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September 2012 Policy Study, Number 12-10


The Federal Trade Commission’s Investigation of Google


Google's Incentives



Understanding Google’s business model is important because it leads to an understanding of Google’s incentives. Unless Google can attract lots of searchers, it can’t charge its advertisers fees. If the Internet searcher doesn’t like the service Google provides, she can, with the effort of only a single click, try a different search engine. That is power, and it is a power that drives Google — and all the other search engines as well — to provide the best answer they can to the searcher’s question. Providing the searcher with an inferior answer (product or service), would be counterproductive and cost Google money in the form of advertiser revenues. Google’s incentive, therefore, is to provide a search experience for its users that is better than the experience provided by any of its competitors.




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