After the latest EMD update and Panda update and whatever other updates have been sneaked through recently, there’s been a few surprising murmurings from people who have allegedly had interviews with various people at Google.
And all of these murmurs have a bearing on the likely future of search, the future of Google, and of course your future too if you rely upon Google as your main source of income from online endeavours.
So it’s probably something you’ll be interested in hearing about.
Let me say though that this isn’t a dig at or an attack on Google, they are a business who have a legal obligation to their share holders, not to webmasters, and so while we may all have made hay while the sun shone, we have to remember that they don’t actually owe anyone a living – although that stance may backfire on them in due course, more later.
The most worrying thing, and the surprising statement that prompted this post (and I have to say that I cannot verify it as true I was not there when it was allegedly said, and the source is third hand from there, from a journalist who quoted a Google employee, who quoted Larry Page, the current CEO and one of the founders of Google).
And what he allegedly said was that he viewed “free clicks” (i.e. visitors from organic listings) as “theft” from Google (or is that lost revenue for Google?).
If this is true, and I emphasise the if part for legal worries (:)), then the inference is clear:
Google don’t like free clicks. And if Google don’t like free clicks, and remembering that they have a legal duty to work in the best interests of their shareholders, then that means surely that they want you to pay for every visitor, or click, that you get.
Ignoring any other external factors, dynamics, and mechanisms involving Human behavior, that kind of makes sense in terms of delivering shareholder value – Google already have the system in place (Adwords) where webmasters can bid to be ranked higher, and if everyone had to pay then it would surely boost their earnings.
And you can kind of see this taking shape over the last few years.
I’ve been online long enough to remember when there was no Adwords and all you got was natural results. Then Adwords appeared down the right hand side of results, then you occasionally got the odd result above the natural results, and now you have up to 3 paid results.
Then came Google Places putting companies (even those without a website) above others by virtue of their post code, and Google Images, and You Tube listings – I looked at a result yesterday and there were only 4 natural results on the 1st page rather than the customary 10.
And on mobile search you can end up with a whole page of ads.
If Google wanted to they could increase the number of ads etc on the front page/s and you’d see no natural results at all.
So is this where it’s going to end up? And why?
The first thing I have to say is that I’m surprised that the Governments of the world haven’t yet taxed the internet – imagine, something free that everyone uses – why it’s a veritable goldmine of taxation possibilities.
And I have thought that perhaps Google are getting in there first, rather than allowing governments to tax companies to appear online (which in essence means taxing them to appear on Google), why not do the charging yourself and pay tax on those earnings, rather than seeing all of the earnings go into the bottomless pits that are the coffers of the government.
If that was the case then it’d probably be cheaper than if the government got their hands on it.
Just look at the new tax laws the French and Germans are trying to pass to make Google pay for showing news sites online (surely if you want people to pay you don’t put it for free online, they’ll find their way there Google or no Google).
However, fantasy aside, you can see a clear business model and reasoning for taking this paid clicks approach.
If only it were so simple…
The problems can be seen clearly even quickly after Google has made numerous changes to “clean up” the internet. Many companies who relied upon natural listings have seen their websites vanish from the results, and you’d expect them to start paying to recover those lost sales.
But anyone who’s used Adwords will know just how disproportionately expensive it is.
In my own experience I’ve had the situation where as the only person using a particular keyword phrase (it’s a bidding system remember), the minimum bid amount has gone from around 8p to over £1 in a couple of months. Apart from the uncomfortable feeling that I must be bidding against Google themselves, the economic reality is that once you start to get to certain levels it is not economically sustainable or feasible to continue.
In other words, you end up paying so much for the ads that you lose money on your sales.
And so it perhaps isn’t surprising that Google have recently announced another drop in profits even though they must have had people clamoring to make up for lost sales since April when the first Google Panda Bombshell hit the decks of their search engine.
We’re in the middle of a recession, or maybe even a depression, and people don’t have money to spend, that includes both customers, companies, and webmasters.
Many companies are going online to try and recover lost high street sales.
For the webmasters & companies, if they were showing in the natural results and earning good money then they’d probably be happy to spend money on Adwords to boost sales, it’s the icing on the cake, but once the income is gone from natural results then you have to make every penny count, and the reality is that Adwords for many companies does not pay, it does not generate profit, it has a negative return on investment (ROI), or a very negligible one making the whole enterprise futile.
In my own experience I had 1 month where Adwords helped me turn over £6000 on 2 ebooks I’d written (ebooks have extremely high profit margins, mine were being sold for £29.99 for the 2) – the Adwords cost was around £4500.
So in other words, Google made 3 times more than I did from my hard work – and I can tell you that this breeds resentment. You can’t help it.
My ebooks had practically zero cost – how could a business selling a product with a 50% gross margin survive those costs?
And so the further down this route that Google might choose to go, the worse the situation will become. The only people with deep enough pockets will be the corporations, like when the supermarkets came to town and shut down all of the small local suppliers, and so rather than having more choice from the best results, you’ll end up with less choice from only the big major players.
It is inevitable if Google make this choice.
Some people might not see the problem, it is the searcher after all who is the customer of a search engine, not the webmaster, but is this really true?
The real customers of Google or anyone else are those who put their hands in their pockets and pay.
And if the cost of advertising is too high then the search engine will effectively put those businesses out of business. Which in turn diminishes their own income.
Because while Google may hold the whip hand now, once the competition is gone the major corporations will rape and pillage Google just like they would all of the small butchers, and bakers, and everyone else they consumed without remorse.
It seems that we may be heading for a sad state of affairs, where the internet, the great leveler allowing small businesses to compete with large ones becomes just another corporate showground, where the small business is hustled out of existence, and in terms of societal benefits if nothing else, not even considering the economic turmoil we find ourselves in, it will be a dark day if we end up at the end of this path.
Of course at this moment in time Google have control of possibly 90% of online search, but if they start to tinker with the equilibrium then they’ll simply open the door for their competitors who right now can’t find their way in, like Bing, and then they’ll see their market share diminish rapidly.
Like so many before them they seem to have lost the zeal to make their product or service (accessibility and usability of the internet) the best it can be and to create, and seem instead to have become another corporate clone, more interested in chasing the dollar than focusing on the experience of the user, or worse still their customers.
It always seems a flight of fancy to say that an entity as huge, powerful, and important as Google might be entering it’s end days, but if the path they’ve chosen is indeed the one they seem to be indicating, then they’ll learn the same hard lesson that many fallen giants before them have also had to endure – and that will be that by the time they realise they’re in trouble and try to back peddle, it’ll be too late.
Let’s hope they’re even smarter than we think they are.