Lisbon For many years, Sridhar Ramaswamy has stood on the stage and told the opposite of what he now has to say. For example, five years ago in Las Vegas: Thanks to Google’s advertising-based business model, consumers are better informed about companies and products, he said at the Money20/20 conference: “And we as consumers make informed decisions about what we buy.”
At the Web Summit in Lisbon, it almost sounds like he’s about to apologize when he says: “People change.” He changed his mind about the advertising model.
Sridhar Ramaswamy was responsible at Google for turning the search engine into a money machine. In his more than 15 years with the US technology group, he made it to SVP Ads & Commerce.
In other words, he was responsible for advertising in the search engine, for advertisements on YouTube and for Google Analytics, the tracking tool that advertisers can use to understand the effectiveness of their advertisements. You can also say: he managed everything at Google that, according to his current view, has no place in a search engine.
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At the beginning of 2019, Sridhar Ramaswamy founded Neeva together with Vivek Raghunathan. There should be no advertising in their search engine of the same name. It should offer its own table of contents (index) for the Internet and be so good that people pay five dollars a month for it.
More and more people struggle with business models financed by advertising
“We are motivated by the desire to develop a really simpler and better product,” said Ramaswamy in an interview with Handelsblatt on the sidelines of the Lisbon technology conference. The founding principles are fundamentally important for this: Neeva is and will remain an advertising-free, data protection-safe search engine that is paid for by the users. “That is non-negotiable.”
More and more people struggle with business models financed by advertising such as those of Google, Facebook and Tiktok. Probably the most common reason: data protection. Businesses need to gather a lot of information about users in order to show them the exact advertising messages that get them to click and buy. It is noteworthy that Sridhar Ramaswamy counts on this group as the first user – but firmly believes that his product will soon convince many more people.
“Different business models can lead to different forms of innovation,” says the ex-Google manager: “With Neeva we can offer a range of things that Google would never think of.”
He can already present an example: If you start typing in the input field at Neeva, the search engine immediately suggests Internet addresses, for example amazon.com. “Google would never do that because it would lose a lot of money,” says Ramaswamy. Google only earns when users get past advertising.
Almost 70 million euros collected
At Neeva, users looking for products should also get more reliable information, for example through test reports. “Users can trust us because they pay us to only work for them,” says Ramaswamy. In the shopping area, he also has a kind of price alarm in mind that informs the user when the best time is to strike online shopping. And when users search for travel destinations, they want to show them more pictures. “You can earn more money with text,” he says – but if you are looking for a holiday home, you want to see what it looks like there.
But all of that is still a long way off. So far, Neeva is still free of charge in a test phase – and only available in the USA.
The two Neeva founders are not the only ones who consider the payment model to be a better basis for a search engine. The Berlin start-up Xayn, which emerged from a research project, is also building a search app that is to be financed in the long term through paid functions.
Founder and CEO Leif-Nissen Lundbæk wants to build a search engine that is highly personalized on the one hand and complies with data protection regulations on the other. This is made possible by the approach of decentralized learning, in which the processing of personal data takes place exclusively on the user’s device. For the next development steps, the company has raised ten million euros from venture capital investors.
Neeva is even further there. It has raised almost 70 million euros from well-known investment firms. The money comes from Sequoia and the venture capital company Greylock, which was founded in 1965 and which Ramaswamy joined as a partner after leaving Google three years ago. The company’s best-known investments include Facebook and Instagram, the crypto trading platform Coinbase and Aurora, one of the most hyped companies in the field of self-driving vehicles. The advisory board of Neeva includes the LinkedIn founder Reid Hoffman and the former Google America boss and ex-CEO of the genealogy company Ancestry.com, Margo Georgiadis.
Other managers move from Google to Neeva
In addition, Ramaswamy convinced a number of experts to join the Neeva team, which currently has around 65 employees. Udi Manber, for example, who has already been described by the Wall Street Journal as a “search genius”. Among other things, he headed the search department at Google for eight years and previously founded Amazon’s A9 lab, in which search and advertisement technologies are developed. The ex-Google division manager for the Chrome browser, Darin Fisher, switched to Neeva at the beginning of the year after 16 years at Google.
Ramaswamy knows that such hiring successes annoy his former employer. Just like his public appearances like now at the Web Summit, where he also talks about the disadvantages of Google’s advertising business.
“Some people are not happy that I started Neeva,” he says. “It’s not about individuals or individual companies, it’s about principles,” he says. “And I just don’t think an advertising-based business model is good for society.”
How far he will get with his own approach cannot be said despite the first successes. “It’s hard to get any attention when you’re actually trying to outdo a two billion dollar company,” he says. Many before him have failed.
In addition to the high expectations of investors and employees, he puts himself under the most pressure, says Ramaswamy. And he set high goals internally, to which he only wants to say so much: “We have to gain a few hundred thousand active users next year, some of them as paying subscribers. And we have to offer our services in Europe. ”
After all: Ramaswamy doesn’t have to outdo Google either way. Thanks to the subscription model, Neeva can become a large company with a small market share.
More: These new search engines want to compete with Google