Google, Firefox, and the Threatening Yandex
June 11, 2012
Can an online outfit buy traffic? Yep. Should it? Yep, if you are Google and have lots of dough. Motivation is important too. Example: Surging Yandex, the ad, online payment, email, and search outfit from Russia.
Computerworld ran two stories about six months apart. The first appeared on December 22, 2011. “Google to Pay Mozilla $300M Yearly in New Search Deal, Says Report.” The main idea is that Google delivers cash; Mozilla delivers traffic. No big deal because the tie up was an extension and would be valid for three years. Pay to play is a big deal. Buying traffic is what makes search engine optimizers’ and ad execs’ hearts go pitter patter.
The second story appeared on June 10, 2012. “Mozilla Dumps Yandex as Default Search for Russian Firefox.” The subtitle was “Last year’s $900M global deal with Google forces Mozilla to swap search engines.” Hmm. So where did the extra $600 million come from? What’s the reason behind dumping Yandex.ru search for Google.ru search?
Can money buy traffic? Yes, it can. The Firefox deal explains this and shows the value of eyeballs.
Perhaps Yandex is more than a footnote in the search expert’s write ups? Maybe the Yandex folks are mounting a significant threat to the Google?
My view is that Yandex is a potential problem for Google and not just in Russia. The company has bright engineers. The company owns a chunk of Blekko which keeps getting mentioned as a useful search system by failed webmasters, azure chip consultants, and the odd blogger here and there. I like Blekko, and I really like Yandex.
What’s going on is one of those “predictive” management moves for which I admire Google. Like the two share play triggered in my opinion by rising costs and softening ad traffic to revenue ratios, Google senses warning lights with regard to Yandex. The system sucks up ArnoldIT content and puts some of it in its Russian language index and some of it in its English language index. Go figure. The only link I have with Russia is a distant relative who could add and subtract pretty well. His name, God rest his source, was Vladimir Ivanovich Arnold, best known for his Kolmogorov-Arnold-Moser Theorem. At least my uncle did not do the long distance swimming in cold lakes that Kolmogorov used to jump start his thinking. Arnold’s just sit and contemplate nature.
What I want to capture is that Google is taking steps to maintain a grip on its Russian traffic. Like China, Russia poses a challenge to some online companies. Google muffed the bunny in China, and Russia was not cooperative when it came to Google’s space travel adventures.
My hunch is that even though Firefox is not the powerhouse it once was, Google wants to make sure it keeps what Russian traffic it has and get more if possible. Chrome does not seem to be enough.
I find the pay for traffic actions of Google and the whole Panda Penguin exercises interesting. Are they two sides of the same coin? My thought is that more traffic centric plays will be forthcoming. The impact of mobile search is going to pose a high hurdle for certain companies when it comes to maintaining online advertising revenues.
A downturn could cause the cost curve to blast through the revenue curve. Like Amazon, Google has to balance costs and revenues. Each company is making quite interesting moves despite their apparent lock on certain markets. Locks can be broken.
Stephen E Arnold, June 11, 2012
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