At barely 20 years old, search technology has profoundly changed how we use the internet, offering extensive sources of value and generating substantial economic impact.
Part of a series focusing on the impact of different internet technologies, McKinsey in 2011 examined the value of search technologies used to navigate the internet. While previous research on the topic often weighs value in terms of the high numbers of online searches performed around the world, the report casts a wider research net by aiming to better account for the more far-reaching value and benefits of search—specifically how it impacts businesses, individuals and public service entities.
McKinsey identified nine sources of search value for this analysis, including: better matching, time saved, raised awareness, price transparency, long-tail offerings, people matching, problem solving, new business models and entertainment. To assess who benefits from search technologies, 11 specific constituencies in the business, individual and public service spheres were examined. Each of these constituencies, including advertisers, retailers and consumers, among others, benefitted substantially from search. While search technology is markedly a continuous work in progress, its economic value at the time the research was conducted in early 2011 was found to be as much as $780 billion annually worldwide. $540 billion of that total was found to contribute directly to the GDPs of countries around the world, constituting between 1.2 and 0.5 percent of GDP in the five countries examined (United States, Germany, France, Brazil and India).
"A world without search technology has become unimaginable—so much so that we take it for granted and underestimate its value."
These estimates, however, are conservative, as certain measures of value like lower prices have more of an indirect impact on GDP. Search assists people in numerous manners outside of monetary terms, and can shift power to individuals and organizations with an otherwise small audience. Although at an early stage of its evolution, search’s value will only grow as businesses, individuals and public service entities continue to rely on the technology more and more. The next hurdle, McKinsey predicts, is for search to keep pace with what it helped unleash—a fast-growing volume of online content.