A significant share of advertising revenue generated by written digital content, both directly and indirectly, drops into the pockets of one organization: Google.
The company draws from the value pot with both hands, making billions from the ads in its search listings (which are populated with material scraped for free from the web) and earning a commission on the placement of ads on the content itself.
The dearth of competition across search and digital advertising means Google is effectively free to set the price. As a result, “monopoly rents are being imposed upon every website that is ad-supported”, in the words (opens in new tab) of US Senator Mike Lee.
When the market dynamics are framed in this way, it’s hard not to conclude that publishers and other content creators are getting a raw deal. But there are those that believe this doesn’t have to be the case.
SEO company Ahrefs is developing a new search engine called Yep, built atop a proprietary index wholly independent of Google, which is designed to redistribute advertising profits in a more equitable manner.
For every dollar in advertising revenue generated by Yep, Ahrefs promises to divide $0.90 between the creators of the content that makes up its listings.
“We want to offer a search engine that provides privacy for users and profit-share for content creators as a monetization opportunity,” said Dmytro Gerasymenko, Ahrefs CEO, in conversation with TechRadar Pro. “Creators who make search results possible deserve to receive payments for their work.”
The argument is undoubtedly a compelling one, but there remains one small matter to be taken care of: overhauling the internet’s most dominant company.
The theory
Ahrefs first began to develop its own search engine in 2019, guided by two core assumptions: that the economics of the web are broken and, second, the situation cannot be remedied while Google remains unchallenged in search.
The primary objective is to redress the balance of compensation in favor of the creators of digital content, who Ahrefs believes are earning too little from their product. Under the current system, “it’s almost as if the back-of-the-book index has become more valuable than the book itself,” quips the company website.
However, there are multiple potential side-benefits of the revenue sharing system too. For example, the increase in profit margin would open the door to a range of niche content types that are not currently viable, Gerasymenko says.
“On YouTube, some profit is shared with content creators. A lot of media would not exist if this system were not in place,” he told us.
“We realized that the internet is missing a big chunk of content that could have been created if Google had been sharing advertising revenue with creators.”
Separately, the Yep system may go some way to addressing the dangerous side-effects of the ad-supported model, which has played a role in polluting the information landscape.
Because the revenue of ad-supported content creators is tied closely to the amount of traffic they can generate, they are incentivized from an economic standpoint to misrepresent or overstate the value of their content. The result: clickbait and misinformation.
Although Gerasymenko did not comment on this aspect himself, it follows that affording publishers a new avenue through which to generate revenue might limit the extent to which they feel pressured to chase clicks.
Typically, when challenged on the negative effects of the ad-supported model, stakeholders like Google have gestured towards the benefits from an inclusivity perspective. Without ads, online content currently available for free would have to be pay-gated to remain viable for the provider, the argument goes.
Google declined to comment on the record for this story, but a spokesperson told us on background that the company believes ads are essential to a healthy internet ecosystem in which all participants have access to information, no matter their financial status.
The spokesperson also noted that Google is committed to showing relevant advertising only and that the majority of results pages over the last number of years have not featured ads at their summit for that reason.
As evidenced by new antitrust action on both sides of the Atlantic, however, people are beginning to question whether justifications like these for the company’s dominance across the digital advertising chain can really be said to hold water.
The reality
Although the motivations driving Ahrefs’ search project are laudable and the logic sound, the concept begins to fall apart somewhat under scrutiny.
One of the main problems is that the product does not yet exist. Ahrefs is nowhere near ready to implement its revenue sharing model, partly because the search engine is yet to generate its first dollar in advertising revenue.
An Ahrefs spokesperson told us the focus is currently on improving search results to a level that is “satisfactory in terms of our estimates of quality”, and only then will the company turn its attention to the practicalities and logistics of the revenue sharing system.
“Right now our algorithm works well for short queries, but we still have to improve longer queries. We also want to have images, news and video,” added Gerasymenko.
“The project itself is difficult; there are just a few companies that really do search algorithms. Most get results from Bing or Google, but what we’re doing is indexing the information ourselves, which is difficult and takes time.”
Until Ahrefs can improve the quality of its product, Yep will attract neither users nor advertisers. And until the revenue sharing concept can be put to the test at scale, it will be difficult to assess whether the generous 90:10 split is sustainable in the long term.
Separately, to achieve the level of transformation Ahrefs is hoping for, Yep would have to become one of the most widely-used search engines in the world. Until publishers can be sure that the new model represents a reliable source of income, it would be foolhardy to discard traditional forms of monetization.
But as demonstrated by Google’s behavior in markets ranging from web browsers to devices and operating systems, the company has no intention of conceding its search monopoly any time soon.
Adding to the complexity is the need to identify which websites and creators are worthy of compensation under the revenue sharing scheme; in other words, the need to inject fairness into the process.
In the earliest stages, the plan is to share revenue with a few hundred smaller websites, because otherwise the pool of cash will be too insignificant to make a material impact.
Once the service is better established, the idea is to deploy some form of automated system for determining the appropriate division of compensation, but that’s about as specific as it gets. Until then, it will be down to human judgement.
The simplest way would be to apportion compensation based on the number of visitors that land on each website via Yep search results. But in this scenario, the race for clicks would begin all over again.
Sink or swim
It was a risky move to go public with a new vision for the search engine with practically none of the specifics ironed out, opening Ahrefs up to more questions than it is currently able to answer.
As a company whose main business is helping website owners improve their Google Search rankings, Ahrefs also risks falling foul of one of life’s most useful rules: do not bite the hand that feeds you. In a world in which there are multiple widely-used search engines, helping customers optimize for SEO becomes less straightforward.
However, asked to account for each of the challenges the new venture faces, Gerasymenko remained unshaken in his belief in the value and importance of the idea.
“I know it can work at scale,” he told us. “The problem for us is to go from zero to the scale at which the idea starts to make sense.”
In some respects, Ahrefs has time on its side as it wrangles with this problem. The company claims to be able to prop up its search project mostly with resources it would already expend in its regular activities in the SEO market, meaning additional overhead is minimal.
Ahrefs will also hope that new antitrust legislation will offer a helping hand, limiting the extent to which Google can wield the depth and range of its product suite to prevent challengers from gaining momentum in search.
One might be justified in asking whether Ahrefs has fully internalized the enormity of its task, to overhaul the internet’s most dominant company. But then, the status quo is only ever redefined by dreamers.
