TechCrunch recently published a controversial post by a well known executive at a major website. He posted the article anonymously to disassociate the article from his company, and for fear of the backlash he would get from the search engine optimization (SEO) industry and possibly Google.

Essentially, the author argues in favor of government regulation over the search engines’ – most particularly market-share leader, Google’s – organic and paid search policies, or a minimum level of transparency in how they determine search results.

The author contends that Google effectively controls traffic to websites on the Internet via organic and paid search, and yet the company is unclear, unfair and arbitrary in how it allows website owners to use organic and paid search to attract that traffic to their sites.

Because the ‘rules of the game’ aren’t clear and liable to change (often) the system can also end up benefiting the few – predominately experienced agencies and traffic brokers who, through their experience, are able to ‘reverse-engineer’ the rules, while the average small we business is left high and dry, essentially forced to hire such agencies and brokers.

The author indicates that free trade is impossible in this environment. In the absence of disclosure and transparency – where Google would have to disclose its methodology for ranking search results – the market is unable to ’self-correct’, resulting in the current, seemingly unfair situation.

So is the author right? Is it time the government stepped in and forced Google to disclose its search algorithm, along with its methodology for accepting, rejecting and ranking paid search results?

And, while we’re at it, should Google also be required to disclose how much of a click its Google Adsense advertisers get paid? And what about its systems for displaying news – should it start disclosing those too?

Well, before we get carried away, let me answer the question in a single word: no.

I don’t say this as a Google ‘fan-girl’; I say this as a believer in capitalism… and in the perils of excessive government regulation.

So, regardless of whether we love or loathe Google, let’s get some perspective here.

Firstly, whilst Google’s influence over a website’s access to Internet traffic is substantial… so too is a television network’s influence over access to its audiences, and a shopping center’s influence over access to its customers.

In fact, Google has far less control over a website’s access to the Internet audience, than the control a television network has over access to its audience, or the control a shopping center has over access to its customers.

But we’re not really comparing apples to apples, are we? The truth is that Google doesn’t control access to all Internet users any more – and actually far less – than one television network controls access to all television viewers, or a shopping center controls access to all retail customers.

Sure, lots of – perhaps most – Internet users use Google, but they can also find out about websites in a myriad of ways other than via Google’s search engine. You name the advertising or marketing medium and I’ll show you where you can type www.nameofyourwebsite.com

As private companies, each of Google, the television network, and the shopping center are – and should be – free to set the terms of how a website, advertiser or retailer (as the case may be) may use their medium to gain exposure to their audience.

In turn, the website, advertiser and retailer may accept, reject or negotiate these terms. If they can’t reach a satisfactory agreement (e.g. the price is too high, the terms unattractive, etc) they are free to obtain access to their desired audience by other means.

Now, you might argue that Google has such a stranglehold over traffic to websites, and that its rules (from its search algorithm to its rules over pay-per-click advertising) are too obscure and arbitrary for your liking.

But is that a reason to regulate… or a reason to do business with Google’s competitors or use other means to generate traffic (e.g. online display advertising, joint ventures with other websites, offline advertising, and the list goes on)?

But, you might insist, Google has such a huge, targeted audience that it just isn’t worthwhile optimizing for, or advertising on, the other search engines, or using other advertising media…

So… just because a company has achieved such success that it leads the market… suddenly the government must step in and start telling the company how to do business?

What kind of precedent does that set: don’t build a successful business because if you do the government will start telling you how to do things?

Sure, the government has a role to play if a successful business starts breaking the law… but we’re not talking about Google breaking the law here. We’re talking about Google doing what all good businesses do: advancing its interests in its private contractual relationships.

Want your website to appear in Google’s search results or in its paid listings? That’s a private contract with Google that you either agree to or not.

Moreover, why is government regulation regarded as the solution to a problem that can be fixed by market forces: that’s right, a quality competitor.

This is not a situation where Google’s lead is inviolable. Sure, like any leading incumbent, Google’s leadership may be extremely hard for others to destabilize… but it can happen and it has happened many, many times before.

One need only look at how the Firefox Internet browser is making substantial inroads into the market share of the previously unassailable Internet Explorer to see how this is eminently possible.

At the risk of belaboring the point, and turning this into a rant on the virtues of capitalism, I just think that asking the government to solve a problem that can – and should – be solved by market forces will, ultimately: distort market forces, hamper the ability of businesses to operate optimally, preserve mediocrity, kill innovation, stunt entrepreneurialism, and ultimately lower our society’s overall wealth.

Until and unless someone can prove – in legal terms – that Google is misusing its market power to unlawfully inhibit competition, I say: leave Google alone. If you don’t like the company and the way it does business… if you don’t think it is transparent enough… show Google what you think by taking your business elsewhere.

Even better, come up with a superior solution.

Source: Guest Author, “The Time Has Come To Regulate Search Engine Marketing And SEO,” TechCrunch, July 13, 2009

This entry was posted on Tuesday, July 14th, 2009 at 6:15 am and is filed under Feature, Law, Online Advertising, Search Marketing, Traffic. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.