The Search for Harm

    Google
    By Google

    In the summer of 2010, Google announced plans to acquire the flight search provider, ITA.  As we said at the time, while many people buy their airline tickets online, finding the right flight at the best price can be a real hassle.  Today Google Flight Search has made that much easier.  Search for "Flight CDG to SFO" and you get the different options right there on the results page.  It’s a great example of Google’s increasing ability to answer queries directly, saving people a lot of time and effort -- because as Larry Page said over a decade ago “the perfect search engine should understand exactly what you mean and give you back exactly what you want”.  


    At the time of the ITA acquisition, several online travel companies--Expedia, Kayak, and Travelocity--unsuccessfully lobbied regulators in the US and the European Union to block the deal, arguing that our ability to show flight options directly would siphon off their traffic and harm competition online.  Four years later it’s clear their allegations of harm turned out to be untrue.  As the Washington Post recently pointed out (in an article headed “Google Flight Search, four years in:  not the competition-killer critics feared”) Expedia, Orbitz, Priceline and Travelocity account for 95% of the US online travel market today.  It’s a similar situation in Europe too, as this graph for Germany neatly shows:
    Travel sites in GermanyimageSource: ComScore MMX and Google data (for Google), desktop traffic, unique visitors (‘000s)
    We’ve seen similar allegations of harm from competitors in other areas.  And the European Commission today confirmed that it is sending Google a Statement of Objections (SO) regarding the display and ranking of shopping results.   
    While Google may be the most used search engine, people can now find and access information in numerous different ways -- and allegations of harm, for consumers and competitors, have proved to be wide of the mark.   
    More choice than ever beforeIn fact, people have more choice than ever before.  
    There are numerous other search engines such as Bing, Yahoo, Quora, DuckDuckGo and a new wave of search assistants like Apple’s Siri and Microsoft’s Cortana.  In addition, there are a ton of specialized services like Amazon, Idealo, Le Guide, Expedia or eBay.  For example, Amazon, eBay, and Axel Springer’s Idealo are the three most popular shopping services in Germany.  People are increasingly using social sites like Facebook, Pinterest and Twitter to find recommendations, such as where to eat, which movies to watch or how to decorate their homes.  When it comes to news, users often go directly to their favorite sites.  For example, Bild and The Guardian get up to 85% of their traffic directly.  Less than 10% comes from Google.
    Of course mobile is changing things as well.  Today 7 out of every 8 minutes on mobile devices is spent within apps -- in other words consumers are going to whichever websites or apps serve them best.  And they face no friction or costs in switching between them.  Yelp, for example, has told investors they get over 40% of their traffic direct from their mobile app.  So while in many ways it’s flattering to be described as a gatekeeper, the facts don’t actually bear that out.  
    Thriving competition onlineWhich brings me to the competition.  Companies like Axel Springer, Expedia, TripAdvisor, and Yelp (all vociferous complainants in this process) have alleged that Google’s practice of including our specialized results (Flight Search, Maps, Local results, etc.) in search has significantly harmed their businesses.  But their traffic, revenues and profits (as well as the pitch they make to investors) tell a very different story.
    Yelp calls itself the “de facto local search engine” and has seen revenue growth of over 350% in the last four years.  TripAdvisor claims to be the Web’s largest travel brand and has nearly doubled its revenues in the last four years.Expedia has grown its revenues by more than 67% over the same period -- and recently told investors:  “We're seeing increased traffic coming through Google Hotel Finder.  It is ­clearly getting more exposure. And in general … the product continues to improve.  And Google has invested in it, we'll continue to invest in it … From our standpoint, we're happy to play in any market that Google puts out there and over a long period of time, we have proven an ability to get our fair share in the Google marketplaces.” (Remarkable given their complaints).Axel Springer continues to invest in search, including the French search engine Qwant, because as the company told investors, there is a lot of innovation on the search market”.  
    Indeed if you look at shopping -- an area where we have seen a lot of complaints and where we understand the European Commission will focus its Statement of Objections -- it’s clear that (a) there’s a ton of competition (including from Amazon and eBay, two of the biggest shopping sites in the world) and (b) Google’s shopping results have not the harmed the competition.  Take a look at these graphs:
    Shopping Sites in Germany (unique visitors, ‘000s)Screen Shot 2015-04-13 at 1.22.41 PM.png
    Shopping Sites in France (unique visitors, ‘000s)Screen Shot 2015-04-10 at 8.53.36 AM.png
    Shopping Sites in the UK (unique visitors, ‘000s)Screen Shot 2015-04-13 at 1.23.11 PM.png
    Any economist would say that you typically do not see a ton of innovation, new entrants or investment in sectors where competition is stagnating -- or dominated by one player.  Yet that is exactly what’s happening in our world.  Zalando, the German shopping site, went public in 2014 in one of Europe’s biggest-ever tech IPOs.  Companies like Facebook, Pinterest and Amazon have been investing in their own search services and search engines like Quixey, DuckDuckGo and Qwant have attracted new funding.  We’re seeing innovation in voice search and the rise of search assistants -- with even more to come.
    It’s why we respectfully but strongly disagree with the need to issue a Statement of Objections and look forward to making our case over the weeks ahead.   
    Posted by Amit Singhal, Senior Vice President, Google Search



    Original: http://feedproxy.google.com/~r/blogspot/MKuf/~3/R-vcF5xIfRc/the-search-for-harm.html
    By: European Public Policy Blog
    Posted: April 15, 2015, 12:23 pm

    Google

    Google

    Google incorporated founded in September 4, 1998, is a global technology company focused on improving the ways people connect with information.
    Full description

    Google incorporated founded in September 4, 1998, is a global technology company focused on improving the ways people connect with information.
    The Company generates revenue primarily by delivering...