And here's 20 Billion dollars that disagrees with you. If switching was just a "click away" why would Google pay Apple $20B per year to be the default search for iOS etc.
Competition being a click away is what keeps quality between Google and Bing comparable, and what keeps Google always trying to invest to stay a step ahead.
But once quality is close like that, defaults matter, which is why Google pays Apple.
If Bing wasn't there (or barely worked) and there was no competition to Google, then Google wouldn't need to pay Apple, because Apple would never consider Bing as a default in the first place.
The payment is a sign of how strong competition is, not a sign of a lack of it.
In this case we have two ad supported search engines that deliver a very similar experience. As you note the differentiation is not great and thus, defaults matter. So in this case they are no longer competing on product quality, but on distribution. A high barrier to entry ($20B is high) but at <10% of Google's revenue it's affordable to them but basically no one else.
There is also brand competition and Google has done a fantastic job building very strong brand preference. Honestly no one has even tried to build an alternative search brand for over a decade in any meaningful way (DDG and Bing combined is the closest we could probably come and that's like Fresca competing with Coke).
Google Chrome has ~63% market share and that's not up for auction. They pay for ~23% or so at the $20B discussed thus no one is going to be able to out-distribute Google any time soon.
Furthermore no one, including Microsoft, is going to risk $20B on overcoming Google's brand preference. It would take years and probably $100B or more to play this game for an uncertain outcome. Better to invest in OpenAI than take that bet.
Credit to Google; they have built a very strong business with a strong moat. But no, real competition is not a "click away."
> So in this case they are no longer competing on product quality, but on distribution.
Incorrect. Quality is a moving target as search gets better. Competition is in quality and distribution. If Google stops improving and lets Bing move ahead on quality, it'll be dead. Witness the recent worries about incorporating LLM's into search.
> Furthermore no one, including Microsoft, is going to risk $20B on overcoming Google's brand preference.
Earlier this year there were reports that Samsung was considering switching to Bing, and it was suggested there was a similar $3B contract involved. So of course Microsoft is in the same game, and it's quite obvious that Google wouldn't be paying these sums at all if Microsoft weren't willing to offer something as well (but keeps getting outbid).
E.g. if Google weren't paying Apple $20B, it's quite likely that Microsoft would be paying Apple $15B instead. One of them would be.
Okay, they complete on quality but they are "close" to use your term.
My point was that paying to be the default is not enough. A challenger needs to also overcome the brand preference has built. A one-time investment of $20B (or even $3B) would be wasted. A true competitor would have to be in this for the long haul and willing to outbid Google for many years. Additionally they'd need to invest in building their brand image against Google which would be expensive and risky.
That may not maximize ad revenue however. For instance if the Going rate for placing guitar ads is low (not many people bidding to show guitar related ads) but mortgages is quite high google (or someone) would rather show the expensive mortgage ad than the cheap guitar ad.
Google owns the digital ad market with no real competitors, you would have to move to a subscription model to make money. Good luck with that, unless you feed another beast like Substack.
I'd imagine that the advertiser could only show needle ads next to content about sewing / knitting and be very effective at reaching the desired audience without resorting to collecting PII about that audience.
As I wrote in my example, this intent based method works for a big advertiser which is making a mass market product; but say someone producing a niche artisan knitting needle which only say 1 in 100 people who are interested in knitting needles will be interested in, would benefit from targeted advertisement. Otherwise, they would end up spending a lot of money on ad space not worth bidding for.
A nitpick, the advertiser is not collecting and getting PII. FB the ad platform, owns and controls that data.
Understood. My suggestion was that Facebook "target" based on the content of the post/article/website. Thus a needle ad is shown next to a kitting post. This can certainly be an artisan needle producer buying 1000 impressions...
Fully understand that Facebook is keep the PII close - that's their differentiation.
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> But what is "personal data"?
This is where I think current legislation goes awry. By going with a whitelist (e.g. age, gender, zip code) as the only allowed data for targeting ads we an avoid the debate of what is personal data.
> Ad-tech companies don't want "ample" profit. They want _all_ the profit.
Agree that the online ad companies won't want this legislation. But they'll have a hard time arguing that this will put them out of business. I think the general population likes these companies and wants them to continue to operate and be successful (as do I) but within reasonable bounds.
True, though collecting personal data for legitimate business purposes is not really a problem in my estimation. The ban on targeted advertising would not effect this.
Banning targeted ads is a much more focused solution to try to limit the excessive and harmful collection of personal data.
https://macdailynews.com/2023/02/21/google-pays-apple-20-bil...