What if Google Declared War on Comparison Shopping Engines and No One Noticed?
Published: September 21, 2007
Author: David Rodnitzky
With little fanfare, Google posted the following announcement on their Inside AdWords blog this week:
The following types of websites are likely to merit low landing page quality scores and may be difficult to advertise affordably. In addition, it’s important for advertisers of these types of websites to adhere to our landing page quality guidelines regarding unique content.
- eBook sites that show frequent ads
- ‘Get rich quick’ sites
- Comparison shopping sites
- Travel aggregators
- Affiliates that don’t comply with our affiliate guidelines
Sounds pretty innocuous at first, that is until you read the line “Comparison shopping sites.”
To me, this is huge news, for three reasons. First, comparison shopping engines (CSEs) drive a huge percentage of Google’s revenue. I don’t know the exact percentage, but it wouldn’t shock me if all the CSEs combined (Shopping.com, Shopzilla, Nextag, Smarter, Become, etc) made up 10% or more of Google’s AdWords revenue.
So to call out these sites as being ‘bad sites’ that Google will try to disallow is sort of like your local grocery store saying that they will no longer sell candy because it’s bad for you. As we all know, however, Google does not make decisions based on some sort of higher standard of ethics or consumer advocacy, so for Google to directly attack CSEs, there must be a darn good financial reason behind this.
And that brings me to reason number two: Google’s continued war against eBay and Microsoft. As I’ve discussed in the past, Google has developed a lot of products to directly compete against these two companies. And guess what? Each of them has a comparison shopping site – eBay owns Shopping.com and MSN has MSN Shopping (though I am not sure whether they actually advertise on Google or not). What better way to hurt your rivals than to prevent them from advertising on your site, which just so happens to be the biggest advertising medium online?
The real revenue impact, however, comes with reason #3: Google Base. Preventing other CSEs from advertising on Google will naturally inhibit their ability to grow their user base. At the same time, Google’s universal search initiative has increasingly emphasized Google Base results within Google natural search results.
Do you see a trend here? Less exposure for rival CSEs, more exposure for Google’s homegrown CSE. Granted Google Base is currently free, but to paraphrase Milton Friedman, ‘there ain’t no such thing as a free lunch.’ Is there any doubt that Google will eventually begin to monetize Google Base traffic, either through AdSense or through a classic ‘charge the merchant’ CSE model?
A lot of people yawned when Google yanked the “free iPod” or “Made for AdSense” sites from the AdWords mix. I’m shocked that this announcement seems to have resulted in the same sense of apathy. If I was working for a CSE at the moment, the only yawns I’d have would be coming after many sleepless nights.