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It's Not Your Competition, It's the Environment

By - January 01, 2007

A post on Skrenta heralds Google as the winner in the third age of computing. Worth a read, some major points include:

* Yahoo is effectively letting $1.5 billion in revenue sit on the table so long as they chose not to allow AdWords to handle their search monetization.

* “Google is the start page for the Internet. The net isn’t a directed graph. It’s not a tree. It’s a single point labeled G connected to 10 billion destination pages.”



* Alluding to Battelle’s database of intentions: “Google’s CPMs are $90-120, vs. $4-5 for an average browse page view elsewhere. This value premium on search vs. content is because of the massive concentration of choice potential which exists on the decision point, Google.”



* Next step, dominating the verticals: “It’s actually not inconceivable that they could eventually own all of the destination page views too. Crazy as it sounds, it’s conceivable that they could actually end up owning the entire net, or most of what counts. Complaints are already being heard about Google using their starting point power to muscle into verticals.” Here Skrenta is referencing the new Google Tips on their homepage, on which Firefox brain Blake Ross, generally a friend of Google, just posted a scathing note of criticism.

* Zero switching costs for users means that a search engine with even a modest advantage will attract a snowball effect of preference, to paraphrase Skrenta. That’s an advantage underlined when brand recognition is taken into account.

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5 thoughts on “It's Not Your Competition, It's the Environment

  1. Steven says:

    Even more importantly Google is a verb

    http://www.winextra.com/?p=207

  2. westsider says:

    Time for an “open source” search engine without ads and with public algos. Maybe Blake Ross can get that going.

  3. aşk says:

    Quote : “Alluding to Battelle’s database of intentions: “Google’s CPMs are $90-120, vs. $4-5 for an average browse page view elsewhere”

    really? Good CPMs..

  4. vps hosting says:

    Well, i agree i guess the idea of a open-source search engine would match and i think there should be a launch with the progess of other technologies.

  5. Kamal Jain says:

    IMHO, calling an advertisement a “tip” is a disservice to search users.

    Also, self-bidding is simply as much dishonest to other buyers as an ebay seller bidding on his item via a separate ebay account.

    Even worse, since Google does not use VCG (a truthful bidding mechanism), self bidding hurts competitors. Even if Google ad makes a smaller use of the top ad slot than another advertiser still Google may benefit by showing its own ad there. Therefore drastically hurting other advertisers by charging them the price of the top slot click but showing them on the second place. This issue does not arise if Google shows its own ad at the bottom most ad slot.

    I personally have never seen Google own ad on Google search pages at any spot other than the top spot. If anybody else has seen Google’s own ad at a second place or lower please do send me a screen-shot.

    Disclaimer: The commentator works for Microsoft, a Google competitor. The opinion is his own and could be backed by abstract examples.