Citing the difference between how we buy something today and five years ago, FORTUNE magazine wonders if the search party is over. The FORTUNE article uses the following example to explain its view:
Say you want to buy running shoes to train for a marathon. Five years ago you would have simply Googled it, looked at the list of results, weighed your options, and made the purchase, perhaps by clicking on one of the sponsored links that accompanied your search. Today you might still do that, but increasingly you might pose the question “What running shoes should I buy?” to your friends on Facebook, or maybe write “Who knows about training for marathons?” on Twitter. By the time shopping service Groupon sends you (and 25 of your friends) an offer for the perfect shoes and registration for a race, you’ll probably just pounce on it.
Judging by the number of times we use Google every day, it might be sacreligious to predict its diminishing role in the Internet. However, if we pause to think about the increasing number of occasions in which we head directly to websites of branded e-tailers (ex: Amazon), social networks (ex: Facebook), status update sites (ex: Twitter) and group buying services (ex: GroupOn), then disintermediation of Google and other search engines doesn’t appear to be such a far-fetched notion.
Before we discuss these occasions, let’s take one scenario where Google undeniably rules: Information search. However, search results for information (ex: Dakota Building) are full of organic (unpaid) results, which don’t generate any revenues for Google which makes money only when users click links ads in the inorganic search results.
Given that advertisers buy search engine ads – also called sponsored links or inorganic (paid) results – to attract surfers having a purchase intent, such ads are mainly found on pages featuring search results for products (ex: Digital Camera) and services (ex: Plumbing) used as keywords. The key question is, what’s the role of Google Search when it comes to shopping?
Not much, as it appears not only from anecdotal evidence but also from my personal experience.
Here’s a list of the various websites that my family members and I visited to buy something or the other in the recent past: Amazon.com (Kindle), BestBuy.com (Apple iPad), Flipkart.com and LandmarkOnTheNet.com (books), IRCTC.com and ClearTrip.com (plane and train tickets), BookMyShow.com (movie tickets). As you can see, Google is conspicuous by its absence from this list.
If people increasingly head to the websites of leading merchants without passing Google Search along the way, they don’t see – or click – sponsored links on Google search results pages.
When you add Facebook, Twitter, GroupOn and other attractors of direct traffic into the equation, disintermediation is a clear and present danger to Google and other search engines. Not too surprising that projections for growth rate of the search business have dropped from a peak of 40% a year to 15-17%.
In hindsight, disintermediation of search should almost be obvious if we reflect upon our typical buying behavior. Let’s assume that we hear about a brand or a store from the yellow pages, through a magazine article or some other way. We visit the store and buy something. Whenever we decide to visit this store the next time, we’re likely to go to the store directly. Google Search is akin to the entity that first introduced us to this store but is no longer in the loop when we go back to it.