Exclusive preferential placement as search diversion
Subtitle: evidence from flight search
By: Benjamin Edelman, Zhenyu Lai
Contributors: Lai, Zhenyu; Harvard Business School
Series: Working paper / Harvard Business School -- 13-087; Working paper (Harvard Business School) -- 13-087
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston ]
Language: eng
Number of pages: 35
Description: We analyze the incentives for a two-sided intermediary to divert consumers to its favored destinations. Applied to Internet search engines, we investigate a diversion mechanism based on Google's exclusive award of preferential placement to its own services. Using web traffic data from a quasi-experiment involving the introduction of Flight Search, a Google travel search service, we identify and measure the impact of diverting search away from non-paid algorithmic links to competing online travel agencies. Controlling for search intent, we find that Google's differential placement of Flight Search across similar search queries led to an 85% increase in click-through rates for paid advertising and a 65% decrease in click-through rates for non-paid algorithmic search links to competing online travel agencies. As search engines increase monetization of clicks by integrating specialized services into search results, our analysis suggests that exclusive preferential placement disproportionately impacts traffic to top sites most likely relevant to users' requests.
Notes: "April 2013" -- Publisher's website.

Includes bibliographical references (pages 27-29).