3 ms·

Search engines have always been a bit weird. Do they have network effects? Why is it actually winner-take-all? I've had spirited conversations with a lot of dif

by j-wang 3y ago

Search engines have always been a bit weird. Do they have network effects? Why is it actually winner-take-all? I've had spirited conversations with a lot of different people and academics/microeconomists on the topic and I don't think anyone truly has a good conclusion. It doesn't naturally seem like it should be the case. Anyway, I think your point here is interesting and was kind of the idea behind a lot of the "gather lots of data" startups. A lot of those failed in part because the frontier of AI is moving pretty quickly. You need a lot less data to do interesting thing today than you did not that long ago. Because we've thrown more and more data at more and more compute, I think people don't appreciate how much we've truly progressed algorithmically. You need an order of magnitude less data to do the same thing for each "generation" of AI. That frontier cuts against the ability to build a moat on user-generated data, so long as it's readily available or somewhat replicable. Your competitor is naturally going to have a cheaper time getting into market than you if they wait longer to do so. However, this definitely does stand if your area truly is obscure (e.g. specific industry), annoying to gather data in (e.g. certain healthcare applications), or actually proprietary (e.g. your own device data with a different modality). Not putting words into your mouth that you aren't saying the latter here—just making a distinction since it's easy to imagine any data being a moat, which is a common mistake I see.

JumpCrisscross 3y ago
> Why is it actually winner-take-all? Is search winner takes all? Or is it advertising?
- j-wang 3y ago
  That's an interesting question since advertising certainly follows search dominance, but it doesn't necessarily follow the other way around. Google figured out how to monetize its dominance with advertising before it had the behemoth ad platforms they have today. It's pretty much the same with the popular social networks. The answer (more logically) should kind of be neither. Advertising obviously has a lot of channels, and even though Google has both Adwords and its display advertising network, it doesn't follow those really need to be the same provider... at least outside of more data to do more targeted ads. But, again, advertising dollars will follow platforms that price for ROI. Better targeting mainly adds to the amount that Google and Facebook can charge for their ads and still have companies pay for them. It doesn't really add to their dominance directly (I say directly since, obviously, more money can buy more R&D/employees/regulatory capture/acquiring competitors/just-paying-for-dominance like with Google paying Apple. But that's all indirect).
- esafak 3y ago
  Nothing prevents users from switching search engines. I switched mine! Advertisers on the other hand want as many eyeballs that fit their target profile as possible.
tqi 3y ago
Agreed that it's not intuitive. My guess is that it's not a network effect in the traditional sense (where having more users makes the product more valuable), but rather that there is something about a product category being free that lends itself to being winner take all. Users are less motivated to comparison shop, and if any one company gets enough marketshare to be a default choice then maybe it just snowballs. Like if tissues were free, would Kleenex have a monopoly bc everyone just reaches for it by default?
- j-wang 3y ago
  Potentially—I suppose free can lead to more justifiable laziness in finding different resources for different things. The argument I generally hear from certain microeconomists is that they still expect there to be value in niches, given Google's highly general nature. If you're looking for super specific topics, it often doesn't perform extremely well. You'd find it valuable to go to a resource tailored for your area. Anecdotal, but I've personally found it to be true—for specific hobbies, or for more "real" reviews, I search reddit. Except I use Google to search reddit, since reddit's search sucks, but still. Amazon or Etsy or whatever can be considered "search engines" for highly specific topics (purchases, and purchases of a specific type of product) and they do have success there too, but Google is still often the front-page to get people to those sites. Maybe it's just that Google is just a default "front-page" and enough tech-non-savvy people just use it to get to where they want to go (e.g. the classic "type Facebook into Google to get to Facebook") that it sticks. That's maybe the most compelling reason I've heard, but it is also somewhat unsatisfying as well (as well as precarious if the defaults ever change—but maybe that's true!).
  - tqi 3y ago
    > The argument I generally hear from certain microeconomists is that they still expect there to be value in niches, given Google's highly general nature. If you're looking for super specific topics, it often doesn't perform extremely well. You'd find it valuable to go to a resource tailored for your area. I think that is true, but only within a very narrow band of topics that are broad enough to require a search functionality (lexusnexus, webmd, arxiv, etc). I think most topic niches that I would be interested in are more often served by niche publications (ie I wouldn't need/want a search engine geared toward photography, I would mostly go to specific publications and sites that I trust).
paul7986 3y ago
Once Google became a verb well then ..that's when they won?
m_0x 3y ago
Because the phrase is "Just google it" not "Just search-engine it"
- esafak 3y ago
  Just search it.
fardo 3y ago
> Why is it actually winner-take-all? The power of defaults, mostly. The average user experience of picking up an internet-connected device has been very intentionally cultivated by Google. Whether you're in your browser or on your phone, Google's spent a lot of money building up Chrome as a browser ecosystem, Android on mobile, and paying off Apple on iPhones and competing browser vendors like Firefox, to guarantee that, whenever possible, Google is always the default search engine. The only non-Google default will typically be on Edge, which only has about 5-6% penetration. Since Google historically has always been the best search engine in the space, does not explicitly charge its users money, and (at least for average users) is really good at surfacing what they're looking for, most users feel no need to look elsewhere for a search engine because the default just works, switching would demand an effort, and Google is what they'd want anyways. The moat isn't big, but Google has put a ton of work into ensuing that any competing search engine requires an intentional and active choice of users to seek you out while they're worse. At least until the recent AI play by Bing, this tiny moat was always sufficient, because if you start from scratch on search, you're essentially guaranteed to be worse, and all other 'serious' offerings under the hood were weak alternatives: essentially one of "Bing search API wrappers" (worse results), "nation-state-actor search engines" (for most users, worse results), or "Google, but with some cursory privacy measures, a subscription fee, or filtration features" (which wasn't something most users care about). Recent chat AI represents a competing alternative to doing a search in the first place, which jeopardizes the "we have essentially all defaults and users can't be assed to switch to a worse search" barrier to entry that Google historically relies on, which is ringing alarm bells for them.

by j-wang 3y ago

JumpCrisscross 3y ago

> Why is it actually winner-take-all? Is search winner takes all? Or is it advertising?

j-wang 3y ago
That's an interesting question since advertising certainly follows search dominance, but it doesn't necessarily follow the other way around. Google figured out how to monetize its dominance with advertising before it had the behemoth ad platforms they have today. It's pretty much the same with the popular social networks. The answer (more logically) should kind of be neither. Advertising obviously has a lot of channels, and even though Google has both Adwords and its display advertising network, it doesn't follow those really need to be the same provider... at least outside of more data to do more targeted ads. But, again, advertising dollars will follow platforms that price for ROI. Better targeting mainly adds to the amount that Google and Facebook can charge for their ads and still have companies pay for them. It doesn't really add to their dominance directly (I say directly since, obviously, more money can buy more R&D/employees/regulatory capture/acquiring competitors/just-paying-for-dominance like with Google paying Apple. But that's all indirect).
esafak 3y ago
Nothing prevents users from switching search engines. I switched mine! Advertisers on the other hand want as many eyeballs that fit their target profile as possible.

tqi 3y ago

Agreed that it's not intuitive. My guess is that it's not a network effect in the traditional sense (where having more users makes the product more valuable), but rather that there is something about a product category being free that lends itself to being winner take all. Users are less motivated to comparison shop, and if any one company gets enough marketshare to be a default choice then maybe it just snowballs. Like if tissues were free, would Kleenex have a monopoly bc everyone just reaches for it by default?

j-wang 3y ago
Potentially—I suppose free can lead to more justifiable laziness in finding different resources for different things. The argument I generally hear from certain microeconomists is that they still expect there to be value in niches, given Google's highly general nature. If you're looking for super specific topics, it often doesn't perform extremely well. You'd find it valuable to go to a resource tailored for your area. Anecdotal, but I've personally found it to be true—for specific hobbies, or for more "real" reviews, I search reddit. Except I use Google to search reddit, since reddit's search sucks, but still. Amazon or Etsy or whatever can be considered "search engines" for highly specific topics (purchases, and purchases of a specific type of product) and they do have success there too, but Google is still often the front-page to get people to those sites. Maybe it's just that Google is just a default "front-page" and enough tech-non-savvy people just use it to get to where they want to go (e.g. the classic "type Facebook into Google to get to Facebook") that it sticks. That's maybe the most compelling reason I've heard, but it is also somewhat unsatisfying as well (as well as precarious if the defaults ever change—but maybe that's true!).
- tqi 3y ago
  > The argument I generally hear from certain microeconomists is that they still expect there to be value in niches, given Google's highly general nature. If you're looking for super specific topics, it often doesn't perform extremely well. You'd find it valuable to go to a resource tailored for your area. I think that is true, but only within a very narrow band of topics that are broad enough to require a search functionality (lexusnexus, webmd, arxiv, etc). I think most topic niches that I would be interested in are more often served by niche publications (ie I wouldn't need/want a search engine geared toward photography, I would mostly go to specific publications and sites that I trust).

paul7986 3y ago

Once Google became a verb well then ..that's when they won?

m_0x 3y ago

Because the phrase is "Just google it" not "Just search-engine it"

esafak 3y ago
Just search it.

fardo 3y ago

> Why is it actually winner-take-all? The power of defaults, mostly. The average user experience of picking up an internet-connected device has been very intentionally cultivated by Google. Whether you're in your browser or on your phone, Google's spent a lot of money building up Chrome as a browser ecosystem, Android on mobile, and paying off Apple on iPhones and competing browser vendors like Firefox, to guarantee that, whenever possible, Google is always the default search engine. The only non-Google default will typically be on Edge, which only has about 5-6% penetration. Since Google historically has always been the best search engine in the space, does not explicitly charge its users money, and (at least for average users) is really good at surfacing what they're looking for, most users feel no need to look elsewhere for a search engine because the default just works, switching would demand an effort, and Google is what they'd want anyways. The moat isn't big, but Google has put a ton of work into ensuing that any competing search engine requires an intentional and active choice of users to seek you out while they're worse. At least until the recent AI play by Bing, this tiny moat was always sufficient, because if you start from scratch on search, you're essentially guaranteed to be worse, and all other 'serious' offerings under the hood were weak alternatives: essentially one of "Bing search API wrappers" (worse results), "nation-state-actor search engines" (for most users, worse results), or "Google, but with some cursory privacy measures, a subscription fee, or filtration features" (which wasn't something most users care about). Recent chat AI represents a competing alternative to doing a search in the first place, which jeopardizes the "we have essentially all defaults and users can't be assed to switch to a worse search" barrier to entry that Google historically relies on, which is ringing alarm bells for them.