

The real reason Google will fail - fnazeeri
http://altgate.com/blog/2011/01/real-reason-google-may-fail.html

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redthrowaway
Their title: "The Real Reason Google May Fail"

Your title: "The Real Reason Google Will Fail"

A bit sensationalistic, no? Click fraud is a problem, but not a huge one. It's
always been a fact on the Internet, and it's not going anywhere. It's priced
into the cost of ads. More important, I think, is the unsustainability of the
current model itself. With 8% of surfers clicking 87% of ads (can't find the
link, it was on here a while ago), and those 8% being an undesirable market,
we're going to have to move towards impressions, rather than clickthroughs.
Some sites have moved towards this model, and it sucks. The mandatory ads
before Youtube videos are a prime example of this. Whereas AdSense is almost
impossibly profitable considering how unobtrusive the ads are, the model we
are moving toward represents a significant decrease in user experience.

This, more than anything, represents a potential hazard for Google. Just as
Search sucked in '98, advertising is far from solved. Someone will come up
with a better advertising model, and it won't be Google. Google better hope
they can acquire them before Apple does, or before they decide to pull a
Google themselves and stay independent.

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dnautics
but google isn't just google search anymore, so even if some competitor comes
up with a "better advertising model" will they be implementing it in many
domains (search, free email client, youtube) at once?

~~~
benologist
Google is still "just ads" even if they do have other services and popular
properties to put those ads on, which is why someone else's better solution
would be a threat.

Does the next AdWords/AdSense need YouTube to succeed? No.

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yhlasx
But this "just ads" is really widespread, when someone will come with a better
solution, until they reach even 1% of what Google has, Google will come up
with a better solution :) And no one would like to switch from expert like
Google to some new guy

~~~
benologist
Lots of companies used to be really widespread, now they're dead or dying -
AOL, Yahoo, Digg, MySpace, Altavista, etc.

Google will have plenty of opportunity to fight for their position in the next
round. Some companies can win that fight again and some can't, no way to know
which category Google or anyone else falls in until after the fact.

~~~
yhlasx
Yes, there is always probability left for someone new to takeover. But it is
really small, especially in this case. At least for now. While Google is
making really smart strategic moves like android and chrome. And yes, Google
will have LOTS of advantages in the next round for the position.

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WillyF
The key point is that click fraud will be the downfall of Google, not users'
switching to a different search engine. I disagree. The beauty of Google's ad
model is that it's extremely sensitive to market forces. This means that click
fraud probably won't matter to most advertisers—it's just priced into the ads.
If 25% of clicks are fraud, then ads will be approximately 25% cheaper than
they would be if there was no click fraud.

A major media or government expose on click fraud could cause Google short
term problems, but there are lots of advertisers who are addicted to Google's
traffic. If they stop buying it, where will they go?

I'm sure there are some edge cases where click fraud is a serious problem for
individual advertisers, but Google can likely address those more effectively
because they should be easier to spot.

My second though is that Google has amazing resources available to combat
click fraud. Who else is going to do a better job than they will? Nobody has
at much at stake as they do.

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damoncali
I think you're right that in aggregate it doesn't matter. There are enough
people willing to put up with it for Google to be impressively profitable.

But sign up for an AdWords account, turn on the display network, and then tell
me click fraud doesn't matter when some site in India takes half your
advertising budget for the day. Google isn't as smart as everyone assumes.

In my experience, it's not an edge case - it's common and Google doesn't know
or care about it if you're not spending the $10k per month they require to
actually talk to a person. You just have to suck it up and not allow ads to be
automatically placed.

~~~
dmethvin
Exactly. Click fraud is just part of the cost of doing business, like
shoplifting for a retail store. The problem is that the individual stores
don't have a lot of control over the level of fraud that Google will tolerate.
There's a big difference between stealing a Slim Jim from the 7-11 and
stealing a diamond necklace from Tiffany's. If you are successful on AdWords
it's only a matter of time until the fraudsters realize it and leech on your
success.

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Sujan
So a company that sells a solution to click fraud says there is a lot of click
fraud. Wow, that's really surprising.

Even if there is significant click fraud, which I personally doubt, it still
has to be really massive to destroy the ROI of Google Adwords campaigns.

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baddox
Am I the only one that only uses Google as I'm about to describe? With very
few exceptions, I _only_ search Google for specific things I know exist. For
example, I will search for the name of a specific restaurant, a famous person,
or the name of a song. I rarely see spam because I rarely search for blanket
terms like "prescription drugs," "video camera," "news," etc. I have never
noticed a decrease in the quality of Google results (although I do think the
design of the results page has gotten less useful).

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yhlasx
I guess about a month ago, there was a blog like "Sacked by Google algorithm".
If the author of the blog read this, i guess he would've changed his mind.

I disagree with all reasons which may lead to Google's fail. Google's results
are getting better and better, in 30% cases, it is almost first result what
I've been looking for, in 80%, it is in the first page. If i don't see what i
want in the fist page, i change the search query. Instant is really helpful in
getting the right search query.

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dman
I dont think either clickfraud or search quality is as big of a threat long
term to google as is their monolithic nature. So far google has refused to
open up programmatic access to a) The data that they index b) The metadata
that gets generated on top of the data c) The user context available for
individuals based on their online activity. As the economic value of the above
three entities grows, the financial incentives to prove the above three things
also grow. I believe people/companies need the above three things to build
compelling online applications. In the long term if google refuses to provide
context + data + metadata someone else will step in to fill the gap.

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msg
I clicked through to the Click Forensics site to try to understand where they
got the 20% fraud number from. It is not there. There is a press release but
no methodology or anything else but the bare number.

Understand I do think they are doing sound work that could identify fraud.
They use a learning engine on data like IP, user agent, referrer, and post-
click behavior, and extract features.

What's really missing is distinguishing fraud from what they call low value,
unlikely to convert clicks. You might be able to uncover fraudulent behavior
patterns as opposed to crappy inbound links. But what is the ratio? What is
the method? I looked everywhere for this without reading and watching their
marketing sessions...

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Nelson69
Sure is a lot of "google's in trouble" chatter in the echo chamber the last
couple weeks. All because of a couple of subjective search tests?

Honestly, if you want to spin a good "Google collapse" yarn, start with how
advertising is a derivative of sales and talk that up in to a bubble of
overvalue bursting, that's at least sort of believable.

Way too much talent and they have too many things they are exploring. They are
a one trick pony still but I suspect they'll find some followup acts. If they
could crack medical care or put some serious energy in to the salesforce.com
type space of enterprise apps... it could be a different kind of company than
the world has ever seen.

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ibejoeb
I hate to ruin the party. Google can't fail. Even if they are or become
susceptible to something, they have already succeeded tremendously. I really
dislike contrarianism for it's sake.

~~~
gaius
_Can't_ fail? The industry is littered with companies that were once household
names...

~~~
ibejoeb
Yes: can't fail. They've already won. They may stop being #1, but they've
entirely changed changed the game. The Google legacy will live on.

I know what you mean, and I'm not trying to start a war of semantics. My point
is given what Google has already done they can only be rightly called
successful. I wouldn't consider AOL a failure; nor would I consider Microsoft
a failure; nor Facebook, even if something bigger a better comes along (and,
in time, I think it will).

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yhlasx
Only danger for Google is Facebook, in my opinion. Only they have potential to
compete with Google in ads arena

~~~
fnazeeri
Good point. Because of the user profile, FB can say with greater certainty
that an ad was clicked on by a real person.

~~~
yhlasx
Despite that, they can display ads with bigger accuracy. They have all info
about users. But Google has made a very precise step with android. And anyone
who would like to compete with them in this arena is still FAR behind.

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fnazeeri
I just got a ping back from this site on my original post.

[http://www.answersinsurance.com/life_insurance/why-should-
yo...](http://www.answersinsurance.com/life_insurance/why-should-you-have-
life-insurance-for-your-children.html)

(Don't click on any ads)

Awesome!

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mrtron
As others have mentioned, this is priced into CPC. An increase in fraud will
push more people to CPA.

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GrandMasterBirt
Remember: Google does not want click fraud. Yes they share in the revenue, But
it is detrimental. The goal of google is: Sell ads, sell the fact that google
ads = profit for your site. In reality having insane click fraud is ok, as
long as everyone is happy. Obviously people stop doing business with google if
click fraud gets rampant.

The only question is: Is most click fraud happening on google, or other
advertisers? This could be where google succeeds, "we have 10% of our
competitor's click fraud, we are the trusted network"

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nik61
Google had better do something soon about this, but they're damned if they do
(cite the AOL experience noted in the piece) and doubly damned if they don't.
Wouldn't like to be in their position...

