Yelp vs Google in Congress
Most of you have probably heard that Google will go before the Senate Antitrust Committee in a couple hours. One of the star “prosecution” witnesses is Yelp CEO Jeremy Stoppelman.
Regular readers know that in general, I’d like to see more oversight of Google’s activities by somebody & I’m hoping that these proceedings lead to exactly that. For instance, despite being a $177 Billion company, Google has outsourced tech support for Places–a product with multibillion dollar annual revenue potential–to a small business owner in Olean, NY for most of its existence. And if it continues to promote Local results to the degree it has for the past 24 months or so, its position in the marketplace demands better accountability–for both searchers AND small business owners. And frankly, I think it makes economic sense for Google to do this as well, given the vast pools of money represented by the transition of local and SMB ad dollars from print to online media, and they’ve clearly put many more resources into support as they’ve fleshed out their Local product offerings for SMBs.
But, the fact is: Places is an awfully good product for consumers these days. And if you’re a Places competitor, here is some advice:
1 Disallow Googlebot from crawling your site
2 Develop other ways of getting traffic
3 Build a better mousetrap
No competitors should be surprised that Google wants them out of their Local results. And, strange thing, Yelp is already doing #2 and #3 extremely well. At the Kelsey Group show last December, Jeremy himself touted the fact that 30% of Yelp’s traffic came from their mobile app, a number that has no doubt increased as more and more people have bought iPhones and Droids in 2011. Their review corpus is (I would say in-; others might say arguably) deeper and better quality than any other site on the web. Yelp has integrated Facebook extremely well and I think have a sustainable business model moving forward, independent of Google.
It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews.
but he immediately follows it up with an outright false and incendiary statement:
The experience in my industry is telling: Google forces review websites to provide their content for free to benefit Google’s own competing product […]
It is NOT a “false choice,” as he contends later in his testimony. No one in Mountain View is forcing Yelp to do anything. It’s been a looooonnng time since I’ve heard any webmaster complain that Googlebot was ignoring robots.txt commands.
[In 2009] services like Yelp remained better positioned than Google itself to provide the sort of information that users were seeking about local businesses […]
Really? If that’s the case, wouldn’t Yelp have had more than 2% market share in this well-cited and well-researched Comscore / 15 Miles study?
The worst kept secret in our industry is blatantly obvious in that Comscore graphic. Google isn’t nearly the dominant force in Local Search that they are in Organic, and they remain extremely vulnerable to horizontal sites like Yelp, Citysearch, and others, vertical sites like TripAdvisor and Urbanspoon, yellow pages companies, daily deals sites, online newspapers, Facebook, independent app developers, and many, many, many others. Let alone Bing’s +/- 30% market share from Organic search.
Yelp’s position in this hearing seems to be akin to a cable channel giving permission to–or even, asking–a network to show clips from one of its comedy shows, complaining loudly when the network refuses to syndicate the show in its entirety–and still not revoking permission to show those clips despite those very loud complaints.
Yelp and David Mihm, Inc. both want the same thing–more competition in Local Search. But rather than focusing on “how Google Places is bad for Yelp and other Silicon Valley business models,” his argument would have been more successful–not to mention closer to the mental grasp of the average Senator–if he’d focused on the dangers for consumers and small business owners. I thought Yelp had really matured as a company, but these arguments look mostly like sour grapes to me.
Just having read Greg’s SEL piece, I couldn’t agree more:
Unfortunately the fact that the subcommittee didn’t include any third party analysts, observers, advertisers or search marketing agencies to testify — in other words (relatively) disinterested parties — is a critical flaw in the design of these hearings. Accordingly they emerge as a kind of theater and not so much a fact-finding inquiry.
Interesting stat from Google’s response:
In fact, most of the click traffic (roughly two-thirds of clicks) from our local search result pages goes directly to small business websites, and review sites make up the next largest percentage (about a quarter of clicks). Less than 10% of clicks from our local results page go to Google Place Pages.