Google giveth then taketh away

Google’s test of “streaming search” not so short lived

Google has just announced its “streaming search” service, Google Instant, is coming out of limited beta testing and going live for all users.

According to Adam Bunn, head of search at independent search and social marketing agency Greenlight, when it comes to search engine optimisation campaigns (SEO), some websites may now suffer a drop in traffic. This service could also potentially result in complications for rank checking software and impact on search demand figures given by Google’s keyword tools, Bunn says.

With regards to paid search, Matthew Whiteway, director of campaign management (paid search) at Greenlight, says it could play havoc with an advertisers Google Quality Score. Whiteway also says Google’s motives for doing this must be questioned. Given the “longtail” is becoming increasingly important, with search queries, the cost-per-click (CPC) Google can charge for “longtail” keywords is significantly lower than that on one or two keyword search queries, Whiteway says. Therefore the more people search for “longtail” search queries, the less money Google can charge the advertiser, he explains.

Google’s development uses AJAX to dynamically serve search results as you type, Greenlight notes. Each time a new recognizable word or phrase is typed that changes the results set in a meaningful way, Google will fetch the search results for that word – without you having to hit “search.” So, if you’re intending on searching for ‘scary books suitable for children,’ Google might first fetch results when you’ve finished typing ‘scary,’ then ‘scary book,’ then ‘scary books,’ then finally ‘scary books suitable for children.’

Bunn says this is a mightily impressive display of processing power on Google’s part. Now, for every search you do Google may have to process anywhere from a couple to half a dozen different searches. It has got to do this fast enough to keep up with your average typing speed. This, on top of the fact that retrieving and sorting thousands of documents in a split second is already a modern marvel - admittedly one that few people spend much time thinking about, Bunn adds.

What of the impact for SEO?
According to Bunn, SEO campaigns including long multi-word keyword variants may see a drop in traffic for those keywords as a result of streaming search. Why? Users may now find something to click on before completely typing their originally intended search term (depending, of course, on Google being able to provide accurate enough results at an earlier stage in the search). Consequently, to be visible/show up in search results, it may become more important for websites to optimise for the shorter, constituent parts of longer keywords, Bunn says.

“For example, if a website has optimised for and holds good rankings for ‘cheap car insurance UK,’ that term may lose search traffic as UK users find that the shorter ‘cheap car insurance’ returns several relevant looking results, negating the need to finish their sentence,” Bunn says.

Bunn points out that the constituent parts of longer keywords are often the types of generic keywords that are typically dominated by big brands and powerful sites with the cash to maintain rankings in an extremely competitive keyword space.

“So for smaller websites, this could well be a case of first Google giveth (the 'May Day update') then it taketh away (streaming search results). We’ll have to hold tight for the exact repercussions, which could also extend to complications for rank checking software (if AJAX is involved in retrieving search results) and impacts on the search demand figures given by Google’s keyword tools (if each stage in the streaming search counts as an impression)," Bunn says.

Ramifications for paid search
In relation to paid search, the question is whether Google will count each refresh/change of the search engine results pages (SERPS) as an impression for the advertiser. While some advertisers will believe increasing the number of impressions/eyeballs that see their ad will help improve brand awareness and brand recall, from a pay per click (PPC) marketing perspective, this increase in unwanted impressions could play havoc with an advertisers Google Quality Score, Greenlight says.

“At Greenlight, we are constantly looking for ways of reducing wasted impressions for our clients with the objective being to improve click through rate (CTR) and therefore relevancy, one of the most important factors of Google’s Quality Score,” says Whiteway. “If Google is going to count these dynamic changes/refreshes to the SERP then should we also expect to see some fundamental changes to the Quality Score algorithm, the keyword Match Types, or do we simply need to increase the number of negative keywords in the account to several hundred thousand? Only time will tell.”

Whiteway says Google’s motives for doing this must also be questioned. It has been suggested that as users become more and more internet savvy, the number of keywords used for each search query is increasing, he adds. For example, users looking for low annual percentage rate (APR) credit cards historically may have simply searched for “credit cards” and then conducted the filtering process manually, whereas in recent years the “longtail” has become increasingly searched for and important, with search queries such as “credit cards with low APR” for example, growing in popularity, Whiteway explains.

So why would the “Google financiers” not like this “longtail” trend? Money, says Whiteway.

“The CPC that Google can charge for ‘longtail’ keywords is significantly lower than that on more generic (one or two keyword search queries). Therefore the more people search for ‘longtail’ search queries, the less money Google can charge the advertiser," Whiteway says. "With ‘streaming search’ therefore, Google is potentially ‘helping’ users find relevant results with less search term queries, thus increasing the number of clicks on generic terms and therefore increasing the CPC for the advertiser.”

Many would argue Google Instant is an example of Google flexing its technological processing power and helping users get results quicker, Greenlight notes. However there must also be some form of financial benefit for Google in making such a dramatic change to the way it finds and displays the results. Which explanation is true? Greenlight says we are unlikely to ever really know.

What do you think?

The Economy and Outsourcing

Posted by Mark Brousseau

Outsourcing Shops Feel the Street's Pain

Info tech spending in India by U.S. financial-services firms could shrink 15% to 20% over the next year

by Mehul Srivastava and Nandini Lakshman

DELHI As the credit crunch on Wall Street sent dominoes toppling around the globe, Tata Consultancy Services, India's largest software-services company, started tightening its belt.

Travel was restricted, electricity consumption was to be reduced, and the company considered removing Microsoft (MSFT) Office from its PCs and replacing it with free open-source alternatives, employees say.

India's seemingly unstoppable outsourcing industry is grappling with the woes of the financial firms that make up as much as half of revenues for some players. "How this plays out, who knows?" says Pramod Bhasin, CEO of Genpact, the world's largest business process outsourcing company. Although he's optimistic, he says: "The ability to predict has gone away."

HOW TEMPORARY?
Outsourcing companies have already pulled back on new office space and leases, according to Knight Frank India, a property consultant. "Their level of concern has gone up dramatically in the past few weeks with their top-tier customers vanishing right before their eyes," says John McCarthy, a Forrester Research (FORR) analyst who traveled to India twice in September to meet with jittery Indian players. "Anyone who says they aren't worried is probably lying."

In the past two months some of the biggest names in U.S. finance have gone under. Vanishing with them is the kind of work Indian software professionals have long excelled at—projects requiring mountains of coding and individual attention. In the first half of 2007, financial companies around the world handed out at least 48 major outsourcing contracts with a total value well in excess of $5.5 billion, reports researcher ValueNotes. The first half of this year saw just eight such contracts with a total reported value of $767 million. "A lot of companies are putting on a brave face and saying this is just a temporary phase," says ValueNotes CEO Arun Jethmalani. "But how temporary is temporary?"

The estimated hit to India's outsourcers? As much as 8% of total revenue could vanish, Forrester predicts, as information technology spending in financial services shrinks by 15% to 20% over the next year. India's top five info tech and outsourcing companies saw slower growth in the first quarter, and their stocks have taken a beating. TCS's annual profit growth slowed to 7%, down from 36% in 2007. The company declined to comment for this story. Infosys Technologies has warned that it probably won't see a rise in profit this year but had no further comment. Satyam Computer (SAY), the No. 4 software service provider, says it has contracts with Lehman Brothers, AIG (AIG), and Merrill Lynch (MER). Those are "minuscule parts" of Satyam's $2.7 billion in annual revenues, says Chief Financial Officer V. Srinivas. "But that doesn't mean there won't be an impact in the future," Srinivas says. "We would be kidding ourselves if we thought that."

Optimists predict the downturn will be short. They say revenues will bounce back when American business decides to be more efficient, resulting in more outsourced work. One rosy estimate, by consultancy Everest Group, projects that cost-cutting spurred by the crisis will result in a 40% to 50% increase in financial-service outsourcing over the next five years.

The Indians, though, will continue to face increased competition for those jobs. Global players such as IBM (IBM), Accenture (ACN), and Hewlett-Packard (HPQ) have grown deep roots on the subcontinent. "The crisis will make [the Indians] face the reality of doing global business," says Siddharth A. Pai, managing director of TPI, a consultant that helps companies manage outsourcing contracts. "They haven't seen the trough yet."