Local Search

Video Deep Drive: Is Google abusing its power in local search in the United States?

By June 16, 2016 3 Comments


This is the 18th installment this year of our Deep Dive Into Local series. For the week ending Monday, May 13th, David Mihm and Mike Blumenthal shared their thoughts about the previous week in local. The complete video, including links and commentary on critical happenings of the previous week is posted in the Local U forums (paywall). In the second half of that video, they take a deeper strategic and tactical dive into one interesting area that caught their attention during the week.

In this discussion, David and Mike talk about the latest debate between Google and Yelp over local search results.

Mike: So with that I’d like to switch into our Deep Dive and…

David: To another company that’s fond of the anti-SLAPP laws.

Mike: Well before I do that, I just wanted to give it some context. So Google yesterday released a new keyboard for the Apple iPhone called Gboard which replaces your Apple keyboard with a Google keyboard and puts search front and center on the keyboard. So you can do a search really quickly while you’re in texting, while you’re in email. Any place where your keyboard would show up and you can then embed that search into your communication.

I loaded it up and I found it only of marginal value. It’s a little bit slow. It only gives you a search url so it drives that other user back to the search result, it doesn’t really give him an entity or something else. So I found it of marginal value. But of course in Twitter, Yelp, the first thing they did was complain that when you search for “Row 34 Yelp” that it showed a Google entity result card first in front of the Yelp card. It just so struck me that Yelp … of all the things to complain about that struck me as an odd one. So I guess that transitions into our deep dive about Yelp. Go ahead why don’t you kick it off.

David: So the other news this week was a rumor on Politico that the FTC may be reopening its antitrust investigation into Google largely at the behest, and I use that word intentionally, of a Yelp-sponsored researcher, Tim Woo, who’s testimony a couple of months again has basically re-triggered this investigation.

So I want to bring up a comment thread that, first of all that it happened on your blog Mike a few weeks ago, about whether or not Google, when this first came up three, four years ago … My argument is that Google was actually in a much more dominant position three of four years ago before the rise of Facebook, before Amazon started making all these local plays, certainly before Apple even had a mapping product. If the FTC didn’t think Google was a monopoly then in local search, I don’t see how they could possibly come to that conclusion today in what I think is a much more competitive environment.

Mike: Well, counter to that point is that, at least in Europe and to some extent the United States, Android, in which they create a lock-in on those apps, does leverage their monopoly position in phones to enhance their position in search. So it’s one step removed but —

David: But I don’t think that Android is part of this investigation —

Mike: Not in United States. It is in Europe, though.

David: Right in Europe. I’m not saying anything about the European case. I’m only talking about this much narrower “Is Google abusing its power in local search in the United States?”

Mike: And there’s two ways that antitrust can abuse power. One is they can cause consumer harm which has consistently been Yelp’s argument. And the other is that they can use their monopoly power to intentionally disadvantage competitors which always struck me that the first argument, the way Yelp presents it is, “Oh, Google showed the phone number for Row 34 and then they showed the Yelp result and we think consumers are harmed by that.” I find that argument particularly weak. I find also it’s in the context of them sounding like they’re whining all the time, right?

And it’s like, “Okay, is the consumer stupid?” They can’t look one result down and see the Yelp result if they really did search for “Row 34 Yelp?” And the reason that it happened is if you search for “Yelp Row 34” then the Yelp result’s going to come first. If you search for “Row 34 Yelp” the Row 34 result’s going to come first. Is that really disadvantaging the consumer and harming them in some way?

David: Google’s entire algorithm is built around these sort of semantic relationships of brands and so if you are expressing a brand preference for Row 34, regardless of the keywords that come after it, Google’s going to surface their brand result, their semantic result for Row 34. So I think it makes … I don’t see how … It would seem particularly onerous for Google to re-engineer its entire algorithm just to suit this one pretty limited use case, in my opinion.

Mike: Well and interestingly, they’ve done a lot of research, too, that most consumers want on those types, particularly entity queries, they want phone number and hours and that’s what Google is delivering in that context. Now, interesting, I did that same search on my iPhone on Safari did show — the “Row 34 Yelp” search — did show Yelp first. In fact the first three results and the entity was pushed down to position four, whereas on the Gboard, it was reversed. So one wonders whether the squeaky wheel does get greased in this context.

David: Possibly. The other thing I wanted to bring up in the context, since you brought up the iPhone and Safari, you know I think an increasing number of these searches are going to pull directly from Spotlight results which are Apple Maps. You know would Yelp be making the case if Apple had chosen say Citysearch to provide restaurant reviews within Apple search results.

Google, it seems to me, could make the same exact same argument that, “Oh, we’re at a disadvantage on Apple results because they’re showing Yelp all the time, front and center when our results are better.” So, I don’t see how this is a sustainable argument for Yelp on either side — either the consumer side or the business side.

Mike: Yeah. Unfortunately all too often in our country, anti-trust revolves around corporate interests, not protecting the interest of consumers. I think that to some extent reflects our current political reality but it also is a problem because in the end consumers don’t typically win in these arguments.

David: Right.

Mike: Do you have anything else to add?

David: No, that was kind of it. I think there have been plenty of times when I’ve sided against Google. But I was more likely to a few years ago when they had even less competition and it’s a pretty hollow argument at this point, I think, from Yelp.

Mike: With those words, we will wrap up our Last Week in Local. Thanks again for joining me today, David.

David: For sure, good to see you again Mike.

Mike: Take care.

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  • Dave says:

    I’ve strongly believed google is a simple monopoly on search for several years. The convincing situation involved purchasing an existing business with terrible revenues and thus inexpensively. When I first glanced at it, I knew there was something wrong with its google visibility and was sure I could clean it and improve.

    Didn’t happen that way. I took every step to clean the visibility. It still stunk. I went everywhere to get assistance. Google customer service, G local forum, asked advice, even went directly to the “deep dive” participant, Mike. No solutions.

    Kept persisting. Got into google local and a “decision maker” which only occurred because of persistence and a few other efforts.

    In 45 minutes between contact and this person’s look it was found there was a Penalty. Not one that was being addressed by customer service or through the local forum. It was “corrected” They validated it. I could go on about that process!!!! as it was subject to more mistakes.

    ….and the business had good visibility and leads flourished and revenues went up.

    That is the impact of a monopoly. There was no other recourse. There was no way I could get a government body or the courts to intercede. Google had total control. Its secretive “google only” penalty had killed the first business and was passed on to this new business.

    Now that is an anecdote but its also a monopoly in action. Where did they get the authority to make or break independent businesses and be the sole power who could assert such power? Where is the check and balance?

    I could go on….but I don’t see that kind of power being blocked or changed. I laugh at comparing FB and social media to search. It has nowhere’s near the power on most smb’s and consumer reactions when it comes to looking for local businesses and services. It has a little impact on some industries and no impact on others. Can you cite examples where social media dramatically and positively impacted tire sales, or insurance agents, or replacing your gardening tools??? Give me a break.

    Yelp had a good case several years ago. The WSJ leak of the original analysis found that Google was “strong arming” both Yelp and TripAdvisor. The politicians above decided not to make a case!!!! No explanation. Interesting. Google’s power and influence must be very strong…way outside the boundaries of search into the halls in Washington DC.

    There have never been checks on its stranglehold on search. There should have been for years and there should be now.

    My $0.02 for the day. 😀

  • Dave says:

    So fellas: Google announced they are going to change the nature of the 3 pack. Remember the 3 pack. Once it was a 10 pack, then a 7 pack, and currently a 3 pack. It appears google is going to change the 3 pack from 3 “organic/local” businesses to 2 organic/local listings and one that pays google DIRECT.

    Suppose one is in a metropolitan region where there are 20-30 or more providers of local goods and services.

    By the way, 80% of Americans live in metropolitan regions. 80%. That is a lot. 80% live in areas where there are many more than 2 providers of a local item or service.

    Google is allowing only 2 of those providers to get some kind of “SEARCH visibility”. The visibility of all others is determined by Paying Google…or subject to Google’s algo’s and games.

    I’d say the vast majority of local businesses are being jacked around by google, the service that dominates search.

    In fact, you two are among the people that document how Google search dominates.

    I’d call it abuse. What would you call it? ….or do you subscribe to the Marie Antoinette/Google philosophy of let them eat cake????


  • Mike says:

    There is no argument that Google is a monopoly in local search. Monopolies are not in and of themselves illegal.

    The questions are
    1- is the consumer harmed by the action (David’s point is that it is difficult to argue that given the consumer not has easy and credible choice)
    2- Does Google use their monopoly position to harm or disadvantage competitors. From my research that might be a better argument for Yelp to make but that is not the one they are making

    However you argument that the some local operators are harmed, while true, is not the basis for an antitrust case. And even if it were Google could easily argue that on balance they provide a great benefit to those users.

    I am saying that while your argument may be true its not germane to the determination.

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