How Google became a ‘click cannibal’
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
Google is a search engine, yes. But it is also, increasingly, its own search destination.
So finds Rand Fishkin. The chief executive and cofounder of SparkToro, a marketing software startup, says that over the course of 2020 nearly two-thirds, or 65%, of Google search results ended without a click to another website. For exclusively mobile queries, no-click searches accounted for an even greater share: three-quarters of total searches, or 77%.
In other words, most of the time when people are searching for something online, Google is directing their lucrative, ad-spongeing eyeballs to…itself.
A spokesperson for Google tells Fortune the company believes the study “relies on deeply flawed methodology that misunderstands how people search for information online.” The study “doesn’t take into account the many times people refine their search queries because they don’t find what they’re looking for right away. Nor does it take into account when someone is looking for a quick answer,” the spokesperson said, as might be the case for weather forecasts, math calculations, or sports score searches, for instance.
Fishkin pushes back on the critique. He defends his decision to focus on aggregate data, saying, “I fear you could get any result you wanted by choosing what to include/exclude.”
Looking at the overall picture, the trend appears clear: Google is gobbling up a greater share of clicks than ever before. In an earlier 2019 study, Fishkin found that half of Google searches lacked a click-through to another site. If the figures are accurate, that means the buck—in this case, the ka-ching kind of buck—is stopping more and more at Google.*
Presumably, Google’s “featured snippets,” those informational boxes that appear on Google search results pages and which aim to answer people’s search queries, are increasingly satisfying knowledge-seekers. Google could argue that it is merely trying to provide a more helpful and efficient service to its users by stuffing more content into such snippets—and, sure, it is! But website operators might counter that the tech giant is stealing publisher traffic, ripping off song lyrics, and the like.
Fishkin describes Google’s behavior in savage terms. He says the tech giant is engaging in “increasing click cannibalization.” Brett Piatt, the chief executive of JungleDisk, a Texas-based cybersecurity software startup that caters to small businesses, puts it another way: “No longer a search index, http://google.com is now a web portal with ~33% referral rate to other web properties,” he wrote on Twitter.
As Google comes into the crosshairs of the Biden administration’s antitrust regulators—including those of his latest Federal Trade Commission appointee, Lina Kahn, a legal scholar and Silicon Valley critic—expect Google’s stranglehold on the search advertising market to be a major talking point during the proceedings. It’s a showdown Google won’t easily be able to click out of.
*There are some differences in the datasets that prevent a direct comparison. The 2020 data, sourced from SimilarWeb, a market analytics tool, covers worldwide searches across Google’s Android and Apple’s iOS mobile software. The 2019 study, sourced from JumpShot, another market analytics tool, was U.S.- and Android-only. (Avast, a Czech antivirus firm, shuttered its JumpShot subsidiary last year after an uproar over the company surreptitiously collecting and selling people’s data.)
What are your symptoms? Continuing on the search engine theme, hospitals are hiding price data from the view of web searches. Forced by federal law to publish previously confidential data as part of a push for greater transparency as of Jan. 1, hospitals have been embedding special code on their websites to block search engines from indexing pricing information as part of their results. Several institutions removed the code after the Wall Street Journal asked them about it.
Video game console-tation. Chat app Discord is said to be considering a sale to a big tech company, VentureBeat reports. The top contender is believed to be Microsoft, with the Xbox-maker particularly interested in Discord's gamer fanbase. But no deal is imminent, and Discord could still end up going public, Bloomberg reports, in which case it would follow the lead of video game studio Roblox, which had a sizzling market debut earlier this month.
Ex-Box. Like Discord, "cloud" storage provider Box is exploring a sale, Reuters reports. The difference is that Box is facing pressure from Starboard Value, a hedge fund, over years of lagging stock performance as it battles a stiff competitor in—guess who?—Microsoft. Box's share price jumped 10% on Monday after news broke of the possible buyer search.
Crater economy. For the first time last year, YouTube's top-earning creator, 9-year-old Ryan Kaji, made more on licensing and merchandising than on advertising. As much as 70% of Kaji's $30 million take came from sponsors likes Walmart, Target, and Sketchers, and signing on for TV shows with Nickelodeon and Amazon, among other deals. "The most successful YouTube operations see ad revenue as a diminishing proportion of their overall business," Bloomberg reports. Maybe that's why YouTube is developing a tool that would serve up links to content related to products featured in videos, 9to5Google reports.
On the move. Caesar Sengupta, Google's head of payments and its emerging markets-focused "next billion users" initiative, said he is leaving the company on April 30th. Sengupta joined the search giant in 2006 and rose through the ranks to manage Google's Chrome products, a job that helped cement a friendship with now-CEO Sundar Pichai. Most recently, Sengupta oversaw the launch of a revamped Google Pay app. Elsewhere, a pioneer of the open source movement, Richard Stallman, says he is back on the board of the Free Software Foundation despite having resigned in 2019 over a controversy related to remarks he made defending the behavior of associates of Jeffrey Epstein, the notorious sex criminal.
Ain't that nifty? NFTs, or non-fungible tokens, are still selling like hotcakes. The cryptocurrency-related pieces of digital content can take the form of artwork, collectibles, virtual real estate, trading cards, or other items.
Latest form of government: "the TikTokcracy."
FOOD FOR THOUGHT
The reckoning over racial and gender equality in Silicon Valley continues. In a meaty feature, Time Magazine draws away the curtain on "diversity theater" in the tech hub by detailing the painful experiences of several former Pinterest employees who allege facing discrimination there. The story follows Françoise Brougher, Pinterest's former chief operating officer, who landed a record-setting gender discrimination settlement of $22.5 million, and two others who are advocating to do away with NDAs involving employer racial discrimination.
Now, nearly a year after their departures, Brougher and the two colleagues she had never met while at Pinterest—all performance-driven, and obsessed with process and results—stand among the most significant figures in a reckoning not just at Pinterest, but in the long exclusionary saga of Silicon Valley, where 5% of tech leaders are women, far fewer are Black or Latinx, and only 2% of venture capital money goes to female founders. Their stories fit an unnerving pattern in an industry once optimistic about changing the world that instead has fallen behind even legacy industries in diversity and inclusion.
IN CASE YOU MISSED IT
How Intel’s new CEO can revive the chipmaker’s fortunes by Aaron Pressman
Microsoft workers to begin returning to global headquarters by The Associated Press
Volkswagen shares pop after report values its EV business at $230 billion by Christoph Rauwald and Lukas Strobl
Spark Capital steps away from its investment in Dispo by Lucinda Shen
(Some of these stories require a subscription to access.Thank you for supporting our journalism.)
BEFORE YOU GO
Going, going, sold—for $2,915,835.47. Jack Dorsey, founder and CEO of Twitter, auctioned off his—indeed, the world's—first ever tweet as a non-fungible token, or NFT: "just setting up my twttr," the March 21st, 2006, post read. Sina Estavi, chief exec of Bridge Oracle, a Malaysia-based blockchain company, placed the winning bid on Monday. "This is not just a tweet!" Estavi declared, victoriously, in a tweet of his own. "I think years later people will realize the true value of this tweet, like the Mona Lisa painting."
Whatever you think of NFT mania—whether you regard it as a Cambrian explosion of masterworks rivaling La Gioconda, or as "a big pile of ass-shit" to quote Beeple, the movement's leading figure—at least the money is going to a good cause. Dorsey said he is donating the nearly $3 million windfall to GiveDirectly, a nonprofit group that sends cash to impoverished families in East Africa.