This seems like a totally bizarre stance from the EU’s Competition Commissioner in response to Google’s proposed remedy to its alleged abuse of its dominant market position. Google is reported to have offered an auction to fill the Shopping slot it previously occupied exclusively, and Margrethe Vestager says her office won’t approve the remedy as such, but will wait to see whether it works in the market. That’s enormously unfair as an approach because it means Google could act in good faith, believing it’s proposed an adequate remedy, only to find out much later than it hasn’t and is subject to back-dated fines. Given that the European Commission found that Google violated its rules, it should surely also be the arbiter of whether the proposed remedy fixed things or not. And allowing the comparison shopping services that prompted the investigation in the first place to be the judges instead seems particularly unreasonable given that they have a vested interest in continuing to extract concessions from Google. I said when the proposed remedy was reported last week that I thought it unlikely to be sufficient, but to leave Google in legal limbo on this point just isn’t reasonable. It gives the impression that the EU has an axe to grind with Google and wants it to suffer rather than simply providing the legal clarity it should be entitled to.
Bing Adds Fact Check Summaries to News Search Results (Sep 18, 2017)
This article is a bit of an oddity – the Wall Street Journal reporting on the Wall Street Journal – but the news itself is important: Google is relaxing the policy that currently penalizes sites like the Journal which no longer allow Google searchers to view an article linked from search results for free. Since the Journal instituted that change, it’s seen traffic from Google (which in turn is likely a big chunk of total traffic) drop enormously, because sites that don’t participate in Google’s “first click free” program are penalized in search results. This is yet another sign of a softening at Google towards news organizations, which have been increasingly critical of its (and Facebook’s) power over them, though Google still seems to be months if not a year behind Facebook in coming around and making serious concessions.
Baidu Q2 Results Rebound Significantly From Recent Weakness (Jul 28, 2017)
Microsoft is adding some clever AI-powered image recognition, search, and automation features to the latest version of its Windows Photos app. It doesn’t sound like there’s anything here that will exceed the functionality of existing apps from Google or Apple, but just achieving parity would be a big step forward for Microsoft, which has always been bafflingly slow in addressing people’s needs to manage their photo libraries. Given how many people must store their photos on Windows computers, this is something Microsoft should have addressed long ago. Nokia was another company that always emphasized photography and yet never gave people a great way to manage the pictures they took on their phones, so the fact that Microsoft didn’t jump on the opportunity when it acquired the devices business from Nokia was another odd omission. At any rate, Microsoft now seems to be taking some of these advanced consumer features more seriously, as evidenced by the fantastic video creation tools in the forthcoming version of Windows, and these Photos changes are another positive move in this direction. This is low-hanging fruit as Microsoft looks to burnish its consumer and creativity credentials.
A study from Oxford University suggests that people who read news articles they find through search engines or social media have much poorer recall of the names of the publications than those who visit those sites directly. Those finding articles through search recalled the names correctly 37% of the time two days later, while those going through social channels recalled 47% correctly, compared with 81% for direct visitors. That’s entirely what I would expect anecdotally, but it’s still stark, and a good indicator of why news organizations seem so unhappy with the role of companies like Google and Facebook even though they seem little pacified by those companies’ efforts to better meet their needs. At root, this isn’t just a monetization or traffic problem but a fundamental disintermediation of the relationship between these publications and their audiences, which causes much lower brand recall and loyalty and removes much of the power to drive traffic from the publications themselves. That’s pretty much impossible to fix, and that’s a challenge both for news publishers and for the platforms, which would like to smooth things over with them but are relatively powerless to do so without big changes in the way they operate. However, the details of the study are well worth reading too – the differences aren’t consistent across publications, suggesting that at least some have broken through the challenges of aggregation and established distinctive enough brands for themselves to achieve recall anyway, so there is at least some hope. The whole article here is well worth a read.
Google announced its Jobs search vertical last month at its I/O developer conference, but it’s now actually launched the feature live for users (this is a good example of how launch announcements are often vague or completely silent on the point of timing, and it’s always worth checking that detail). The search feature works pretty much as you would imagine, for now at least merely aggregating search listings on existing big job search sites, though there’s no guarantee Google won’t eventually seek to disintermediate the legacy players and do more of the heavy lifting itself. After all, if users are already coming to Google for search results, why not encourage employers to list directly on Google over time? It’s also worth noting that Google has been reported to be working on a recruitment service for companies, for now decoupled from the Google search engine, but clearly a potential fit with it in time.
Alphabet was the third of the big three tech companies to report earnings today, and one of two (along with Amazon) which saw a very favorable response from the market to better than expected results. Its growth was strong once again off the back of ongoing positive ad revenue trends and a second straight quarter of strong growth in Other revenue in the Google segment, which includes its hardware sales. However, whereas Q4 saw something like $600-700 million in hardware sales, Q1 saw a much smaller bump from hardware – likely around $300 million. Other Bets revenue – mostly from Nest, Fiber, and Verily – continued to grow rapidly (47% year on year) though losses also grew. Google’s traffic acquisition costs continue to rise fairly rapidly due to the increased payments Google has to make for mobile search traffic acquisition (notably on the iPhone) – it rose from 8.5% of revenue from Google’s own sites to 10.4% in one year. Meanwhile, clicks or their equivalents on ads on Google’s own sites continue to rise rapidly, while the cost-per-click continues to fall due to the rise of mobile and video advertising. So far, the former is more than offsetting the latter, and there’s no indication just yet that there’s an end in sight. But Google’s own sites now contribute over 80% of total ad revenue, while third party websites running Google ads are down below 20% and the gap between the two continues to widen as Google continues to be far more successful driving growth on its own sites. That’s a reflection both of a deliberate strategy – Google’s margins on its own sites are much higher – but also of the broader trend away from traditional desktop display ads and towards mobile, search, and native advertising.
★ Google Makes Tweaks to Search to Combat Fake News (Apr 25, 2017)
Google Crushes Site Traffic By Scraping Content (Apr 18, 2017)
Google Forced to Unbundle Services from Android and Open to Search Competitors in Russia (Apr 17, 2017)
The EU is currently taking action against Google over what it sees as anticompetitive practices including bundling of its own services and blocking competing ones from being pre-installed in Android. As such, this Russian case takes on more importance than it might otherwise have, because it presents one possible outcome of the EU case, which is forcing Google to unbundle its own services from Android and allow competing search engines like Yandex to be pre-installed. That’s certainly a possibility in the EU case too, and would mirror the action taken years ago against Microsoft over browsers in Windows. If that were to happen, I’m skeptical many people (or OEMs) would choose alternative search engines on an Android phone, but it would potentially threaten Google’s Android business model, which is entirely about the apps and services it runs on the device (and the advertising they enable). For what it’s worth, as I wrote in this piece at the time the EU action was announced, I still think it’s misguided.
Google Turns Image Search into an E-Commerce Funnel (Apr 13, 2017)
Google’s search advertising business is increasingly under threat from other sites pre-empting Google searches with their own search functions in specific areas, among them Amazon in e-commerce and Pinterest in fashion and other categories. As such, Google recently beefed up its image search function to serve up related results from its Shopping feature, and now also shows related images which show fashion products in use alongside other clothing or accessories. All of this is algorithmically generated without human curation, and leans on Google’s AI and machine learning technology. Google is going to have to get better and better at serving up results in these various categories if it’s to fend off the threat from the specialists, but if starting elsewhere has already become a habit for some users, they’ll never even see these Google advances.
This is the second fake news-combatting announcement this week, after Facebook’s announcement about teaching users how to spot fake news yesterday. This is one of the broadest and most direct steps Google has taken in this area, and will specifically flag particular news articles or other sites with an additional link to a fact checking site such as Snopes or PolitiFact with a brief summary of who is making a claim and whether those sites consider it to be true. This is somewhat similar to Facebook’s effort to flag fake news, but the big difference is that it will be done algorithmically through special markup those sites will use, which will be picked by Google’s crawlers. That should mean that at least in some cases Google will flag something as false long before Facebook will, and I’d hope that Facebook would move to do something similar over time too.
This is a fascinating piece, and well worth a read if you’re interested in the Chinese tech market. It’s a market I follow less closely, but I was struck by Baidu’s recent decline in fortunes and Alibaba’s rapid rise in the ad business when I was doing research for a recent piece on global ad revenue leaders. Baidu has always been referred to as the Chinese Google, and although that’s a horrible oversimplification, it’s hard to avoid the sense in reading this article that part of its trouble stems from pursuing many of the same areas and strategies as Google but with less success. Even the resentment among the successful search advertising employees of higher profile but non revenue generating businesses is reminiscent of the situation at Alphabet, though the latter has been reining in some of its excesses lately. Even outside the Chinese, context, though, this is a good cautionary tale on how quickly seemingly indomitable Internet companies can see their fortunes turn south.
via The Information
Human curation feels like an interesting way to solve a problem with an algorithm, and it’s striking that Google pays 10,000 people to check its search results for quality in the first place. As I’ve said previously, the specific problem with “snippets” in search is better solved by eliminating them for obscure or poorly covered topics, but the issue with false results is certainly broader than just snippets. It sounds like this approach is helping, but it doesn’t feel very scalable.
via USA Today
This is the second of two fake news stories this morning (the first concerned Facebook), and this one doesn’t look so good for Google. Google has long pull excerpts out of search results in order to provide what it deems to be the answers to questions, as a way to get people to what they’re looking for faster. For undisputed facts, like what time the Super Bowl starts or how old a movie star is, that’s very useful and unobjectionable. But the problem is that Google has algorithms designed to find these answers for almost any question people might ask, and in an era of fake news, some questions and the ostensible answers are driven entirely by conspiracy theories and false reporting, which means that the right answer doesn’t even appear anywhere online. So it’s snippets serve up answers exclusively from fake news and conspiracy sites, as if these were incontrovertible, lending them an air of considerable authority, and causing many users to take those answers as gospel. The simple solution here is for Google to back way off from this snippets approach and limit it to questions that are both frequently asked and also answered by a wide range of sites including reputable ones. I don’t know whether Google will take that approach, but it’s going to be very hard for it to solve the problem in any other way.
via The Outline
The article doesn’t mention Microsoft once, but talks about Google’s consumer products several times, which makes it feel like this is rather missing the point. This is an enterprise offering and therefore goes head on against various Microsoft products and services intended to achieve similar aims (as well as those from Box and other smaller, more specialized enterprise software and service providers). Both Google and Microsoft are focusing on their AI skills as a source of differentiation in enterprise file management, by promising to help employees find the files they need. Search is, of course, a core Google skill, but it operates very differently in an enterprise file system from on the open web, and Microsoft may actually be better placed here given its long history and the massive investment many companies have made in Microsoft tools in this setting.
I don’t follow Pinterest closely, but this has been a long-anticipated change to its ad products, and an important one – search advertising continues to be the best way to deliver the killer combination of timeliness and relevance to a user. Most of Pinterest’s ad products so far have been focused on relevance – pins within the context of a topic-based board or within the overall feed of new content, which are somehow related to other things the user has looked at or pinned recently. This move also reinforces the idea that search is in some specific categories migrating off general purpose search engines and into specialized ones, with Amazon and shopping being the most prominent example. The article says that Pinterest sees two billion searches a month already, and that’s a massive base to insert ads into.
via Marketing Land