Perverse Economics of Google?

Does Google’s very economic model cause it to violate its principle to “do no evil?”

In all fairness, the same question could be asked of all automated ad distribution networks, not just Google’s Adwords program.

Looking at how the ad networks work, it seems that the more content there is on a subject (that is, the more popular or broad a keyword is), the more competition there will be for producers of that content to get noticed.

Therefore, producers will bid-up the price of an ad on that keyword. Is this the most efficient way for searchers to find relevant results?

One thing, this potential inefficiency in search relevancy has created an entire industry of search engine optimization specialists. These are people paid to understand the functioning of search algorithms for clients. It has also created an industry of link farms and black-box tactitians who exploit the gaps in the search algorithms.

(Note, this does depend on the assumption that many of the content producers are also vendors or sellers of goods or services within that broad category.)

One would think that the more content there is, the more need there is for the search engine itself to do a better job at sorting the data.

But, if the end result of this inefficiency is more revenue per click for Google, Yahoo, MSN or the owners of other ad distribution networks, do they have any incentive to improve the quality of their search, to do a better job?

Or, are they incentived to hold-back innovation and profit off the status quo?

p.s. For those with a long memory, this reminds of an observation by Jeremy Allaire, founder of ColdFusion, years ago, on why the browser stopped going forward once Internet Explorer became dominant.

          

This entry was posted on Wednesday, September 27th, 2006 at 9:02 am and is filed under Google, SEO & Collaborative New Media, Software and Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.