- Google search is strong because it can predict our search queries, based on personalization.
- Social media is replacing search as the place to go for search queries, returning stronger and more specific results from the crowd.
- People are still stung from the NSA PRISM leak, and may be more inclined to leave Google in the future.
What matters more to you when you have a query: A search engine that knows you and your history and can give you personalized results, or a crowdsourced platform in which friends, acquaintances, and total strangers can give you their own personalized answers. Which do you prefer?
The crux of this question, and your answer, will determine the direction that Google (GOOG, GOOGL) will go. I recently wrote an article which argued that Google's search is in danger due to the evolution of social media, which seems to be veering head-on into the search market. Bram de Hass responded by saying that Google's hold of personal data improves its search engine to such a degree that not only is it not in danger, but rather, is getting stronger.
Considering that search still represents 87% of Google's revenue through a healthy combination of AdSense and AdWords dollars, search is nothing to scoff at. That is why it is vital to temporarily ignore Google's more outlandish endeavors, such as self-driving cars, smart glasses, and smoke alarms, and keep tabs on how it is doing in search and where the search market is heading. Now let's get back to the question I posed in the beginning of the article.
An Answer of Sorts
The answer to the question posed in the first paragraph is not black and white. Personally, I would say it depends on my query. If I'm interested in a finding an Italian restaurant in a specific city, or I'm debating the merits of buying a Pebble smart watch, then I'll probably use social media, instead of a search engine. But if I need the address or phone number of an establishment in a city, or I want to research a company before writing about it, I'll probably use Google.
As you can see from these unbiased examples, a person's query platform depends on the nature of the query itself. And more and more, people are using social media instead of traditional search. True, Google's wide moat widens every second, but that statement needs to be revised to: Google's wide search moat widens every second.
Bram de Haas, in his fair and intelligent article-response to my social media search speculation article, brought up an interesting development: the idea that personalized search will affect searches for the better, and gives Google a heads-up over any potential competitor.
I will respond with two very different items: the NSA and sheer evolution of the web.
Americans & The NSA
The NSA PRISM scandal certainly jolted many Americans into a tizzy. From a search perspective, proof of this came by way of tremendous growth traffic from DuckDuckGo, who has made its name by embracing encrypted search, something which is ostensibly protected from the NSA's hands. For a search engine whose sole recognition came from encryption to increase its growth 4x in just 8 days says something about the willingness of users to bolt from a trusted search engine, such as Google, Bing or Yahoo in a rather short period of time. Google might now even be taking tips from DuckDuckGo.
Perhaps more telling is a survey taken in the wake of the PRISM leak, which showed that 42% of Americans felt that the NSA's actions were unacceptable. Sure, this 42% doesn't mean that 42% of Americans are suddenly loathe to use Google, however, it does indicate the possibility, and maybe even likelihood, that 42% of Americans are just one more Google privacy leak/mishap from bolting to new search options.
Again, this is not necessarily likely, but the combination of DuckDuckGo's growth and a general uneasiness of the suddenly discerning U.S. public toward both government and their alarmingly cozy relationships with big companies, such as Google and Verizon might indicate that Google's great castle of personal data is a bit more than we can or would like to handle.
Evolution of The User
While typing this article, occasionally I will hesitate on the spelling of a word, namely because the Seeking Alpha writing platform does not give an immediate red underline of a misspelled word, but rather the spell checker at the end catches any and all of my misspellings. With me being an impatient writer, I quickly open a new tab and type the word in question into my browser, and Google returns it with the familiar "Did you mean..." answer, and viola, the correct spelling of the word appears.
Much in the same way that I achieved the correct spelling of a word by way of search, and not by entering it into a proper word/definition/spelling website, such as Merriam-Webster, I might conversely be inclined to search for news in outlets other than news sites, or even Google. I might just get my news from Twitter, or even Facebook.
In fact, a recent survey showed that 30% of Facebook users get their news from Facebook. I bet that a high percentage of Facebook users who type queries/status updates into Facebook used to type the same queries into Google. The same goes for Twitter.
Personalization vs. Social Search Media
What the future of Google's success, as well as its role in search comes down to is the continued evolution of search. With the wider and increasingly strong net that social media casts over internet users and their web experience, other mediums, including search, will begin to suffer, or at least not grow as robustly as they used to.
I believe that social media has turned into social search media, because people are essentially searching all the time, and no longer exclusively to search.
Sure, Google has a wide net, and with Chrome, Android, Google+ and other programs that lets it learn and predict what users want, it can certainly stay ahead of the likes of Bing and Yahoo. But being number one in a seemingly diminishing market of antiquated search is not a favorable rank for the biggest company in the world.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.