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3 Things that Endanger Google's Core Search Business

How does J.C. Penney (JCP) get to the top of Google (GOOG) search? Hint: the answer has nothing to do with practice and Carnegie Hall.

No, the company had taken top Google positions in one category after another by gaming the search giant. The New York Times had a search engine optimization (SEO) consultant do a study. Penney had an incredibly "ambitious" plan of planting links on thousands of sites, many of which had no relation to the product categories in question.

Google has taken punitive action against Penney, but the incident raises yet another question about the quality of Google's search results. On at least three fronts, the company's most fundamental business faces significant challenges.

1. Big commercial spamming
Penney was an example of the length to which companies will go to get to the top of Google. The reason is simple: traffic and income. Most consumers won't go through one page after another of Google results. With no end of page links in site, it becomes a waste of time and an overwhelming experience.

Of course, the whole Carl Sagan-like "billions and billions" of pages waiting for you is hype. People want the right results. The marketing psychology is that with so much information, you're bound to find the best. However, when the results are gamed, the results are less than satisfying. That might be one reason Microsoft (MSFT) Bing appears to get users to the information they want a higher percentage of the time than Google.

Small companies try to game results do it and get crunched. When big ones do, does Google fear the loss of ad revenue? Google's antispam head, Matt Cutts, gives a "categorical denial" that the company would ever allow a breach of the wall between the business considerations and search. That sounds like protestations of media about the wall separating advertising and content. Sometimes that may have been true, but often not.

But when you see it happen once, you have to wonder if it keeps happening. A Google search on "designer shoes" today yielded the following results (listed with estimates of monthly unique U.S. visitors):

  1. -- 1.8 million
  2. -- 23,900
  3. -- 13,500
  4. -- 816,100
  5. -- 28,631
  6. -- 5.2 million
  7. -- 7.3 million
  8. -- 743,000
  9. -- (no info on either Compete or Quantcast)
  10. -- 1,100
No, numbers like 1,100 aren't a mistake. These are the literal traffic estimates for these shopping sites. You'd think that the most popular outlets like Zappos would get a higher rating. One site pushed to the second page is (19 million). Amazon didn't appear until page 3. Do the sites with tiny traffic really have that much better content? That many more legitimate links back from other sites? Are they really that much more relevant to a search?

Is so-called black-hat search engine optimization really that rare on Google?

2. Horizontal strategy
Google has built its business on horizontal search: a wide focus on everything. But that leads to the problem of too much material to sort through. Jeffrey Rayport, chairman of digital strategy consultancy Marketspace argues that the future of search may be vertical, and not horizontal.

There are already examples. People looking for a book are probably more likely to go to Amazon or Barnes & Noble (BKS) than Google. If you want to take a trip, you might check Orbitz (OWW) or Travelocity. Google already seems aware of the problem, which is why it now has its own online bookstore and is trying to acquire travel data company ITA. But the thought of pursuing one vertical after another sounds so ... Yahoo-like. Although all finding vertical information is ultimately search, you could as easily argue that selling shoes, cars, food, and eyewear is all retail, so why not go into each of them.

3. Content pollution
The gaming by commercial interests is similar to the criticisms of content mills that rely on automated analysis of Google search patterns and creation of a mind-numbing volume of content. You might even have seen the humorous spam clock from the new search engine, Blekko:

Some, like Matthew Ingram on GigaOM say that Google and content mills are headed for a showdown. There was even speculation that Demand Media (DMD) would be first up.

Except that Demand CEO Richard Rosenblatt has insisted that the two companies have a strong partnership. Why? Demand is the largest supplier of video to YouTube and has an ongoing working relationship with Google.

Here's a question: How much of Google's revenue depends on companies gaming results? There's no way to know from the outside, but when the vast majority of its undiversified revenue continues to come from ads, and mostly search ads, the inclination may be to leave things as they have been.

All three trends make Google more vulnerable to competition, both companies like Microsoft, whose Bing slowly but surely continues to erode Google's market share, vertical information suppliers, and even social networks, which provide additional ways for people to ask questions and get answers.


Image: Flickr user allspice1, CC 2.0.
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