Analyst: Google is Hijacking Affiliates' Revenue

 
 
By Clint Boulton  |  Posted 2008-03-26
 
 
 

Analyst: Google is Hijacking Affiliates' Revenue


Bloggers were torn about whether Google's search-within-search box was harming publishers and retailers, as was suggested in this March 24 New York Times piece.

A search expert believes the tool, a secondary search box that lets consumers conduct searches within specific sites without navigating to those sites, will help Google "hijack" revenue from Web site affiliates. The new search feature, launched in beta March, is currently being tested on sites for NASA, Target, Forbes, Best Buy and Wikipedia, among others.

IDC analyst Sue Feldman said in an opinion piece that search-within-search is more of a threat than is at first apparent because it keeps searchers on Google, where they are likely to click on ads served by Google, instead of ads served by affiliates of destination sites.

Typically, searchers enter a destination name into a Google search box (where they are exposed to ads) and then click on the desired destination link, Feldman noted. The searcher may then be exposed to ads on the destination site, which may be served by the original search engine or sold directly by the site to affiliated advertisers.

Ads served by Google get about a quarter of the revenue, while the rest of the revenue goes to the affiliate in exchange for being able to use that site as an advertising venue.

But Feldman said if Google keeps the user on its site, it hoards the ad revenue for itself, and may also show ads promoting competitors of the destination site for which the user is searching, which was one of the gripes in the Times article.

"That hijacks the revenue for the destination site in two ways, by sending the searcher to another site, and by not sharing ad revenue with the affiliate," Feldman wrote.

When asked about this issue, a Google spokesperson told eWEEK the company's goal is to provide the best user experience, noting that ads related to searches from competing providers are useful to consumers. If a site owner wants to present sponsored listings for these searches, then that site owner can participate in the AdWords auction, the spokesperson added.

The spokesperson also said sites may opt out of the service, noting that Google has honored such requests from a couple of companies. However, because this feature is new, "we are still gathering feedback so it has not been determined whether companies that opt-out of the service will be able to reverse their decision."

Experts disagree on search-within-search


As in the blogosphere, search engine experts are torn about the search-within-search feature's effect on the search industry. Jerome Pesenti, chief scientist of enterprise search provider Vivisimo, said he sees the feature as inspiring fair competition.

"Why wouldn't Google be allowed to provide an extra service 'for free'? End users still have the choice," Pesenti told eWEEK. "As with all competition, it will put the pressure on the publisher to improve their own site search. Some of them may drop off the game while other may choose to get serious about it and add a search that can be better than Google."

However, he added that if Google wanted to really play fair, it would give the option to the publishers to put their own search box in the search results.

Steve Papa, CEO of enterprise search provider Endeca, said retailers have invested millions in search and information access technology to create a differentiated customer experience.

"Google's latest foray is the equivalent of browsing the aisles of Circuit City and being greeted by a Best Buy salesperson," Papa told eWEEK. "It's no wonder why retailers are having an adverse reaction to what is, in essence, a move by Google to hijack their customers."

Feldman meanwhile said Google's search-within-search tool actually creates a search problem. She said some retail sites take great pains to optimize results for their traffic, by getting customers to products in the fewest number of clicks.

Search-within-search nullifies these efforts, she argued.

She also suggested that Google created search-within-search to counter the flattening of search revenue.

"The salvation for Web search revenue, in the long run, is to nurture and cultivate affiliate sites," she wrote, noting that Google rivals such as Yahoo, Microsoft and AOL should seize on the fear instilled by the search-within-search feature to target affiliates.

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