3 ms·

Those two sentences have no connection. You can gain a huge amount of consumer surplus, even as the seller reaps almost none of it. Google's gain from ads bears

by gwern 5y ago

Those two sentences have no connection. You can gain a huge amount of consumer surplus, even as the seller reaps almost none of it. Google's gain from ads bears little relation to your gain from Google. (This is why people are so much better off in markets: it's actually very hard for a business to get more than a small fraction of consumer surplus.) As it happens, when people try to estimate your gains from a general purpose search engine, it usually comes in at like $100+/month (search 'willingness to pay search engine' and think about how long it would've taken you to find that in a physical library, and how you wouldn't've bothered in the first place because such a search would be impossibly expensive). So, $10/month would be a steal compared to not using a search engine at $0/month.

foxfluff 5y ago
> So, $10/month would be a steal compared to not using a search engine at $0/month. But that's a fantasy dichotomy as long as free search engines exist, and there's plenty of them. If you could somehow change the world and wipe them all out in an instant, I guarantee that people would scramble to provide alternatives. We will never live in a world where your only option is $10/month or no search. (Free & open source search engines already exist and you could host one at home or on a cheap VPS; there are also P2P search engines)
- greycol 5y ago
  The value proposition is in surfacing a result that you wouldn't already have from the free search engine. Your personal calculus will of course vary but lets do a basic business case with the following assumptions Free search engines work 95% of the time for your employees searches Kagi can get a result in half of the remaining 5% (this is definetly the biggest assumption and I haven't had enough experience with kagi to say if this is realistic) Your employee does 1 search a day and 30 days in a month (so kagi gets you 0.75 more completed searches a month). It takes an employee 15 minutes to search manually through documentation or come up with a solved algorithm from first principals when the search fails. In that situation your employees time needs to be worth less than $53.33 dollars an hour for the $10 dollar plan not to break even. So play with the numbers how you want to make up your own mind but it does seem reasonable to argue there's a market for it at that price. Personal use where missing a result could have no cost is ofcourse another question. edit: 0.75 not 1.5 searches a month extra
  - foxfluff 5y ago
    Sure, I'm not contesting that there's a market for it. Going along that line of reasoning, there's also a market for a group of experts you can phone and get an answer from at $100 / hour, and so on. But let's not push the goalposts too much :) My personal calculus says it's not worth $10 for me (I don't rely on search much for my work).
- gwern 5y ago
  Of course people would scramble, but it has nothing to do with how much value you can screw users out of using advertising, because even if ads were worth $0 revenue, search is so valuable you could just plain charge users. This is why there is essentially no relationship between the value of search and the ad revenue. The value of the ad revenue could be $0, and the value to the user would still be $100+/month. And because the consumer surplus is literally an order of magnitude or two more than the subscription fee quoted, that is prima facie a case that a subscription search engine could have a marginal benefit of >$10 compared to the free ad-supported engine. It, or the subset of searches you opt to use it for, only needs to deliver a little more value to be worth it. Quite aside from the problem of Google Search being increasingly jammed full of ads, wasting your time, or any distortion of ranking, people just plain dislike and avoid ads (https://www.gwern.net/Ads https://www.gwern.net/Ads).

by gwern 5y ago

foxfluff 5y ago

> So, $10/month would be a steal compared to not using a search engine at $0/month. But that's a fantasy dichotomy as long as free search engines exist, and there's plenty of them. If you could somehow change the world and wipe them all out in an instant, I guarantee that people would scramble to provide alternatives. We will never live in a world where your only option is $10/month or no search. (Free & open source search engines already exist and you could host one at home or on a cheap VPS; there are also P2P search engines)

greycol 5y ago
The value proposition is in surfacing a result that you wouldn't already have from the free search engine. Your personal calculus will of course vary but lets do a basic business case with the following assumptions Free search engines work 95% of the time for your employees searches Kagi can get a result in half of the remaining 5% (this is definetly the biggest assumption and I haven't had enough experience with kagi to say if this is realistic) Your employee does 1 search a day and 30 days in a month (so kagi gets you 0.75 more completed searches a month). It takes an employee 15 minutes to search manually through documentation or come up with a solved algorithm from first principals when the search fails. In that situation your employees time needs to be worth less than $53.33 dollars an hour for the $10 dollar plan not to break even. So play with the numbers how you want to make up your own mind but it does seem reasonable to argue there's a market for it at that price. Personal use where missing a result could have no cost is ofcourse another question. edit: 0.75 not 1.5 searches a month extra
- foxfluff 5y ago
  Sure, I'm not contesting that there's a market for it. Going along that line of reasoning, there's also a market for a group of experts you can phone and get an answer from at $100 / hour, and so on. But let's not push the goalposts too much :) My personal calculus says it's not worth $10 for me (I don't rely on search much for my work).
gwern 5y ago
Of course people would scramble, but it has nothing to do with how much value you can screw users out of using advertising, because even if ads were worth $0 revenue, search is so valuable you could just plain charge users. This is why there is essentially no relationship between the value of search and the ad revenue. The value of the ad revenue could be $0, and the value to the user would still be $100+/month. And because the consumer surplus is literally an order of magnitude or two more than the subscription fee quoted, that is prima facie a case that a subscription search engine could have a marginal benefit of >$10 compared to the free ad-supported engine. It, or the subset of searches you opt to use it for, only needs to deliver a little more value to be worth it. Quite aside from the problem of Google Search being increasingly jammed full of ads, wasting your time, or any distortion of ranking, people just plain dislike and avoid ads (https://www.gwern.net/Ads https://www.gwern.net/Ads).