In The Shadow of a Giant: Doing Business in the Google Age

Being a business on the Internet can be a tricky thing – especially when the search engine you rely on is creeping onto your turf.

This is the frustration that many web entrepreneurs are facing with search engine giant Google. As the world’s foremost Internet search engine, Google has become a central component in many would-be mogul’s business plans. Jeffrey Katz, founder of the web shopping site NexTag, has used Google’s finely tuned machine to drive his company. He estimates that his business at one point derived strong sales from a larger share of Google’s free search, somewhere in the neighborhood of 80 percent.

Google Checkout eating up others’ profits? Lately NexTag’s online media buying has grown to almost 70 percent while their free search sales have whittled down to a mere 30. The culprit? Katz isn’t one to point fingers, but he does bring up an interesting fact – that the decline in his online sales have plummeted as Google’s launch of their own shopping site, Google Checkout. Searches for products such as “living room furniture” would lead to one of several NexTag results, but those were the good old days. Katz points out that  despite increasing his advertising budget, the business of getting on Google’s coveted front page is getting tougher.

Similar experiences for other online retailers. Non-profits are even feeling the pinch from “Big G.” Local news sites such as Berkeleyside, an online news site dedicated to local news in Berkeley, California, offers similar complaints. Lance Knobel, the site’s co-founder, reveals that their temporary banishment from Google’s search results cost them dearly. Luckily for Knobel, one of his readers, a Google employee, had looked into the problem and got the news site reinstated — much to Knobel’s astonishment.

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