The evolution and “decline” of Google's search engine?

One of Larry Page and Sergey Brin's primary goals in 1998 when they launched Google was to collect, organize, and make the world's information accessible to everyone.

Since then, the company has established itself in many areas: it developed a mobile operating system, created a mapping service, developed cloud-based applications, created its own email system, and has now also created devices and smart thermostats. However, the majority still knows the company primarily in connection with the Google search engine and uses this tool the most.

Interestingly, or rather quite logically, the original appearance of this product has changed the least. At least seemingly. The beta version before 1998 looked like this.

And this is what the search engine looks like in 2022.

The content is practically the same, only the design has changed.

What happens, however, if we initiate a search? Do we see the same thing as, say, 20 years ago? Not quite.

There are several reasons for this. But the main reason is: while at the start Google was a private company, today we are talking about a publicly traded company. One of the main tasks of publicly traded companies is to create value for their owners, that is, for the shareholders. If we break down the processes, it is logically very simple to understand why things happen the way they do.

The correct logical order of the questions:

Where does Google get most of its revenue? From advertisements.
What proportion of the total revenue comes from advertisements? More than 80%.
How can they most easily make more money at Google? By selling more ads. Or rather, by getting more people to click on ads instead of organic results.

And we have already reached the point of what we have been seeing on Google's results page continuously since 2000:

More and more paid advertisements.
Increasingly blurred lines between organic results and paid advertisements.

There are more and more ads.

While 20 years ago the first organic result was often just a few tens of pixels below the search bar, by 2022 it happens that the first organic text result is even pushed down by 1-2 screen sizes. The “real estate” above the first organic result is filled with ads (whether from Google Ads or Shopping).

What does this cause? That one has to scroll more and more to click on an organic result. Or conversely: it becomes easier and easier to click on a paid advertisement, as they are at the front and in sight.

The blending of paid advertisements with organic results.

In addition, we can observe another process. While in the early 2000s, each advertisement was well separated from organic results because it had a colored background and indicated that it was a paid advertisement (Sponsored Link), after 2020, organic results and advertisements have completely blended together.

Today, during a general Google search, it is practically impossible to tell at first glance which is the advertisement and which is the first organic result. Above, we see 4 text ads and the first organic result is the Ship Store boat and sailing shop.

While previously the organic first place could reach a click-through rate of up to 70-80%, today the maximum values seen in the 1st place are often only 20-30%. What happens to most of the other clicks? Well, they go to paid ads. Those who click on the ads further increase Google's revenue and profit.

But there are also searches where elements that push down organic results appear in combination. If we want to renovate an old window, we first see paid text ads, then Shopping ads on the right, followed by YouTube videos (which are also owned by Google), and only after that does the first text and organic result appear from Tasteful.hu the page.

Of course, there are good examples too (e.g. the meaning of lifelong learning), where Google displays scientific articles during a search or shows useful information boxes where one can quickly get informed about the topic.

But the above example also clearly shows that there are more and more SERP features, aimed at keeping as many people as possible on the search interface. And not letting them go to the respective websites. Just think that today we can also check the weather on the Google search interface. We don't even need to go to the Időkép page.

We can see live where a flight is at. We don't have to go to the airport or airline's website.

But we can also see the results of our favorite team or sport live.

The goal is simple: to spend as much time as possible on the Google interface. Not to leave it. And while we're there, to click on as many ads as possible.

The result?

Revenue from Google ads is continuously increasing. It can even rise by several tens of percent annually, which means a huge additional increase on a very high base.

Just to feel the scale of this revenue: Google generates more money annually from Google ads than the entire Hungarian economy.

It's worth digesting this once more. Google Ads revenue is higher annually than Hungary's GDP.

The vision

It is no coincidence that many are starting to sound the alarm that many tech companies are growing to a size that is becoming unmanageable. More and more people are urging the legal breakup of Google, Facebook, and Amazon to combat the emergence of monopolies. There have been several examples of this in history, just think of Andrew Carnegie's Steel Company (now known as U.S. Steel), John D. Rockefeller's Standard Oil, or the American Tobacco Company.

Google's original goal was to organize the world's information and make it accessible to people. It has fulfilled this mission. The problem for many is that in the meantime, it has gone beyond this goal and its presence is already market-distorting.

Although the basic interface of Google's search engine has not changed much, the results list and the processes happening in the background have changed significantly. Google has undergone tremendous development and growth over the past 20-25 years. And over time, this may also cause its decline. But this is unlikely to originate from within the company; rather, it will happen due to external regulatory pressures.