from The Internet-is-a-rather-dynamic-place department
We talk a lot these days about competition and antitrust, and the narrative of the last few years is that four companies – Facebook, Apple, Amazon and Google – have pretty much sewn up the entire internet market, and no newcomer will be able to never succeed. Of course, we continue to see this argument challenged by reality. First of all, for a while people used to include Netflix in this list, but over the past few years Netflix has faced competition from all sides and is now in trouble. On the social media front, TikTok has certainly shown that it’s possible for other entrants to get really big, really fast, even if Facebook wants to kill them. And, of course, practically every month now, we hear about this or that. new social network which is gaining traction, especially among younger generations who don’t trust Facebook.
But, on search, we were told there really couldn’t be a new entrant, since Google has such control over the market. Sure, Bing is there, and DuckDuckGo has carved out a pretty healthy share of the market.
However, perhaps most interesting to me is how I keep hearing about new entrants to the search market. Last fall, privacy-protecting browser Brave announced that it launched its own search engine, for example. However, over the past few weeks, I’ve also heard of two other new search engines. First of all, Russ Roberts interviewed former Google director Sridhar Ramaswamywhich recently launched the new search engine Neevawhich appears to be a search engine with a freemium model that not only promises no tracking (à la DDG), but also no ads already.
Last year the company raised $40 million from two major venture capitalists, Sequoia and Greylock, which again flies in the face of the narrative that VCs won’t invest in these spaces. In just four months since the site launched, it has half a million monthly active users. It’s quite small, but it’s still a starting point.
Then, around the same time I heard about Neeva, I discovered another one new search engine, called Yeah (I wonder how much this domain costs!). Yep just launched a few weeks ago after major search engine optimization company Ahrefs spent an apparent $60 million to build it.
With Yep, their attempt at differentiation is (like so many others) no tracking of personal information, including search history, and then a weird “profit sharing” model, in which they promise to share 90% of the profits ads with content publishers. I’ll be honest: I don’t quite understand what that means or how it works. First of all, it seems unlikely that they will make any short-term (and possibly longer-term) ‘profits’, so is this just a future promise?
And, second, how will they (1) keep track of which content providers they owe money to and how much, and (2) connect with those content providers to give them money. The company’s “assumption” is that it would fund a ton for Wikipedia:
“Let’s say the biggest search engine in the world makes $100 billion a year. Now imagine if they gave $90 billion to content creators and publishers.
Wikipedia would probably earn a few billion dollars a year from its content. They could stop asking for donations and start paying a living wage to people who polish their articles.
There would no longer be a need for paywalls and affiliate links, so publishers who had to resort to chasing traffic with clickbait articles and filling their pages with advertisements could go back to doing surveys and analysis of quality. A citizen journalist who uncovers corruption as part of a full-time job could be compensated without having to spend time trying to monetize the content.
Again, it’s not at all clear. How do they track this? How do they prevent tampering with the system? Hell it’s a seo company they know everyone is trying to game search engines to get a indirect benefit to. When you switch to cold, ringing silver, I imagine it will get worse. Maybe people at the company think their experience with SEO will help them spot players, but that’s quite a challenge.
So, yes, none of these can succeed. Both seem to have big challenges ahead. But I’m generally fascinated by the idea that despite the narrative about how it’s so impossible to build a search engine that there is “Venture Capital Kill Zoneswhere no VC would invest – and that includes research.
Yet, right here, in a week, I discovered that roughly $100 million was being spent building two separate competing search engines, both with at least some plans to differentiate themselves in the marketplace.
The Internet is incredibly dynamic. There may be policy options to increase competition, but it’s hard to argue that some companies have dominated the field so much that no one dares even try to create competitors anymore. They seem to be happening all around us.
Filed Under: competition, investment, kill zones, research, search engines, vcs
Companies: google, neeva, yes