Donna Bogatin
“Digital Markets” blogger at ZDNet; founder of VIPOffers.com and UrbanSavings.com
Danny Sullivan
Editor-in-chief of SearchEngineLand.com; Internet-search market analyst for 11 years
Resolved: Google is overrated.
Bogatin: By its own acknowledgment,
Sullivan: I suppose TV stations aren’t “well rounded” if they only broadcast TV. Relying on one product is fine if it grows and has limited competition. Search is growing, moving into devices like phones and PVRs. Google is a “search utility company” providing search services. And it’s hard to compete against; just ask
Bogatin: Google touts its PageRank software as “democratic,” retrieving the most “relevant” information on the Web. But search advertisers are put in Google’s “black box,” with AdWords auctions prompting them to bid up their own ad rates. Google grows its profit margins, and its market cap, at the expense of customers. Advertisers will not stay blinded indefinitely– and users will seek more comprehensive search results elsewhere.
Sullivan: But other search engines share similar weaknesses. The proof is in the results. Google’s are as good or better than the competition’s. If the results are good enough–and they are–people won’t seek alternatives. Beyond results, they trust Google and won’t seek out “stranger” competitors easily. Black-box pricing is disturbing. But oversized profit margins? Search-ad ROI is far above other forms of advertising. Search marketers aren’t fools. They won’t buy what they can’t afford.
Bogatin: Google is fueled by an unsustainable business model: the selling of ads against content it doesn’t own. Millions of businesses and individuals “voluntarily” fork over proprietary content and personal data to Google every day, selling themselves and their assets short–while Google’s market cap balloons. Google’s free ride is being challenged by content owners around the world. And corporate AdWords customers are challenging Google’s dominion over their own properties. If “search marketers aren’t fools,” then Google’s growth is destined to slow.
Sullivan: Google’s “free ride”? Flip it around. Google is the lifeblood of many sites, sending them huge amounts of traffic at no cost. A minuscule number of content owners are seriously challenging Google. The vast majority are part of the Google ecosystem.
If you rent land to a billboard company, is that company exploiting “content” it doesn’t own? There’s a partnership that both sides earn from. Google is an Internet billboard company, and an efficient one. The real worry isn’t that content owners will burn their billboards in protest. Rather, they may seek other companies willing to pay more. That could slow profits. But I still expect Google to find plenty of companies to rent it space. And that’s very sustainable.