Analyst: Google is Hijacking Affiliates' Revenue

Google's search-within-search feature has stirred a furor among publishers, retailers and, now, analysts.

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."