Monday, November 28, 2011

Google Tells The Story Of Its Search: No, You're Not Mentioned

"History is written by the victors." - Winston Churchill

TechCrunch wrote today about a video Google recently released summarizing the history of Google's search engine:

It's a very well put-together video that does capture how Google is continually innovating , but I noticed a few things the video did not include:

Mayer discusses AdWords (starting 57 seconds in), and the timeline shown in the video says Google didn't have ads on its search results until September 2000. That's not true. RealNames, the firm Michael Arrington & I worked at, convinced Google to try our paid search ads - in late 1999. It is perhaps no surprise that Google omits the role a business partner played in convincing them of the value (both in terms of revenue to them, and value to users) of market-based pricing for search ads, but I'm here to tell you & future historians what really happened. Here's the Dec. 2009 press release announcing Google's partnership with RealNames:

AdWords API
Google is as big a part of our lives as it is today for two reasons:

1. They built the best search engines; and
2. Because they've been the best at monetizing our use of their search engine;

Had Google not out-monetized its competitors, other engines would have been able to secure key distribution deals, such that we'd be using AltaVista, Yahoo, navigating directly via Internet Keywords in the browser address bar, or various other services in lieu of Google. Way back in 2004, Google's traffic acquisition costs (TAC) were 79% of revenues, versus 24% today; back when search was wide open and marketshare much more evenly distributed, Google needed to monetize better in order to earn additional eyeballs. Perhaps Google only wants to tell the consumer-facing version of its search history, but to not talk about the AdWords API is to miss how fundamental it was to Google winning the monetization game. The AdWords API allowed many SEM tools providers (both existing at the time, and new ones thriving today) to bring scale and automation to SEM campaigns, subsequent to which Google's revenues grew from $1B/quarter when the API was launched into beta Q4 2004, to $10B this quarter. 83% of Google's revenues come from 26% of its advertisers (AdAge, Sept 2009), and anecdotally I'd bet close to two-thirds of that 83% is spent via the AdWords API. [It's also worth noting that Google's attitude towards AdWords API developers of late is ambivalent.]

Nowhere in the video does Google so much as mention the partners that gave them distribution, the agencies that build & manage campaigns, or the trading platforms through which much of their revenues come. Were FedEx, HomeDepot, Ford or WalMart to put to video similar histories of their services, I rather suspect partners would be included and/or figure prominently. Not so for Larry, who, I've been told several times recently, would prefer that not a single company exist in between Google and its users. Larry, keep the following in mind: 1) Max never scaled; 2) your top advertisers shouldn't, don't & won't use your tools for strategic reasons; and 3) the essence of your business model is not search, but rather direct navigation via search for people who already know where they want to go but are too technically inert to use bookmarks and the address bar to get there.

In Google's history of search, you the publisher, you the agency, you the spend enabler... are nowhere to be found.


Blogger Matt Cutts said...

"Mayer discusses AdWords (starting 57 seconds in), and the timeline shown in the video says Google didn't have ads on its search results until September 2000. That's not true."

I'll go ahead and debunk this, because you're constructing a strawman argument that we're not making. In the video, Marissa says "In the beginning we didn't have any advertisements at all." That's certainly true: when Google was a prototype there were no ads.

Now go back and look at the timeline in the video and in the blog post. You say "the timeline shown in the video says Google didn't have ads on its search results until September 2000." That's not true at all. Instead, the timeline simply has the word "AdWords." Of course Google had ads in 2000 (I know because I was one of the five Google engineers who worked on ads in 2000).

Trying to summarize a decade of change in search in about six minutes means that we can't touch on every subject. But please don't misconstrue the video or timeline to claim that Google didn't have any advertising before September 2000; no one makes that claim in the video or timeline.

11:37 PM

Blogger searchquant said...

Thanks for adding your point of view to this, Matt. Technically your assessment of the video's overt statements is correct, but nevertheless it's both disingenuous & off-putting to the SEM ecosystem for Google to put out such a Google-centric story of its search history when the *reality* is that

a) Larry & Sergei were dragged kicking & screaming to awareness, shock & eventually acceptance of paid ads, with an outside firm showing the way;

b) distribution partners, agencies and technology partners were critically important to the conception, improvement and scaling of what Google deems by this video its sole creation.

2:18 PM

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