A recent court filing in the ongoing legal battle between the U.S. Department of Justice and Google has shed light on the competitive landscape of the search market. The filing, submitted as Google’s “Findings of Fact,” delves into the history of search competition, innovations and developments, and the company’s own search advertising business.
Notable aspects of the filing include details on would-be Google competitors like DuckDuckGo and Neeva, as well as criticism of their approach to search innovation.
In particular, the document reveals insights about the inner workings and revenue of these search startups, as well as their exit strategies. DuckDuckGo, which has been profitable since 2014, relies on search advertising from Microsoft for its operating revenue. However, Google’s proposal suggests that instead of investing in search innovation, DuckDuckGo’s main focus is returning profits to shareholders.
The filing also highlights the fact that when DuckDuckGo raised $10 million in 2018, the majority of the money was distributed to shareholders. Similarly, when the startup raised $100 million in 2020, a portion of those funds were also returned to shareholders. This raises doubts about the startup’s commitment to improving its search engine.
However, the filing also notes that in 2018, a third of DuckDuckGo’s 50 employees were actively working on improving the search engine, contradicting the claim that the company was solely focused on profits.
Despite its profitability, DuckDuckGo lacks a “comprehensive web index” for organic search results, which does not bode well for Google’s argument. Additionally, when Apple was approached about making DuckDuckGo the default search option on Safari, the company’s SVP of Services Eddy Cue reportedly said it was “not a good choice for customers.”
The filing also highlights DuckDuckGo’s limited reach. While the startup claims to have 100 million global users as of 2021, it only receives about 2.5% of general search queries in the U.S. Similarly, in Europe, DuckDuckGo only receives 0.6% of search queries on mobile devices, despite being an option on the Android “choice screen.” Overall, the company’s percentage of search queries in Europe ranges from 0.5% to 2.5% depending on the country.
These findings serve to support Google’s argument that its search engine is preferred by users due to its quality and innovation, not just its monopoly.
The document also criticizes DuckDuckGo’s approach to privacy, claiming it leads to “significant trade-offs to search quality” by not utilizing data like search sessions and a signed-in experience. However, these claims highlight the difficulty for competitors to build a search business that can rival Google’s.
Neeva, a search startup founded in 2019 by former Googlers Sridhar Ramaswamy and Vivek Raghunathan, is another example of this challenge. With a deep understanding of search technology and experience at Google, the founders initially planned to offer an ad-free alternative to Google through subscriptions.
The court filing reveals that by 2022, Neeva had amassed over 600,000 users, but the majority were not paying customers. The startup had received funding from top venture capital firms, but still struggled to compete with the established search giant. By 2023, Neeva had to pivot to an enterprise-focused model and eventually sold to Snowflake for approximately $184.4 million in cash.
The filing also touches on Yahoo’s (parent company of TechCrunch) former search business, noting that it stopped crawling the web in 2009 after partnering with Microsoft for algorithmic search and paid ads. This allowed Yahoo to decrease its search investment and focus on other popular products. The document also mentions Mozilla’s previous deal with Yahoo, which was ultimately dropped due to search quality issues.
Overall, Google attempts to argue that it faces competition from various sources, such as dedicated mobile apps and websites, AI services, and social media. For example, Google’s Vice President of Search Liz Reid claimed that 63% of daily TikTok users aged 18 to 24 use the app as a search engine.
It remains to be seen if the court will be convinced by Google’s argument that it is not a monopoly in the search market and search advertising. However, details from the trial have already shown that Google has used its resources, such as a 2014 deal with Apple worth $18 billion, to maintain its position as the dominant search engine. But while these examples reveal the challenges faced by competitors, they also demonstrate the demand for innovation in the search market. As the search landscape continues to evolve, only time will tell if anyone will be able to successfully compete with Google.
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