3 ms·

I believe that the only moat protecting $100B of AdWords revenue is the quality of the Google Search results. There is no meaningful switching cost to using a n

by gomox 5y ago

I believe that the only moat protecting $100B of AdWords revenue is the quality of the Google Search results. There is no meaningful switching cost to using a new search engine, and the spend inertia in ad spend is not very significant (i.e. any online marketing manager will happily spend 5% of their budget in a different search engine adwords-like program if they get better ROI, there is no incentive the be a "Google Ads only shop"). On the other hand, Google needs to maintain the ballistic trajectory of its revenue growth. So how can they fix search quality when they've minmax'd themselves into this situation in the first place? If they were to make the ads background yellow again, that would have negative short term effects that I doubt any career exec can stomach.

dredmorbius 5y ago
No. The other moats are lock-in to advertising networks, website metrics, and effective control over Web standards through the Chrome browser. An alternative search platform might provide better search. It would be fighting Google on at least three other fronts. It might have some success, but it would be challenging. (As history largely demonstrates.) Even a rival tech monopolist, Microsoft, barely holds even with its own search offering (I use that indirectly via DDG), and scrapped its own web-browser development
- gomox 5y ago
  I mean, Google is big and it has that advantage like any big enterprise, but the search engine market is very permeable compared to what people traditionally refer to as a moat (say, trying to compete with YouTube as a video hosting platform or with Salesforce as a CRM). If you have a good search engine, people will flock to it, and search ads will be valuable. That's it. That's how Google became Google. The fact that Microsoft couldn't do it honestly doesn't mean much. Microsoft also couldn't do a phone OS, a portable music player, and many other things. They have a complex web of conflicting interests that $SEARCH_ENGINE_STARTUP does not.
  - dredmorbius 5y ago
    Just for the record, I'm in at least mild agreement that search is looking increasingly vulnerable. Google are falling down here. It's just that "search" is really a web of interrelated services, capabilities, and revenue streams, and they tend to reinforce each other strongly. I'd like to see the monopoly disrupted.[1] But I don't think it's just a matter of "build a better mousetrap^Wsearch engine." Attack one corner, and Google will snipe at you from the others. And with the AdWords cash cow, they've got an immense revenue stream. ________________________________ Notes: 1. Well, mostly. Google's acquired so goddamned much personal data that the premise is frankly kind of terrifying as well --- a weakened Google with neither the revenues nor talent to defend that pile.... And I'd really like to see the toppling occur without simply raising a new monopoly in its place.
pythux 5y ago
“ There is no meaningful switching cost to using a new search engine.” Unfortunately, defaults matter and Google is spending billions of dollars yearly to make sure they are the default search engine wherever they can. Most people don’t switch from default.
- gomox 5y ago
  The way I see it that's only a problem if you want to be bigger than Google. But you can get to $1B in revenue with just the deliberate adopters (i.e. under 1% of the market).

by gomox 5y ago

dredmorbius 5y ago

No. The other moats are lock-in to advertising networks, website metrics, and effective control over Web standards through the Chrome browser. An alternative search platform might provide better search. It would be fighting Google on at least three other fronts. It might have some success, but it would be challenging. (As history largely demonstrates.) Even a rival tech monopolist, Microsoft, barely holds even with its own search offering (I use that indirectly via DDG), and scrapped its own web-browser development

gomox 5y ago
I mean, Google is big and it has that advantage like any big enterprise, but the search engine market is very permeable compared to what people traditionally refer to as a moat (say, trying to compete with YouTube as a video hosting platform or with Salesforce as a CRM). If you have a good search engine, people will flock to it, and search ads will be valuable. That's it. That's how Google became Google. The fact that Microsoft couldn't do it honestly doesn't mean much. Microsoft also couldn't do a phone OS, a portable music player, and many other things. They have a complex web of conflicting interests that $SEARCH_ENGINE_STARTUP does not.
- dredmorbius 5y ago
  Just for the record, I'm in at least mild agreement that search is looking increasingly vulnerable. Google are falling down here. It's just that "search" is really a web of interrelated services, capabilities, and revenue streams, and they tend to reinforce each other strongly. I'd like to see the monopoly disrupted.[1] But I don't think it's just a matter of "build a better mousetrap^Wsearch engine." Attack one corner, and Google will snipe at you from the others. And with the AdWords cash cow, they've got an immense revenue stream. ________________________________ Notes: 1. Well, mostly. Google's acquired so goddamned much personal data that the premise is frankly kind of terrifying as well --- a weakened Google with neither the revenues nor talent to defend that pile.... And I'd really like to see the toppling occur without simply raising a new monopoly in its place.

pythux 5y ago

“ There is no meaningful switching cost to using a new search engine.” Unfortunately, defaults matter and Google is spending billions of dollars yearly to make sure they are the default search engine wherever they can. Most people don’t switch from default.

gomox 5y ago
The way I see it that's only a problem if you want to be bigger than Google. But you can get to $1B in revenue with just the deliberate adopters (i.e. under 1% of the market).