Remember when eBay published a study
in 2013 that showed Google paid search didn't work, and the following year Google punished eBay
for its SEO practices? The LA Times
has a story today that sheds more light on the study and reveals more about one of the economists behind the research, Steve Tadelis.
At the time, the ecommerce and SEO industries were abuzz about the findings. Companies were spending a lot of money to get their listings in front of Google searchers through AdWords - could they all be wasting their marketing dollars?
Today's LA times writes of the research:
"The results were clear: For eBay at least, Google search ads weren't doing much for sales. People bought things in much the same numbers with or without ads, finding their way to the site by clicking on the "natural" listings that come immediately following the paid ones, or by going directly to eBay's site without using a search engine at all."
But fast forward to 2014 and eBay no longer showed well in natural search - Google penalized eBay for its SEO practices. The economists' premise relied on the existence of natural listings, and even today eBay is struggling due to the 2014 Google penalty.
It's hard to determine how much of the decisions by these Internet giants were based on objective data and how much were based on management fear and bias. For example, there were allegations
that Meg Whitman (who left eBay in 2008) had threatened to pull Google advertising if it entered into eBay territory (which it did through Google Shopping and Google Checkout.).
Would eBay have pulled back as much on Google paid search if Google hadn't begun competing with eBay?
Would Google have penalized eBay in search results if eBay hadn't cut back on Google paid search and publicized its research findings?
The title of the today's Op-Ed in the Times is, "How we all became lab rats for American corporations and theoretical economists."
Online merchants may not feel so much as lab rats as pawns in a game of chess between eBay and Google.