By Michael Gray

Is Google Too Powerful?

At the surface it seems such a simple question to answer. However, to find the answer we need to dig a little deeper and understand the complexities of the modern internet and electronic commerce.

Google’s dominant share of the search landscape puts it in a unique position. For many consumers, Google is the internet, or at the very least Google is the start page of the internet and doorway to the rest of the virtual world. For most web publishers and site owners, Google is responsible for the lion’s share of their traffic. In some cases Google can account for 60-90% of a website’s overall site visitors. For an ecommerce website getting traffic from Google can be the difference between making a healthy profit or going out of business.

For many businesses, especially small local organizations, the natural organic listings for high volume search terms are simply too competitive. These businesses are unable to compete with larger national or globally recognized brands, who have more personnel and financial resources to allocate to their website. For them the only alternative was paid advertising. While PPC may have cut into profit margins, the results were predictable, manageable, and with a minimum amount of risk. However, in July of 2006, Google made a dramatic change to the way they handled PPC advertising. The introduction of a quality score affected the price some advertisers were forced to pay. Overnight costs went from $0.10 - $0.50 a click to $5.00 - $10.00 a click, resulting in price increases of 500% - 1000% or more in a single 24 hour time span.

Google had cornered the market on traffic. They controlled who was listed on the organic side and set pricing, some times at astronomically uncompetitive levels, for paid advertisers. It became a Google world and there wasn’t anything you could do to change it. Google operated in a market without government intervention, oversight or regulations.

Google is taking very aggressive steps to retain the market share that they fought to achieve. By giving away free services like GMail, Google Reader, and Google Analytics, they price competition out and keep users locked into their offerings and their integrated search engine.

But Google isn’t stopping there. Now they want your data.

New initiatives like personalized search, and web history seek to gain a deeper level of access to your private world and all of the websites you visit. Google ‘bookmarks’ gives them access to the sites that you think are important, noteworthy or worth revisiting. Simply put - Google wants to mine your personal data and life to find out as much as it can about you. They want to learn how to market to you more effectively, and how they can extract the most profit from you.

While they may not have set out with this goal in mind, for many people Google knows more about them than the government. Our current government operates with a series of checks and balances. Google operates with impunity, and no one can challenge its motives. Google founders are even immune from their shareholders. The way Google’s preferred stock, Class A senior common stock and number of directors were established at IPO, the most the shareholders could achieve was a voting deadlock.

While Google may be too powerful they’ve crafted a public image that is exactly the opposite. With their college-campus-like work environment, bean bag chairs, 6o’s throwback lava lamps, the image they created goes hand-in-hand with their “do no evil motto”. Google is too powerful, they know it, and that’s why they are willing to give you so much for free. The less attractive and harder they make it for you to change, the more they have you tucked neatly into their back pocket.

Popularly known as “Graywolf,” Michael Gray provides SEO consulting and corporate blog consulting services in addition to pursuing his own affiliate marketing projects. Michael also is a respected speaker and sought after authority on online marketing. His blog is located at www.wolf-howl.com.

Tags: google, contextweb, is google too powerful, brain exchange

This entry was posted on Monday, April 30th, 2007 at 7:41 am. 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.