eBay Experiment Demonstrates Frailty Of Google's Monopoly

from the switch dept

Thu, Jun 14th 2007 12:55pm — Joseph Weisenthal

For the past several days, Larry Dignan has been seeing what it's like to live without Google. Each day, he's been trying different, lesser-known search engines to see how they stack up. As he points out, this is essentially what eBay decided to do when it announced that it would cease Adwords spending on Google in the US market, at least for the time being. While the move may have been linked to Google's planned "protest" at an eBay conference (it's now been canceled), it should still be an interesting and worthwhile experiment for eBay to see what life without Google is like. At the moment, analysts expect eBay to take some sort of business hit, although it's not clear how big it will prove to be. If it's too big, you can expect eBay to quietly scurry back to Google. That being said, both Dignan's and eBay's experiment demonstrate something important about Google's competitive standing. As powerful as it is, there's still very little lock in. If an individual or company wants to stop doing business with Google this very instant, they can. People stick with Google, not because it's hard to switch away, but because they don't see any better alternatives. Compare this to Microsoft during its heyday (or even now). It would be virtually impossible for a business that ran Windows to try going without Microsoft for a week or a quarter, just as a business experiment. This means that even when there are superior alternatives to Microsoft products, it's hard to get people to switch to them -- a fact that has underpinned many of the legal challenges against the company. These Google-free experiments should hearten anyone that fears the company's power or thinks we've just traded one monopoly for another. When a superior alternative does arise, it won't be hard for anyone to switch.

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23 Comments

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Manthem, 14 Jun 2007 @ 1:45pm

Google Auctions?
It would be amazing to see Google answer back by launching a Google Auction type application fully integrated with Google Checkout. I know I'm just grasping at straws, but it would interesting to watch.
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Ed, 14 Jun 2007 @ 2:17pm

doesn't make much sense to me
So one company among many thousands pulls their ads (even if they're a big advertiser), and that shows the weakness of Google? That sounds pretty stupid to me. Like if I stopped buying gas (I drive a lot) then I'd be showing the weakness of the gas industry. Hmmm...
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Paul, 14 Jun 2007 @ 2:31pm

As the saying goes...
On the web your competitors are only a click away so you better do everything you can to retain your customers. That's as true for a search engine as it is for an e-commerce shop. I think Google has enough smarts to realize that and never sit on their laurels or past success.
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Snapper Cridge, 14 Jun 2007 @ 2:34pm

Whatever!
--"When a superior alternative does arise, it won't be hard for anyone to switch."--

...And then we will watch this new "superior alternative" flourish and grow only for the peons to start calling it a monopoly and begin bad mouthing it like they do everything else (Microsoft, Google, Wal-Mart, etc.) that's useful to us regular folk.
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Anonymous Coward, 14 Jun 2007 @ 2:36pm

Perhaps, but remember Yahoo tried their own aution site. Which was launched when Yahoo still had a large market share (perhaps even on par or better, at the time, with Google) Yahoo site failed. http://auctions.yahoo.com/
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Jay Nicholson, 14 Jun 2007 @ 2:38pm

Re: doesn't make much sense to me
It's not stupid - it's a valid point that IF another company could create a better version of what google has built - it would not be IMPOSSIBLE to have the client base move to that company.

The word weakness may not be the correct term to use - but the article above makes it valid that google services being web-based for the most part allow for the possibility of competition where as microsoft has a very solid maniacal around it's business base - nearly preventing any user switch over regardless of what and how MS decides to conduct it's business.
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dave, 14 Jun 2007 @ 2:40pm

Makes sense
The gas analogy is a bit off.. it's more like you choice to stop buying gas at one brand of station. The street corners are littered with alternitives, just as the internet is littered with search engines.. You can shop any of them, at any time. But you stick with the one that gives you the best services, and conveniences.

Microsoft is more like the local cable company.. You only really have one choice.
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Noah, 14 Jun 2007 @ 2:51pm

Re: doesn't make much sense to me
It would be more like a large trucking corporation decided to stop buying Exxon gas. It doesn't show the weakness of the gas industry, but shows the lack of lock-in that Google has. Which is the weakness the article points out.
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Anonymous Coward, 14 Jun 2007 @ 2:51pm

Re: doesn't make much sense to me
"So one company among many thousands pulls their ads (even if they're a big advertiser), and that shows the weakness of Google? That sounds pretty stupid to me. Like if I stopped buying gas (I drive a lot) then I'd be showing the weakness of the gas industry. Hmmm..."

the reason you dont "get it" is because your analogy is flawed.

eBay has consistently been one of the _biggest_ advertisers on Google. In fact, there were rumors that key reason that eBay bought Shopping.com was because Shopping.com's AdWords bids kept pushing eBay's AdWords bids higher. By taking out Shopping.com, eBay would then be able to spend a lot less money on Google ads.

http://techdirt.com/articles/20070613/140050.shtml
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Matt, 14 Jun 2007 @ 3:58pm

Wow! You've discovered the free market economy!
So you are saying that people use Google primarily because it's the best product available?

That shouldn't be such a revelation. That's the foundation of a free market economy, and the basis of our economic system!

You use Microsoft as an example claiming that they have a lock even where better products exist. This is partially flawed. While Microsoft certainly has an unfair (and very unique) advantage in the OS market, I contend that in the vast majority of product categories Microsoft makes (get the flame throwers ready) the easiest to learn, implement, and administer products (This comes from a guy with an apache/Debian web server and a half built MythTV box sitting in my office).

While MS products might not be, overall, the most flexible, or open source. They are, for the most part, light years ahead of open source products in terms of usability.

Ease of use is at the top of the list for most end users.

I contend that if a company, like Google, that most people have a high amount of trust in, were to come out with an easy to use product that competed with MS, they would have a very real chance of competing in the market place. (see Picasa, Google Earth, Firefox(although google was late to get on the bandwagon))

This is not a revelation, just capitalism and the free market at work.
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Charles Griswold, 14 Jun 2007 @ 4:03pm

Re: doesn't make much sense to me
Like if I stopped buying gas (I drive a lot) then I'd be showing the weakness of the gas industry.
That's a pretty poor comparison. It would be more like if you stopped buying gas at Shell and started buying gas at Texaco instead.

The entire gas industry does not consist of Shell in the same way that entire search engine industry does not consist of Google.
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Charles Griswold, 14 Jun 2007 @ 4:08pm

Re: Whatever!
...And then we will watch this new "superior alternative" flourish and grow only for the peons to start calling it a monopoly and begin bad mouthing it like they do everything else (Microsoft, Google, Wal-Mart, etc.) that's useful to us regular folk.
Don't like Google? Use Yahoo. Don't like Wal-Mart? Shop at K-Mart. Don't like Microsoft? Tough. It's not like you can get Windows from anyone else, is it?

Well sure, there's ReactOS, but it's not exactly ready for prime time.
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andy, 14 Jun 2007 @ 4:09pm

Re: Re: doesn't make much sense to me
addendum:

so it's not only google losing out on ebay's money, it's google getting less money from ebay competitors who don't have adwords auctions jacked up quite so high. i bet it's an interesting ripple for google to watch.
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AMP, 14 Jun 2007 @ 4:09pm

Re: doesn't make much sense to me
That is not at all what he said. You missed the point entirely.
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yossi, 14 Jun 2007 @ 4:18pm

ebay ads suck
am i the only one who realizes that ebay's ads are just "whatever you searched for, try it at ebay". this is bull crap; any moron can see that. so whats the big deal if ebay finally figured that out too.
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ChronoFish, 14 Jun 2007 @ 5:08pm

Doesn't matter what the end results are....
Google obviously is the de-facto search engine, and so it is doubtful that this act scares them.

What should scare them is what US West (aka Quest) learned 20 years ago. "20% of their customers would leave simply if they had a choice". This is not from dissatisfaction, or issues with the company. That many would be willing to leave "just cause".

In Google's World, they are very much like MS. Customers have had a choice to stay or leave since their inception. Yet there hasn't been any "real" choice (in terms of a desktop replacement OS). MS is however just now realizing how fragile their Monopoly is. With Linux popularity growing, Ubuntu putting on a tremendous show for a Linux Desktop, Apple just inches away from making their OSX wintel compatible, and the threat of Web Apps becoming very real - MS is realizing that locked in customers have no loyalty.

Google has enjoyed tremendous user loyalty from the start - partially because they were the little guy, and continued to be perceived as the little guy even after they were a multi-billion dollar company.

But the Google that was is not the Google that is. The two companies are vastly different and the "Do No Evil" company is now driven by profit and market control. (Google Marketing is broken down into small 12 person work-groups and each group is expected to bring in more money than most small companies dream of).

There are options to the Google search engine in the same way that there were options to Microsoft Windows XP in 2000 - they existed but they weren't desirable.

Google should hear the cry and put some brain power into solving the problem. It is true that they won't be all things to all people. But it is also true that they are not likely to gain much market share because they already dominate it so much. They only have one way to go grow - down.

The best they can be hopeful for is that the market itself continues to grow - which lucky for them is growing faster than projected.

-CF
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Paco Robles, 14 Jun 2007 @ 5:14pm

Re: Google Auctions?
I personally am all for "gBay" I just wonder if it could really work?
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Anonymous Coward, 14 Jun 2007 @ 5:40pm

I have done some searches on Google that were about illegal things for research and had eBay ads pop up suggesting eBay would be a good place to get said illegal thing.
It's something I have always found pretty amusing.
I think it goes to show that perhaps the way eBay did it's ad buy were not very efficient in terms of cash/benefit.
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Anonymous Coward, 14 Jun 2007 @ 6:05pm

Why does everything have to be about Microsoft? Can't it be that Google is not the monstor they think they are. This should show investors how tenuous a position they are in. It has nothing to do with Microsoft, which, btw, was not the first Evil Empire - do you know how to spell IBM? Hello 20-40 years in the drivers seat before Redmond came along, MSFT has had 20+ years of the drivers seat, but they are definatly not in the same power position they were in 10 years ago. Vome, pick a new favorite to cite in all your posts.
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Anonymous Coward, 14 Jun 2007 @ 6:06pm

Re: doesn't make much sense to me
No, but if Fed Ex or UPS stopped then...
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Snapper Cridge, 14 Jun 2007 @ 8:33pm

Re: Re: Whatever!
This is another flawed analogy. Don't like Microsoft?, Should be don't like Windows? Use Mac OS. Whoever said you HAD to use windows??
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Charles Griswold, 15 Jun 2007 @ 1:46am

Re: Re: Re: Whatever!
This is another flawed analogy. Don't like Microsoft?, Should be don't like Windows? Use Mac OS. Whoever said you HAD to use windows??
It's what I have to deal with at work. My personal computer has Linux installed.
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Dan, 15 Jun 2007 @ 10:57am

I'm not so sure that it would be as easy to switch from using Google services as the article makes it sound. Sure, it's simple to switch from Google search to Yahoo Search, but it isn't nearly as simple to switch from google mail to yahoo mail, or google documents to [insert other software, web or not], or even google desktop search to something else.

It all has to do with a loss of data and switching from a known interface, to an unknown interface. Bussinesses cannot switch from Windows to Linux (or even Linux to Windows) because of a loss of productivity and data, the same reason that it would be difficult for a person to switch from gmail to yahoo mail. Even this is rather simplified.

Comparing operating systems to a search engine and how easy it is to switch products doesn't make much sense.
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