Search within the search
The original Matryoshka doll
You know those russian dolls that fit one inside the other in a seemingly endless sequence? These are the Matryoshka dolls. This is what I see as the future internet world order. I am witnessing a doll within a doll endless search on Google, Bing and Yahoo. I search for a hotel on google, I end up searching within Expedia. The original search engine mission was to help the consumer find things easily in the process make better buying decisions. The search engine was also helping the little business get found side by side to the giant corporation, it was the promise of a new, simpler, fairer, egalitarian world order. Small companies such as CAJ House could compete with juggernauts in the short term housing business such as Furnished Quarters and Equity Housing. The consumer would get better deals and the small housing provider could fill his/her apartments with almost no direct cost advertising.
A new doll is born
What has happened since is that Google found a way to earn billions by perfecting the advertising/search engine. Google did/does this by inserting advertisers who pay for search words and phrases on top of word searches: “adwords”. If I want to place my furnished apartments in boston in front of the clicking consumer, I can buy the search term “Furnished apartment Boston” for a few cents to many dollars per click. The consumer will find me and Google profits. The consumer ends up paying for this advertising because CAJ House rent will be higher to cover this cost. In the early days, the cost would probably end up being a few dollars added to each apartment rental. In the last few years, a new Matryoshka doll has opened shop and added new costs to the consumer.
The search within the search
Many companies have successfully inserted themselves between Google and the consumer and are now exacting fees to find what the consumer used to find on his/her own via patient searches and comparisons. Each one of these companies is specialized in his/her world of expertise. Expedia, Travelocity and Booking are now the default search engine for hotels. Uber and Lyft help you find easy transportation amongst the thousands of car owners who provide their services, Airbnb and Roomorama help you find housing among the many: CAJ House being one of them. All these sub search engines, make huge amounts of money doing little more than aggregating the providers that offer the actual service. The fees of Expedia are relatively modest: but in transportation search Uber and now housing search Airbnb are exacting enormous fees. These companies charge fees to make comparison shopping easier for all of us. Expedia and Travelocity charge 7% of hotel rates. On a three night stay that is a relatively small $50 fee. Airbnb and other short term housing search engine companies soak the consumer for little added value. A two month stay at $2,000 x month apartment is increasing the consumer’s cost of lodging by almost $300 to $400! This cost trickles down to the bottom line since the fees become a cost of doing business. As Airbnb and Roomorama inventory of housing offerings become larger, I wonder if a “new economy” model is preparing to leap with a new Matrioshka layer of fees… The new economy model seems to be moving from providing the actual service to the finder of the finder of the actual service/product.