The problem with Google’s feature creep

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As of today, Google has started showing credit card affiliate links in its (UK) search results. Do a search for ‘compare credit cards’ on Google and chances are you’ll see a box below the ads, and above the first organic result, with some credit card deals on which Google earns an affiliate commission:

Google Compare Credit Cards box

There are several other similar types of comparison ads active now. This is yet another example of Google injecting certain functionality directly in to its own search results that are basically copies of services offered by other websites. Some examples of recent times:

  • Local: Websites who offered maps and driving directions took a huge hit, as did local business directories, when Google Maps became the default option in search.
  • Travel: Travel comparison sites are bracing for more pain now that Google has implemented Flight Search, and is putting hotel booking forms straight in its SERPs.
  • Finance: Search for a stock ticker and Google will try to guide you to its own finance site. Also, in the USA users can compare mortgages using Google’s platforms and never need to visit mortgage comparison websites ever again.
  • Retail: Shopping comparison sites are dying because Google’s own shopping platform is taking over all the action.

All of this is, according to Google, intended to improve the user experience. The fact that Google makes truckloads of money off of these types of ‘improvements’, and in the process kills off entire businesses, is just collateral damage.

The problem is not so much with Google expanding in to other areas. A business like Google, so utterly dominant in search (especially in Europe, boasting market shares well in excess of 90% in many countries), needs to diversify its business if it intends to satisfy its shareholders’ demands for ever-growing profits.

The problem is that Google uses its monopoly in search (and I dare anyone to claim that a 90% marketshare is not a monopoly) to shoehorn its way in to other business models. Google is leveraging its search monopoly to give it a huge advantage in other areas of online business.

Some people say this is all perfectly fine. ‘It’s Google’s business’, they say, ‘and Google can do whatever they want’. And that is actually not true. Using a monopoly in one business to give yourself a competitive advantage in another is against the law.

There are many examples of antitrust lawsuits filed over exactly these types of practices – most memorably when Microsoft used its Windows monopoly to give its Internet Explorer browser a leg up – because in every single instance of monopoly abuse it’s been shown that competition is decreased, innovation is stifled, users are given less choices, and entire businesses go bust as a result.

So while at first glance all these improvements might look like they’re genuinely helpful for Google’s users, in the long term they are actually incredibly damaging and serve little purpose other than pad Google’s pockets even more.

We’d all do well to keep the Microsoft example in mind. Without that successful antitrust lawsuit in the 1990′s, we’d all be using Internet Explorer. Scary thought, isn’t it?

Comments

  1. By on

    The sad thing, is that unless the law gets involved and really starts prohibiting Google from doing these monopolistic actions, they’re going to keep doing it.

    Regardless of your niche/market, it’s extremely critical to spread your visibility to sites beyond Google. With Penguin/Panda and whatever clever names they come up with next, each update is a new opportunity to lose your shirt. Don’t let your business and livelihood be run by Google.

    Reply »

  2. By Terry Van Horne on

    Calling it an affiliate program is a huge stretch… CPA and CPConversion not likely Google would take that risk…but do have the data to do the calculation so…

    Are they are eating someone’s lunch…yes! But that’s not new if we are shedding tears because of disruptive technology… which is really the issue… Facebook/Social/Mobile could have the same potential. There is a long history of that on the net starting with the poor bastards in the travel agency biz who were pushed out by Expedia and crew who are now likely about to have their lunch nibbled by the Gorg who bought the booking engine for a huge % of travel bookings.

    It is progress and what capitalism is meant to do… reduce costs… in this case it is just a re-ditribution of wealth with likely the Big companies saving a few dollars and the public a few less. I know that isn’t likely popular in some places

    Reply »

  3. By on

    @Terry: oh it’s definitely an affiliate program: “Based on your search query, we think you are trying to find a credit card. Clicking in this box will show you credit card providers who can fulfill your request. We may be compensated when the user clicks to contact, fills out an application with, and/or receives a product from a product provider.”

    Also, this is not about disruptive technology at all. Financial comparison sites are not new by any stretch. Google is not innovating – it’s copying, and then leveraging search to achieve dominance. There’s nothing admirable about that. It’s not progress – it’s anathema to progress, as it’ll prevent genuine innovation from taking place.

    But yes you’re right, it is capitalism. Capitalism, when unchecked, inevitably leads to monopolies. And monopolies inevitably lead to bad service, bad value for money, and a stagnant marketplace. Which will prevent real disruptive technologies from ever flourishing.

    Reply »

  4. By on

    “The problem is that Google uses its monopoly in search (and I dare anyone to claim that a 90% marketshare…” – 90% market share, where did you find that figure?

    Reply »

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