Google: the Leader in Monetizing the Process of Web Searching

TORONTO (djc Features) — As it turns five years old, Google is enjoying a rare place in our Zeitgeist. It’s now almost journalistic cliché to note how its name has evolved into a verb. About 55 per cent of search referrals now come from Google, which serves 200 million search requests per day. The company, no dummy when it comes to building its brand, solicits Google success stories from users. Ann in Albany, New York, claims she diagnosed her own heart attack by doing a Google search. (If people are checking Google and not calling 911 in that situation, perhaps it’s become too good a brand.)

The privately held California-based company is the leader in monetizing the process of Web searching. There’s talk of using its search abilities to branch off into new areas, like finding just the right car, home or job. Its ubiquity in Internet life and apparent all-knowing nature led in part to the following headline over New York Times columnist Thomas L. Friedman’s June 29 offering: “Is Google God?”

While it’s not God, it is one of the more interesting companies around. It’s worth asking, for starters, whether Google deserves the hype, from both a technological and business perspective. Since it appears to be standing alone at the top of Search Engine Ridge, where does it go next?

As a search engine, Google’s success speaks for itself. According to a report by Web analysis company OneStat, Google accounts for almost 55 per cent of global searches. Yahoo is a distant second at 22 per cent, and MSN is even further back at just under 10 per cent. A different study by comScore found Google captures one-third of all English-language searches, although it trailed Yahoo slightly in the U.S.

Many things have made Google a winner. It has a clean, simple interface and is easy to use. “When they launched, the search engine world was all about portals and they were a breath of fresh air,” said search engine expert Tara Calishain, author of Google Hacks. “They’re still a breath of fresh air.”

It has a huge index of 3.2 billion pages. And from the beginning, it was designed by creators Sergey Brin and Larry Page to find not only documents with your search terms in them, but to find relevant ones. Old-school search engines required the complicated use of logical or Boolean operators to construct searches. Google hides that stuff. When presenting results, documents are rated according to their PageRank, and Google then looks at the links to a site and where those links originate. If Yahoo points to you, for example, that counts more than cousin Joe’s website. “Google combines PageRank with sophisticated text-matching techniques to find pages that are both important and relevant to your search,” reads the company’s website. “Google goes far beyond the number of times a term appears on a page and examines all aspects of the page’s content (and the content of the pages linking to it) to determine if it’s a good match for your query.”

This PR babble can get a bit thick. If you have Google’s toolbar installed, do a search on Olympics. The top link will be “>www.yellow-net.com/barbara/hall/barbara/hall.htm). It received a PageRank of 4/10, compared to 1/10 for Hall’s official site. Here is some of the fabulous content you get on Barbara Hall Mayor?:

Germany? I thought the election was in Toronto.

Kerin said there are certain key elements to getting a high relevancy ranking on Google or any search engine. That includes a catchy title and content with applicable keywords for Google’s crawlers to index, and good use of link tags. (Hint: anchoring around “click here” gets you no cred with a crawler.)

Remember, links are important. There are 30 links to Barbara Hall Mayor?, all from…the yellow-net.com domain! Can you say link farm? For barbarahall.com, a Google search for links turned up 26, including 12 from its own domain.

Relevance is very important to searchers, said Jim Jansen, a Pennsylvania State University professor. Over half of users in one study he conducted only looked at the first page of results. Roughly half only look at one document on that page.

But to support a staff of about 1,000, it’s not enough to provide great search results. You need to generate revenue from them, and impressive profit is what really has the industry slavering. Google wasn’t the pioneer; Overture, recently acquired by Internet giant Yahoo, was first into the game of matching ads to search terms (advertisers bid on search terms). But Google is the one that pros turn to when they want to get results. As an experiment (and apologies for my Toronto-centricity), I did searches on john tory mayor, barbara hall mayor and david miller mayor; Canada’s largest city is having its municipal elections this fall. John Tory’s text ad comes up along with the link to his site. On the screen’s right side, the ad also appears on the Barbara Hall and David Miller result pages — above Hall’s ad on Hall’s page! There is no such war on AlltheWeb, which is Overture’s search engine. However, AlltheWeb does produce a sponsored link to books by Barbara Hall — any Barbara Hall. (Interestingly, Barbara Hall Mayor? doesn’t appear first on AlltheWeb; barbarahall.com does.)

Every time some civic-minded Google searcher clicks Hall’s or Tory’s ad, a small chunk of change drops into Google’s jar. The private company doesn’t have to report financial results, but it has claimed to be profitable for nine quarters in a row.

Some reports put Google’s 2003 revenues between $600 million and $800 million (US). Yahoo is still the online revenue king, on track to reap about $1.2 billion (US) in 2003, but Google is the market leader in the fastest-growing segment. According to the Internet Advertising Bureau, search marketing captured 15 per cent of all interactive ad revenues in 2002, almost quadruple what it was in 2000. Experts predict it will be a $7-billion (US) per year business by 2007.

This could explain why Yahoo bought Overture this July for a total of $1.63 billion (US). That followed on the purchase earlier this year of Inktomi, a search technology company that is also involved in paid search placement. Overture itself had taken over AltaVista and the Web-search portion of FAST earlier. As an aside, Yahoo currently uses Google technology on its site and was an early investor in the company.

Miles Faulkner, president of Faulkner Consulting in Toronto, wrote this summer: “The Yahoo acquisition of Overture demonstrates the value of size — whilst many have looked at the revenue Yahoo was buying, they also acquired five per cent of net new unique visitors as part of their search property listing — a clever feat that will make them the clear leader in this segment of the market regardless of Google’s invasion of the English language.”

Yahoo declined to be interviewed for this article. For that matter, so did Microsoft, although it did say in a statement that “Yahoo’s acquisition of Overture has no near-term impact on the MSN Search business.” It added: “MSN is in the search business for the long term, and we look forward at being at the forefront of delivering those improvements to consumers.”

On Yahoo’s moves, Google itself would only say (in a written response to a submitted question): “Google does not comment on other companies’ acquisitions.”

MSN renewed its arrangement with Overture a week before it was purchased by Yahoo. It also uses technology from Inktomi, a Yahoo property. Having a competitor like Yahoo own a key part of its site can’t be beneficial for MSN, which is why it now has its own bot crawling the Web.

Google’s view on MSN is evasive: “It’s positive for the industry to see other companies take more interest in the search space. Google will continue moving forward with its innovations, providing users with the best search experience on the Web.”

While the market might like Yahoo’s purchase of Overture, Google continues to pull ahead. It ate a big chunk of Overture’s lunch by stealing AOL away from them. If you’re a small advertiser, Google’s AdWords allows you to set up a self-serve account online. If you’re in the Web publishing business, AdSense allows you to capture revenue by putting AdWords ads on your pages.

Overture offers some of the same services, but here’s the thing: Accessing those same services appears to be much easier on Google. Usability wins on the Web.

Innovation also prevails. Google hosts contests for developers (you get the prize money, they keep the code!), and offers access to an API (Application Programming Interface) key to build custom search utilities. To see what Google is cooking, go to labs.google.com. Try the voice search.

A Google rep said it continues to explore new ideas with searchers in mind. “In recent months, we launched Google News, which enables users to search up-to-the-minute news in more than 4,500 news sources from around the world, and Froogle, which enables users to search for websites that specifically sell the products they’re searching for. We will continue to review feedback and suggestions from users to learn more about the types of information they’re interested in searching.”

Invariably, Google has hung on to one lasting aspect of dot-com culture: Ideas are encouraged to flow from the bottom up. “Google instills a positive work environment that encourages creativity and communication among employess (sic),” the rep said. “We think it’s important that employees enjoy their work environment and are rewarded with generous perks such as complimentary lunches and dinners, on site medical care, etc. Such benefits are a small cost to the company and provided added value for employees.”

For all that, are they eternally unbeatable as a technology? Well, not really.

Experiment with Teoma or AlltheWeb, as two examples, and decide for yourself. The index of AlltheWeb is almost as colossal as Google’s. (The two were going through a bit of a “mine’s bigger” competition this summer.) It also offers audio, video and FTP searches, plus gives logical clusters of results for further sub-searching. Teoma offers suggested search refinements, plus link collections, and Dogpile has been garnering positive buzz lately with its meta-search engine that returns results for your query from Google, AskJeeves, Teoma and other major search engines. Others are talking about Turbo10, another meta-search engine.

It’s worth remembering that in the not-so-distant past, search engines like AltaVista, HotBot and Excite were all considered the white-hot celebrities of search engines. Not to be cruel, but now they’re stuck on the B-list. According to Calishain, the ruin of many prominent search engines started when they decided to become portals. Another killer was convergence, where being a great search engine was no longer the focus.

At Google’s fifth birthday party, it’s easy to imagine Brin and Page reminiscing about the good old days when they were PhD students in computer science at Stanford University, tossing around the ideas that would form the paper The Anatomy of a Large-Scale Hypertextual Web Search Engine — their original vision for Google.

On Sept. 7, 2008, when Google turns 10, it’ll be interesting to see whether their brainchild is still an Internet giant, whether MSN or Yahoo was successful in trumping them, or whether two new hyper-brainy whizzes will have shot to fame after conceiving a better way to search.

Getting Hired at Google

James (a pseudonym) had a brush with Google greatness, and the experience gave him some insight into why the company is successful.

Three years ago, before Google became a global brand, the 24-year-old Toronto programmer sent a resume to the Mountain View, Ca., company. “In the geek crowd they got a huge thumbs-up, so I thought this was as good a place as any.”

Google wrote him back saying they liked his skill set, and set up a telephone interview with an engineer (everyone involved in software development at Google is an engineer) that lasted an hour.

“It was probably the most intense, from a logic problems point of view, interview I’ve ever had.”

There was a series of three questions. Here’s one: You are given two pieces of string and a lighter. If you light the end of one piece of string, it will take exactly 60 minutes to burn all the way through. The problem is, it doesn’t burn at a constant rate so it might burn the first half of the string in one minute, then take 59 minutes for the second half. How can you determine when 45 minutes have passed?

Google was obviously looking for “the cream of the crop,” he said. No interview he’s had before or since was as challenging.

As it turned out, the job James was after was merged with another position, and his skills didn’t match up with the new one. While he likes his current job, he regrets not hooking up with Google.

“(It) would be a neat place to work. Just the products they release, the programming contests. It really gives the impression they’re a great company to work for.”

A lot of people apparently think the same way. Google receives about 1,500 resumes per week.

In the next issue of Digital Journal magazine

Google has obviously done a lot right in its first five years. However, when you become big, you also become a target. Some question why Google’s cookies don’t expire for another 35 years, or why they don’t purge the search data they collect for IP addresses. Why do some jobs at Google require a U.S. government top security clearance? If your business depends on Web-driven traffic and your ranking changes for no reason, that can have serious consequences. In Part Two, Digital Journal will examine the problems that might stem from Google’s growing power.

To see part 2 of this series click here