Google and Hakia conducted in July 2009 yielded excellent results on Google and inappropriate results on Hakia. Google directed me to sites such as the Mayo Clinic’s orthopedic pages, where I leaned about the malady known clinically as iliotibial band syndrome, which involves chronic tightness and pain in a band of connective tissue that runs from the hip to the knee. Hakia, supposedly specializing in medical searches, directed me to the Wikipedia site for the Band, the musical group that first gained international acclaim by backing up Bob Dylan in 1965 and 1966 and went on to deliver some of the greatest American music until it broke up in 1976.21
While Yahoo struggles to keep itself in the game, the two behemoths in the search-engine competition, Google and Microsoft, continue to battle each other, not just in the search-engine field, but increasingly across the whole domain of computer software and online services. In hopes of keeping Google off its guard, in June 2009 Microsoft released Bing, developed in a partnership with Yahoo, which is a completely revised version of its Live Search engine. To differentiate itself from Google, Microsoft has advertised Bing as a “decision engine” as opposed to a search engine. It specializes in searches about travel, shopping, health, and local knowledge. In other words, while Wolfram Alpha is experimenting with ways to peel off some searches from Google that concern factual data, Microsoft hopes to attract consumers. The advertisements Microsoft ran ridiculed Google for offering too much information when users just want to buy stuff. Early on, Bing seemed able to pry some users away from Yahoo but posed no major threat to Google in the U.S. search market.22
In July 2009, just after Microsoft announced Bing in an attempt to force Google to refocus on its core moneymaking activity—Web searches and the advertising they generate—Google countered by announcing the development of a light, clean operating system that would run on a small, cheap computer, a netbook. This operating system, to be known as Chrome OS (just like the Web browser Chrome), would simply run a browser—like Chrome, for instance. It would facilitate Web-based services, thus pushing more users away from bulky, expensive, poorly designed programs such as Microsoft Windows and Office and toward programs that operate via the Web (“in the cloud”), such as Google Docs. Realistically, Google’s initiative is no short-term or direct threat to Microsoft’s dominance in the personal computer software market. But over time it could chip away at new markets in the developing world that are much more price sensitive and whose consumers are interested in connectivity rather than processing power.
All these developments have occurred as part of the dance between these two behemoths. Among the arenas where that dance takes place are the law courts and the halls of regulatory agencies. Microsoft suffered some major legal hits in 2000 when regulators in the United States and Europe cracked down on its abusive practices that had limited competition in the Web browser market and threatened to lock down Microsoft’s advantages in a number of markets. By 2008, Microsoft was pushing for regulators to rein in Google’s ambitions and initiatives. Microsoft’s complaints were a key element in scrapping the proposed Google-Yahoo collaboration on Web advertising in 2008.23
Bing did not threaten Google’s core revenues. Chrome will not threaten Microsoft’s core revenues. But in the event that something changes in the world and one firm or the other undergoes a serious change in structure or personnel (because of pressure from new firms, consumer uproar, or government actions), the other would be poised to capitalize on the shift.
Among the most interesting responses to Google’s dominance of search in Europe and North America was Quero. Funded in 2005 by a partnership between the governments of France and Germany, and with the support of the European Union, Quero was intended to correct for the perceived American cultural bias inherent in Google. Underfunded, slow to develop, and unable to resolve disputes between France and Germany over Quero’s scope and role, the project died in 2007. As of 2010, Google is more popular than ever among European Web users.
None of these new search initiatives are compelling enough to wrest major portions of the search market away from Google, which is just so good at what it does, and clearly getting better every day. Even a slightly better service, result set, or interface design makes almost no difference to users. Google is now the comfortable choice for most users, and its array of services makes it undeniably useful. By default, it’s easier to stay in the Google universe. One must consciously act to move beyond it (although, as I discuss in chapter 4, Google’s dominance does not extend to some of the largest and most interesting markets in the world: Japan, South Korea, Russia, and China). Ultimately, Google’s overall dominance matters chiefly if we are concerned with the intellectual and cultural health of the Web. And if we are worried about the economic effects of Googlization, we must follow the money. Users have no stake in questions of market share. Firms that advertise on the Web, however, do.
ADVERTISING
At least in terms of revenue generation, Google’s core business isn’t facilitating searches, it’s selling advertising space—or rather, selling our attention to advertisers and managing both the price it charges for access to our attention and the relative visibility of those advertisements. In this field, Google is more than successful: it is simply brilliant.
In the era before Google, firms created products that they sold to customers by means of advertising that conveyed information to potential buyers. Google has completely reconfigured this model. Its own product, as I have said, is in fact the attention and loyalty of its users. While Google provides users with the information that they seek, seemingly for free, it collects the gigabytes of personal information and creative content that millions of Google users provide for free to the Web every day and sells this information to advertisers of millions of products and services. Through its major advertising program, AdWords, Google runs an instant auction among advertisers to determine which one is placed highest on the list of ads that run across the top or down the right-hand column of the search results page.
Using Google is far from free.24 Users incur up-front, sunken costs (computer hardware) and regular utility costs (Internet service), but Google doesn’t profit from these costs. Google’s real customers are the advertisers who pay Google to compete in an auction to rise to the top of a list of “sponsored results” that frame the “organic results” of each search. Content creators have passively allowed Google access to their sites for the privilege of being indexed, linked, and ranked. The data on who cares about which of these sites is accumulated, and access to those potential consumers is sold to advertisers at a profit.
It’s here that some troubling effects of the Googlization of everything start to become apparent, and where existing efforts to deal with those problems have fallen short. If there is one market in which Google has an inordinate share and exercises alarming power, it is Web-based advertising. In 2008 Google earned more than $21 billion (97 percent of its revenue) from online advertisements. In contrast, Microsoft lost $1.2 billion in its online advertising business. Google gives away most of its services to users for free in exchange for their attention. Microsoft, by contrast, leases software to consumers so successfully that it has been among the fifty wealthiest corporations in the world for most of the past fifteen years. Viewed in these terms, it’s inaccurate to consider Microsoft as even being in the same business as Google. The parties most concerned about Google’s dominance in the field of advertising on search engines are not Google’s ostensible competitors like Microsoft, but the companies that buy slots to run the small bits of text that sit to the right and just above the search results on most queries—the advertisers themselves.
Google did not invent contextual advertising on the Web, but it certainly mastered it. A long-gone search-engine company called GoTo.com developed a way to link search results to advertisements in 1998.25 By the time Google decided to adopt that practice in 2002, it had settled on an ingenious way to sell the best positions around a search term: an instant auction. If a user types “shoes” into a Google search box, Google’s computers instantly solicit bids from shoe vendors. The highest bidder—the
