'Death sentence': Australian businesses damaged during lockdowns could face another hit if Google Search leaves, analysts say

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  • Local businesses damaged during the coronavirus pandemic would likely struggle if Google Search left Australia, analysts warn.
  • IBISWorld says restaurants, hairdressers, and some tourist accomodation could lose the ability to reach local customers through ads placed on Google Search.
  • Google says it is prepared to remove Search from Australia if it is forced to pay news publishers for links under the proposed News Media Bargaining Code.
  • Visit Business Insider Australia’s homepage for more stories.

Local businesses devastated by a loss of revenue during the coronavirus pandemic could face a “death sentence” if Google Search is withdrawn from Australia, warns market research firm IBISWorld.

In a new release, IBISWorld senior industry analyst Liam Harrison states restaurants, caravan parks, and hairdressers saw their revenue decline when COVID-19 lockdowns took hold – and those industries often advertise with paid listings on Google Search, meaning its departure from Australia could stop those businesses from reaching local customers.

“A lack of visibility on Google can be an economic death sentence for small businesses,” Harrison said, “as Google Search is often a key way to attract customers outside the immediate local area and can represent one of the strongest avenues for growth.”

Fears over Google Search’s departure stem from debate over the proposed News Media Bargaining Code, which would compel internet giants like Google and Facebook to pay Australian news publishers for the links hosted on their sites.

Google Australia opposes the proposed legislation in its current form, with chief Melanie Silva saying the company is prepared to remove its flagship product from the local market as a last resort instead of comply with the “unworkable” new laws.

The federal government has thus far swatted away Google’s concerns over the bill.

And Microsoft, which operates competing search engine Bing, has publicly announced it would comply with the proposed legislation if asked.

Microsoft – which is currently not subject to the draft legislation – would “ensure that small businesses who wish to transfer their advertising to Bing can do so simply and with no transfer costs,” the company said in a statement last week.

“We recognise the important role search advertising plays to the more than two million small businesses in Australia.”

But IBISWorld states there would be considerable costs for small firms looking to optimise their advertisements on Bing.

And with the possibility of Google Search returning to Australia under reworked legislation, there are no guarantees in buying ads on an overshadowed competitor.

Those concerns mirror the sentiment of some search engine optimisation (SEO) experts, who believe small businesses could be “wiped out” if Google Search exits the market.

SEO firms are preparing for the possibility of Bing or competitors like DuckDuckGo building market share, and are advising clients to consider a Search-free Australia.

But with IBISWorld claiming Google controls 41.6% of the online ad market, SEO gurus and online marketers would have their work cut out for them in the event of a Search exodus.

The Senate committee overseeing the draft legislation is set to table its findings in parliament on Friday, February 12.

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