Think of online privacy as a race.
With consumers increasingly focused on how their data and web personas are used by eCommerce and other digital organizations, regulators and lawmakers are moving to get ahead of that political and cultural wave. Payments, commerce and tech companies, meanwhile, are trying to stay a step ahead of regulators and lawmakers, and tweak or refashion their brands and reputations so they can boast about privacy protections and reduce the risk of losing profit as customers rethink their loyalties.
DuckDuckGo, the no-tracking search engine with a name that reflects a childhood play activity, intends to make the most of the ongoing privacy backlash from consumers. It has raised $10 million in fresh capital — only the second funding round for the 10-year-old, Pennsylvania-based operation — and has plans to better promote itself to a global audience, while also offering other privacy-protection technology.
It seems foolish to even fantasize about the search engine ever catching up with Google. However, in a new PYMNTS interview, DuckDuckGo Founder Gabriel Weinberg said that, in the coming year, it could end up accounting for a double-digit chunk of search activity.
His optimism stemmed in large part from the search’s engine growth: Use is up at least 50 percent over the last couple of years, with more than 5.8 billion direct search queries in total so far in 2018, compared with nearly 6 billion for all of 2017. The site’s daily direct traffic averages about 26.2 million. The United States stands as the largest source of DuckDuckGo traffic, followed by such countries as France, Germany and Canada.
Of course, Google has numbers that dwarf that: about 3.5 billion searches per day. Though DuckDuckGo does not engage in tracking the behavior and habits of consumers online, it does make its money via ad offerings based on the keywords entered by users when searching for something — just as Google does. A consumer on either search engine might type in “car insurance,” for instance, resulting in relevant ads being served up, which in turn can result in revenue for that search engine.
The difference is that DuckDuckGo stops there — it does not sell search data to third parties for advertising (which, of course, cuts out a lucrative source of revenue). The search engine does not store users’ search histories, either.
That limit stands as a big part of the search engine’s appeal in these privacy-sensitive times, according to Weinberg. The search engine, its results compiled from more than 400 sources and its own web crawler, earns revenue from serving ads via the Yahoo–Bing network and affiliate relationships with such eCommerce operators as Amazon and eBay. For each user who buys a product that originates with certain DuckDuckGo searches, the site earns a commission on that transaction.
“We are definitely small,” he said, acknowledging the obvious. However, the company turns a profit and has yet to do any major marketing. So far, DuckDuckGo has benefited from word of mouth, essays, blog postings and question-and-answer content published and distributed on Quora and social media sites, he said.
The new capital, from OMERS Ventures, a Canadian pension fund, will enable DuckDuckGo to beef up its marketing, among other areas. “We’re not sure what kind of marketing yet,” Weinberg said. “We’re running different kinds of experiments to figure out what works the best.”
DuckDuckGo last raised capital in 2011 — $3 million in seed funding. Since then, the digital landscape has significantly changed, which attracted OMERS. “Issues of privacy and security in the digital world have become increasingly topical and controversial,” the firm said in explaining its investment. “In 2018, these concerns have risen to the forefront of public consciousness. Users are becoming more aware of their personal data and are increasingly concerned with protecting it.”
DuckDuckGo aims to go beyond online searches in further building its pro-privacy brand. It recently launched what OMERS called “a mobile browser and desktop browser extension to their product mix; these products include built-in tracker blocking and smarter encryption.”
Recent data and consumer trends support that path, Weinberg told PYMNTS. Like others in the space focusing on privacy (or worried about the consumer backlash), he used Facebook as an example.
For those who’ve enjoyed the luxury of a news-light summer away from digital leashes, the story goes like this: The social media platform needs to maintain — or even win back — the trust of consumers who were either shaken by the Cambridge Analytica data sharing scandal or are just increasingly wary of sharing too much information online with a massive corporation. In fact, Pew Research recently reported that 42 percent of Facebook users have taken a break from the platform during the past year, while 54 percent of those 18 and older have adjusted their privacy settings during that time frame. Additionally, 26 percent of U.S. adult consumers said they deleted the Facebook app from their smartphone.
“Awareness is really high,” Weinberg said about online privacy, adding that the company’s own surveys echo findings that a good chunk of consumers are having second thoughts about how their data is used by digital service providers. “People are trying to figure out how to protect themselves online.”
Figuring out answers is taking on an almost existential flavor in digital payments and commerce (which is to say, most of Western daily life). A recent discussion between PYMNTS’ Karen Webster and Sunil Madhu, founder of identity verification and fraud prevention services provider Socure, dug deep into those questions, and featured a debate about how much Facebook really has to worry about and analysis of what makes a solid digital ID.
The consumer focus on privacy, and the ongoing backlash — demonstrated in part by Europe’s GDPR and other laws — is no flash in the pan, Weinberg said. This moment of privacy protection effort represents, perhaps, the best opportunity for DuckDuckGo — one that could propel it to capture 5 percent to 10 percent of searches, he said.
Historians will have to figure out and define the various phases of internet development and digital economy growth, and trying to anticipate what they will say is a fun game, but often ends up as a reckless intellectual endeavor. That said, the last few years — don’t forget the Edward Snowden NSA revelations, because Weinberg and other students of online privacy sure don’t — are shaping up as a turning point in how online consumers view privacy.
That will, no doubt, provide opportunity for a host of businesses — not just DuckDuckGo.