An interesting (and somewhat lengthy) article in today's New York Times, which may be of interest to some people here:
"Google Casts a Big Shadow on Smaller Web Sites"
November 3, 2012
STARTING in February, Jeffrey G. Katz grew increasingly anxious as he watched the steady decline of online traffic to his company’s comparison-shopping Web site, Nextag, from Google’s search engine.
In a geeky fire drill, engineers and outside consultants at Nextag scrambled to see if the problem was its own fault. Maybe some inadvertent change had prompted Google’s algorithm to demote Nextag when a person typed in shopping-related search terms like “kitchen table” or “lawn mower.”
But no, the engineers determined. And traffic from Google’s search engine continued to decline, by half.
Nextag’s response? It doubled its spending on Google paid search advertising in the last five months.
The move was costly but necessary to retain shoppers, Mr. Katz says, because an estimated 60 percent of Nextag’s traffic comes from Google, both from free search and paid search ads, which are ads that are related to search results and appear next to them. “We had to do it,” says Mr. Katz, chief executive of Wize Commerce, owner of Nextag. “We’re living in Google’s world.”
Regulators in the United States and Europe are conducting sweeping inquiries of Google, the dominant Internet search and advertising company. Google rose by technological innovation and business acumen; in the United States, it has 67 percent of the search market and collects 75 percent of search ad dollars. Being big is no crime, but if a powerful company uses market muscle to stifle competition, that is an antitrust violation.
Read the full article here: