Google Search Isn’t Really About Search Anymore … Surprised?
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Google (NASDAQ: GOOG) made its name in the realm of internet search more than 15 years ago and became so well known for it that the company's name has now become a verb in the English language. We have all heard "I Googled you."
Ad-blocking’s selective ineffectiveness
Surely, we have all noticed that Google has continued to dominate search, but it also has developed a massive monetization strategy for search that generates billions of dollars a year in revenue for the company. But, have you noticed that advertising seems to be very prominent on search results pages? And have you noticed recently that certain ads seem to always show up even if you use your ad-blocking software?
You might have guessed that Google is behind all of that, which seems to turn its once-reliable search feature into a massive advertising billboard. Search seems to not be about search anymore, according to some recent stories that crossed our desk on Monday, July 8.
Aaron Harris of startup Tutorspree did some research recently that measured the amount of "real estate" that Google dedicates to organic search results on its search pages, because apparently he was very much aware of the seeming pervasiveness of ads on Google Search pages.
And what he found out on one hand might be surprising, but on the other, it might just be the sign of the times. Harris broke down the size of the screen on a 13-inch MacBook Air computer and looked at how much space the organic search results took up on the first page of a sample query of "auto mechanic."
He found that only 13% of the screen space had organic results -- the rest of the page was taken up by various forms of advertising or white space. And even then, the organic results showed up on the bottom left of the screen, even with or below most of the advertising related to that search term.
What about mobile and “whitelisting?”
If you think that is all, just wait until you try Google on mobile, Harris said. As an example, he typed in "Italian food" as a search term, and the New York City-localized organic results did not show up on his smartphone screen until he scrolled down four times. Is that something that surprises you? What about the idea that Google pays to gets its ads seen by as many browsers as possible?
Well yeah, there is that. Google also reportedly is one of the companies that "whitelists" its ads on AdBlocker Plus, the popular ad-blocking software that is an extension onto most popular browsers.
Eyeo, the company that developed AdBlocker Plus, admitted on its FAQ page that it does allow for whitelisting of some ads -- which means that the extension will "approve" certain ads to be seen, or ads featured on certain sites, with many of the "larger properties" paying for the work it takes to ensure those ads get seen. The "whitelisting" feature is available for free to many smaller companies and blog sites, the FAQ states.
Still, it’s not fair to just single out Google here. Yes, they’re the subject of Microsoft's (NASDAQ: MSFT) much-publicized “Scroogled” campaign, but it’s worth noting that both Microsoft and Yahoo! (NASDAQ: YHOO) were called out by the FTC in late June, citing that “background shading for search ads that appear alongside natural search results was not always sufficiently visible.” The agency did not specify if certain search engines were worse in this regard than others.
This comes on the heels of the latest search engine market share data from comScore, which indicates that Microsoft’s Bing is now in second place by a significant margin, holding 17.4% of all activity. Google maintains a 66.7% share of the search engine market, and Yahoo! comes in third with an 11.9% share.
For those interested in making a play on the search engine space, Google obviously has to be a part of your hypothetical portfolio, but we’d make a case for Microsoft as well. The company could make a move for either Zynga or Nokia in the coming year or two, and at 11.2 times forward earnings, it’s more attractively priced than Yahoo! (16.5x) or Google (16.9x). Bing’s rising share in the search engine market should not be overlooked either, so we’ll keep a close eye on the tech giant.
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This article is written by David Woodburn and edited by Jake Mann. Insider Monkey's Editor-in-Chief is Meena Krishnamsetty. Meena has long positions in Google and Microsoft. The Motley Fool recommends Google. The Motley Fool owns shares of Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!