The business of search engines

The internet is a world of information, which we rely on search engines to help us find. But does this free service come with a catch?
 
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01 .Introduction

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With hundreds of billions of documents available online and internet usage on the increase, the ability to sort the reliable and relevant information from the unreliable and irrelevant using search engines has become big business. 

In a report prepared for Google Australia, Deloitte Economics estimated that the time saved just by Australian households searching accurately online is worth about $7 billion per year. But are we really getting results that best match our search queries?

This report takes a look at:

See our Software and online services section for more information about Internet.

Video: search-engines-opting-out

CHOICE journalist, Zoya Sheftalovich, explains how to opt out of search engine personalisation settings, step-by-step.

The players

Google

In Australia, more than 88% of searches are conducted using Google. Taking the lion’s share of the market, Google is approaching a monopoly – and search is not its only business. Its other offerings include:

To provide users with instant answers to search queries along with results, Google draws on its suite of products. So if you search for an address in Google, chances are a Google Map image will be your top result.

Bing

Bing is Microsoft's answer to search, and accounts for four per cent of searches conducted in Australia. Like Google, it also offers a suite of products, supported by Microsoft. These include:

Yahoo!

Around two per cent of searches are conducted using Yahoo! in Australia. The search engine is powered by Bing, and it's Australian website Yahoo!7 is a partnership between the Seven West Media Group and Yahoo! Inc. It's offerings include:

Search results

Google, Bing and Yahoo! are not impartial search arbiters – they all have systems in place that filter the way we receive our search results. They’re businesses and therefore operate to make a profit, driven in part by paid advertisers and by supporting their own product offerings. In some cases this is a good thing – it means you get what you want, quickly. But at what cost?

Other search engines also appear to elevate their own products into the top of the list, but it’s a concern that Google in particular, with its enormous market share, may be limiting the organic traffic flow to other, potentially superior products, and therefore limiting consumer choice in the long run.

The power of appearing early in search results is significant. A study conducted by The Australia Institute (TAI) in 2011 found that only 15% of people click beyond the first page of results.

Google denies manipulating search results in this way. “We rank search results to deliver the best and most relevant answers to users,” a spokesperson told CHOICE. “If we delivered search results in a way that didn’t serve our users’ interests, they would simply go elsewhere.”

However, Maureen Henninger, a search expert with the University of Technology, Sydney, believes Google has become too big. “It is not just search, it’s all the other things they’re involved in. They’re buying up just about anything that works at the moment. Many people are concerned with any sort of a monopoly because from a consumer’s point of view, they’re not necessarily always getting the best of what they want to buy or search for.”

 
 

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Searching on Google, Bing and Yahoo! is free. But to be profitable, all three engines sell ads. 

Advertisers bid for the chance to appear on searches for certain pre-selected keywords. In practice, this means a company may appear on top of or in the sidebar of search results for the phrase “best toys”, regardless of what toys they sell.

There isn’t anything necessarily wrong with this system, so long as users are aware it exists. But sadly, many aren’t. 

In the TAI study, 52% of survey respondents thought the web pages that tend to appear at the very top of their search results were those that were most relevant to their keywords. Only 40% believed they were most likely to be paid advertising.

According to TAI, “as with any free service, users do not necessarily invest much time or mental effort in ensuring that the service they are receiving is valuable or comes ‘with a catch’”.

Personalised search

Personalised search essentially predicts which results an individual user is most interested in receiving. This is done by recording a user’s previous search results – and the top three all do it.

“Every time you click on something it’s recorded and kept, so the search engines probably know more about you than you know about yourself,” says Henninger. 

“They use that personalised search to give you information they think you want, as well as for producing personalised advertisements, which is what the search engines are in the business of doing.”

This is why the same search done from two different computers can yield very different results. So if a Sydneysider searches for panthers, for example, their top result may be related to the Penrith Panthers rugby league club, whereas someone living in the US may get results relating to the animal.

This innovation seems like a great one – what could be better than getting the results you want, every time? But as Henninger argues, “it’s constantly filtering what it thinks you want, rather than what you might really be interested in.

“If a journalist is using a search engine, they’re going to be delivered results that are filtered, and [they’ll write] stories that are then going to be filtered again through to the consumer of that story. So it’s possible that the stories being written ... are really so filtered that [the end users aren’t] getting anything other than what the search engines are trying to sell in the way of advertisements.” 

She says that while this is an extreme projection, it is a possibility.

ACCC takes action

In 2007 the ACCC took legal action against Google, alleging they had engaged in misleading and deceptive conduct by failing to adequately distinguish ads from “organic” search results and by allowing advertisers to use the names and trademarks of their competitors in their ad headlines. The ACCC lost their action against Google, but an appeal will be heard this month.

“The role of search engine providers as publishers of paid content needs to be closely examined in the online age,” says ACCC chairman Rod Sims.

“Specifically, it is important that they are held directly accountable for misleading or deceptive paid search results when they have been closely engaged in presenting and publishing those results.”

The competition

Apart from the big three, other search engines make up just 6% of the online search market. That small sector is made up of a rag-tag collection of smaller or more specialised engines, and several up and comers do provide good alternatives.

Exalead, a search engine based in France, comes highly recommended by Henninger for those looking for more reputable results from official sources.

DuckDuckGo is a search engine powered by Yahoo! that doesn’t store personal information, and thus doesn’t use personalised search. Henninger says it’s a good way of getting more organic search results.

WolframAlpha calls itself a "computational knowledge engine" - in layman's terms, it's a search engine that doesn't just scour the internet for web pages, but rather answers your questions. It does maths, performs conversions, and presents facts and statistics, among other functions.

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