State of the Brand :: by Jason Voiovich

A weekly discussion of how branding affects the world around you.

Google’s crumbling credibility

Posted on | February 28, 2011 | No Comments

Author:
Jason Voiovich
Email: jasonvoiovich@gmail.com

Key Points:
1. Google search results are so gamed these days that it’s rare you would find anything of value from a brand or information source you didn’t already know existed.
2. The more comfortable people are finding their information directly from the source, and the more powerful those brands become, the less relevant Google search becomes.
3. This is a huge deal for the company: Most of Google’s value is intangible, meaning it is highly susceptible to crises of confidence.

Google search results mean next to nothing to me.

In fact, they’ve meant very little to me for several years now. As much as I hate to take a position antithetical to everything new and webbish, it’s the truth. Let me explain. I want you to ask yourself, when was the last time you searched for something (anything) on Google to which you already didn’t have a pretty good idea of what you wanted to find?

Let’s use a few examples to illustrate my point.

Scenario 1: You want to reconnect with a colleague from your first employer, but haven’t seen heads or tails of that person for over 10 years. You might search for his name, but you know you’re going to end up on LinkedIn.

Scenario 2: You’re interested in seeing the Friday night specials for Cafe Lucrat in Minneapolis, but you can’t remember the web address. You might search for “Cafe Lucrat” on Google, but you’re using the service like a virtual yellow pages. You want the Cafe’s site.

Scenario 3: A colleague in your graduate school class made a reference to the new Apple OSX Lion, and you want to read the buzz. Google may spit out hundreds of thousands of results, but if you’ve got geek cred, you’re headed over to slashdot.

In none of these cases are the so-called “top search results” likely to cause any change in behavior. Why? You know what you want; you’ve been influenced by those brands from other media. And most importantly, because you know the top results from Google are usually bullshit.

That’s not to say they are correct, or incorrect, they’re just plain bullshit. Search engine marketers of all stripes have gotten so good at gaming the system that you are much more likely to find “content farm” websites (full of meaningless ads, of course) than you are anything useful.

You know it’s true. Do yourself a favor and try an experiment. Search for your own name. After links to Facebook and LinkedIn (if you have those accounts), if you’ve ever been part of a press release, you’re likely to find literally dozens of results from websites that bear no semblance to useful information much less relevance to anything that matters to you. You’re probably as good at filtering out that junk as I am, and don’t even pay attention anymore.

But to Google, relevant and timely search results are the key reason it exists. Without them, it’s entire premise is called into question. Yes, I understand Google is much more than search. But that’s the undisputed core of its business, and the reason it’s one of the most powerful companies on the planet today.

It should come as little surprise that Google announced last week that it is re-engineering its search algorithm (the tech equivalent of its secret sauce) to root out just this kind of foolery. But this is like switching the hiding place of the dirty magazines – your teenage boy is “motivated” to find them. Search engine marketers have staked their entire business on cracking these codes – they will find a way. It’s only a matter of time. Even though it’s latest effort seems to be working (for now), I am afraid Google can’t stay ahead of the gamers for long.

Just how big of a deal is this?

Let’s do some fun comparative math. (Stay with me, it’s easy stuff.) Google’s market cap stands today at roughly $196 billion. That’s it’s share price multiplied by the number of shares outstanding. In other words, that’s what the marketplace has deemed the company is worth. But when we look at its actual worth, we need to look at a different number: Assets minus liabilities. If you do that, you get a number shy of $39 billion. That means 80% of Google’s value is measured purely on its perceived value, not its actual value.

If you run this trick on most companies, you’ll find something very similar. The market is all about perceived worth, and that’s why swings in valuation can happen so frequently.

But I would argue that a company like Google is more at risk from a crisis of confidence that most others. If we compare Google to, say, Apple or Microsoft, Google actually produces very little of tangible value. Apple and Microsoft – quite a bit.

If what Google does produce is suddenly perceived as less than valuable, I think the multi-colored giant is in big trouble.

In other words, unless they want to go the way of the last great collector of information (the yellow pages), they should get busy fixing that part of their business.

Related Links:
WSJ: Google Revamps to Fight Cheaters

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Jason Voiovich
director_corporate marketing, Logic PD
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