The Next Industry Google Is Destroying

The following video is part of our "Motley Fool Conversations" series, in which senior technology analyst Eric Bleeker and Chief Technology Officer Jeremy Phillips discuss topics across the investing world.

In today's edition, Eric and Jeremy take a look at Google increasing its presence on the search page. Google recently began expanding its own search data above health-related terms, a potentially destructive move for SEO-optimized websites in the space like WebMD. This follows Google's foray into serving its own results -- at the top of search terms -- for areas like the travel and credit card industry. For companies that rely on Google for a large amount of traffic, this a key threat that Internet investors shouldn't ignore.

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Eric Bleeker has no positions in the stocks mentioned above. Jeremy Phillips has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and has the following options: long APR 2012 $30.00 puts on OpenTable. Motley Fool newsletter services recommend eBay, Google, OpenTable, and priceline.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On February 16, 2012, at 11:08 PM, fvgetcom wrote:

    You're not kidding that Google influences how much money a company can make! All websites live daily with the results of Google's increasingly "me first" policy, and it ain't pretty. As time has passed over the last few years, Google has placed more paid ads at the top of its search results pages, and now places their own Google information about the topic just below that. (FYI, though...Bing is using this tactic increasingly, as well.) A few years ago, 4th or 5th place "organic search" listings were "above the fold;" now, they are generally down at the bottom of the 1st page. 7th or 8th ranked listings (formerly shown on Page 1 of the results) are now often rolled over onto 2nd page. And, it's all because of the extra ads & Google's own information placed at the top of each page of the most lucrative search results......... As the video mentions, websites about travel, restaurants, & certain other topics all have lower organic traffic now because Google is putting their own results at the top, which leads web surfers into spending more time on Google's own pages. (Web surfers are notorious for reading the results which come up right in front of them.) Of course, companies can always advertise & get put back at the top of search results pages by paying to get there, but then that costs $$..... Yet, even before this trend, Google has had the power to give or withhold traffic at their whim simply by determining where a company's website gets placed in the rankings. The infamous Overstock.com debacle (Feb 2011) still leaves the webmaster community sweating. Overstock.com lost its good rankings virtually overnight, as you may remember, because Google discovered that the company was giving discounts to various colleges in return for posting links to Overstock's website. (These links were typically in the advice to new incoming students about where to get products such as bed sheets and dorm furniture.) This had been an excellent strategy by Overstock, because Google's search placement depends heavily on backlinks when determining search rankings. And, websites with the now-coveted ".edu" ending (instead of .com or .net) are given extraordinary weight, because the education community's opinion is highly regarded. Overstock.com only ran afoul of Google because it was providing INCENTIVES to the universities for placing those links. But, who could blame Overstock for that? Google places so much pressure on webmasters to get "high quality inbound links," but that's not easy to do. What university or organization sits around wondering what lucky website they're going to link-to today? But, to sum up, it just goes to prove that one way or another, businesses these days are dependendent on Google and Bing if they market to consumers. Companies can be sunk quickly overnight like Overstock was...or their organic ranking positions can erode slowly because of Google's many ads & Google's own content showing up first. Companies can combat this by advertising with Google and Bing...but that costs money. Nobody can ever count on getting traffic from a search engine. Period. Even if they've been favored by Google in the past. And yet, these days a company always has to expect competition from whomever wins the top free organic search positions...'cause those companies are going to get LOTS of traffic!

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