time on Google+. But because of the potential effect on Google Web search results, I think it makes sense for many businesses.
Google provides similar treatment for some links shared on Twitter, but this seems to be reduced now that Google is no longer licensing Twitter’s firehose. Even when it does appear, there is one link to Twitter compared with the three links Google gives to Google+.
In addition to the explicit incentives that Google creates, there are the implicit incentives created by Google’s black-box ranking algorithms. Legions of SEOs with no inside knowledge Make Shit Up. They advise clients how they can please Google’s algorithm Gods, often by making more use of other Google properties. (Which, of course, said SEOs can assist them with.)
Google bundles several discrete ad products together. In some cases, it is impossible for advertisers to opt out of certain properties that they might not want to buy.
In other cases, Google offers a wide range of other ad products that can be easily purchased with the primary Web search advertising buy. Advertisers can easily buy into the contextual ad network, mobile ads, etc. From an efficiency standpoint, this makes things much easier for advertisers. But the net effect is that Google can take more share of limited advertising dollars.
Ben Edelman, an assistant professor at Harvard Business School, wrote a great analysis of how Google’s practices affect advertisers. That was a topic that didn’t get much consideration in the Senate’s hearings.
Next in this series, I’ll look at good and bad aspects of monopolies.