What could conceivably disrupt Google Search? When does growth stop?
— Post M. (@Post_Market) November 7, 2021
Google has maybe the best business model of all time. It has a fantastic flywheel and technical advantage that has remained free of serious competitors for the last 23 years. But a new crop of competitors is springing up in an age of free-flowing capital. And big, well-funded names are coming after Google's business.
Neeva.com offers an ad-free subscription-based search and was founded by the ex-SVP of Google Ads, Sridhar Ramaswamy. You.com puts data sources front and center and was founded by ex-EVP and chief scientist of Salesforce, Richard Socher.
I don't think either of these companies will displace Google. But as a thought exercise — how would you compete and win against Google Search?
Many of these companies try to take Google Search head-on. So instead, I'd start by asking — where is Google weakest? Attacking distribution at the fringes seems like an excellent place to start.
- What suboptimal design choices have been made in free and open-source products? It's hard to imagine that Chrome/Chromium doesn't have the user in mind. But at its heart, it exists as a distribution channel for Google search. Should the omni-bar prioritize browser history over search results? Google and users might disagree. Open source is a powerful distribution channel when value is aligned with the end-user.
- What platform shifts will make text search irrelevant? Do you remember Google Images? The product hasn't seen much innovation in the last decade. Instead, competitors like Pinterest have built entire businesses on disrupting it. Why? Because Google doesn't show ads on Image Search. Image Search wasn't the platform shift significant enough to disrupt text-based searches, but voice or AR/VR might.
- What valuable information lies behind walled gardens? Facebook/Instagram is the best place to search for social media accounts. Amazon isn't a walled garden but can show closed-loop attribution (see the ad, buy the thing all on Amazon) and has excellent distribution. Apple gets paid nearly $15B/year to make Google the default search on mobile — so it might be hard to break this symbiotic relationship. A startup can't challenge Google like this, but maybe there's an opportunity for one of these companies or a partner to do so.
Where is Google strongest? While it's true that ad load on Search and YouTube has increased dramatically over the last few years, free is hard to beat.
Creating Value
Search is extremely valuable to us. Erik Brynjolfsson, a researcher now at Stanford, did some work to show that an average user would require compensation of $17,000 to forego search engines for a year (you might remember Brynjolfsson from my post on Measuring Productivity in GDP). That's a lot of surplus.
Capturing Value
Google is great at capturing value from that surplus. Google's average revenue per user (ARPU) for search is extremely high. It's hard to separate nowadays, but I've seen ARPU estimates from $100 - $250 / year. Would you pay that much for search? Your alternative should probably generate a higher ARPU (or have a wholly different business model).
Fun exercise, but I don't recommend trying to compete against Google Search!