Google Customer Satisfaction Drops to Yahoo! and Bing Levels

Google Inc. (NASDAQ: GOOG) may have the dominant search engine in the United States, based on its market share, which generally is posted at between 60% and 70%. However, on a customer satisfaction level, it does no better than Yahoo! Inc. (NASDAQ: YHOO) and Microsoft Corp.’s (NASDAQ: MSFT) Bing. The new data should give the two laggards some hope as they struggle for market share, unless people do not allow customer satisfaction to change their preferences.

The new American Customer Satisfaction Index (ACSI) E-Business Report shows:

E-business — which includes portals and search engines, social media, and online news and information websites—drops 3.9% to 71.3 on ACSI’s 100-point scale. Research suggests that the proliferation of advertising is diminishing the customer experience, especially among search engines.

Google’s score dropped from 82 in 2012 to 77. That approximately matches the 76 figure posted by Bing and Yahoo!

The explanation for the Google trouble is largely the fact that it carries such a large amount of advertising compared to Bing or Yahoo! That finding is mixed as far as the laggards are concern — more satisfaction, less money. Foresee analysts who reported on the ACSI wrote:

“Advertising may be the necessary evil of e-business,” said Larry Freed, president and CEO of ForeSee. “Most e-businesses begin as a free service to gain traction with consumers and increase market share, but eventually they need to find a way to monetize their business. Unfortunately, consumers generally perceive the increase in advertising as detracting from their online experience.”

“From 10,000 feet, the erosion of customer satisfaction with e-business suggests that the sector will have a bumpy road ahead. But the battle for customer preference is playing out at the customer-level,” said Claes Fornell, ACSI founder and chairman. “Companies that can find a way to make money without compromising the customer experience will please both its users and investors.”

Management at Google likely will take the information with a grain of salt. Mighty efforts by Microsoft and Yahoo! have made no market share inroads. Google users may hate the ads, but they love the product.