Ads served on searches power the company's business and the credibility of its core search engine has been the backbone of its brand. Type something into Google and when the results pop up people trust them -- rarely going deeper than the fifth result according to various studies.
That may prove to be an unfortunate choice according to new research from Harvard Business School professor Michael Luca and data scientists at Yelp (NYSE:YELP), who have published a paper that is highly critical of the company's search results.
Of course, this is not the first time Yelp has made this charge. It did so almost a year ago in leaked documents, TechCrunch reported.
What are the researchers charging?
The paper says that Google no longer delivers the best results for the person searching. Instead, it charges that the search leader serves up the listings that most benefit its products.
"By prominently displaying Google content in response to search queries, Google is able to leverage its dominance in search to gain customers for its content," the paper reported. "This yields serious concerns if the internal content is inferior to organic search results."
How did they determine this?
The researchers conducted a randomized controlled trial where they compared Google's current results to ones which were purely organic. Essentially they showed the participants listings weighted in favor products owned by the search engine and another set that showed the organic results without that weighting.
They found that users were 45% more likely to interact with the search results when they were organically produced.
"This suggests that by leveraging dominance in search to promote internal content Google is reducing social welfare -- leaving consumers with lower-quality results and worse matches."
Where does it hurt the most?
While Google does this across its search listings, Yelp vice president of public policy Luther Lowe said that the impact is felt most deeply in one area.
"The Google organic ranking algorithm does a great job at identifying helpful content on the Web," Lowe told The Washington Post. "But it's sadly not being deployed in the most common user behavior on Google: local search."
He charges that the company favors local listings which have Google+ or Google+ Local pages over those who do not -- even when outside rankings (such as Yelp) show that non-featured listings may be held in better regard by the public.
Is Google doing anything wrong?
The findings of this study need to be taken with a few grains of salt because Yelp directly competes with Google and turned down a buyout offer from the search giant. The real question is whether the search giant has a bigger responsibility to its own business interests or to its users.
In reality, the answer is somewhere in between. Google must serve up useful results consistently. If it gives customers bad data based on pushing its own agenda then those customers are not likely to have a good experience. That could drive them to Yelp or another review site.
But, Google also has the right to favor its own products and partners as long as those results provide a reasonable answer for the customer. It's a fine line the search engine must walk in service of two masters and, in general, the company does a pretty good job of it judging by its 70.8% of the desktop search market in June, according to NetMarketShare.
Consumers need to be wary
While Google is not doing anything wrong in favoring its own products and it could be argued that it's acting in the best interest of its shareholders, consumers should go in with their eyes open. Google wants to serve useful results in order to keep its customers coming back. It does not, however, have to deliver the best results when it could deliver good enough choices that also support its products.
Yelp has a bias here, but that does not mean it's wrong. It may color the findings, but it does not negate them.
Google may have a "do no harm" philosophy but it's still in the business of making money. Leveraging its user base to support its products just makes sense as long as its search results remain useful enough to keep people coming back.
Daniel Kline has no position in any stocks mentioned. He has Googled himself. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). 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.