In his 15 years at Google, Sridhar Ramaswamy helped grow the company into the world’s most-dominant online ad business.
Advertising is now a $150-billion-a-year revenue driver for Google, thanks to its sophisticated stack of data-driven technologies that connect publishers and ad buyers in order to track and precision-target users across search, YouTube, websites, and apps.
But in 2018, Ramaswamy, then-Google’s senior vice president of ads and commerce, joined venture firm Greylock Partners to work on what he said at the time were “earlier-stage entrepreneurial products.”
His main focus now is Neeva, a completely ad-free, privacy-focused search engine that requires a monthly subscription cost to use, currently set at around $5.
At its core, Neeva is essentially the antithesis of Google search.
“I readily acknowledge that this is an awkward balance in my life,” Ramaswamy told Insider.
Neeva, which has raised $77.5 million in funding at a reported valuation of $300 million has now tested the product with around 5,000 users over the past 11 months. It’s now preparing to lift the curtain to any US-based user who wants to try the service next month, Ramaswamy said.
Neeva’s other plans include a browser and a more sophisticated, less commercialized version of text-autocomplete. On Thursday, Neeva is also announcing a pledge to share at least 20% of its revenue with publishers and other content creators who provide useful answers to users’ search queries.
Ramaswamy is banking on there being user appetite for a reimagined, privacy-focused search product that incentivizes useful results versus driving users to view more advertising. Crucially, he’s also hoping they’ll be prepared to pay for it.
Google, Facebook, and Amazon dominate the online ad market today, but Ramaswamy said the “tremendous benefits of the technological scale” they have accrued over the past decade has gone to the “shareholders of those companies, and not to you and me broadly.”
“Google search and Facebook were free for you in 2008, they’re still free for you, and it’s not going to get any cheaper — in fact, the products get worse because you put more ads on them,” said Ramaswamy, who himself at Google signed off on its move to increase the ad load on the search engine’s results page. “In a weird way, I actually think of low-cost subscriptions as the better equalizer because it forces us to keep adding value to the product and do more for you.”
The minds who architected Google’s Chrome are building an alternative browser
Neeva, which is currently available as a browser extension and an iOS app, allows users to make ad-free search queries across the web and their personal accounts, like emails and calendars.
Users can also personalize the types of results they want to see, whether that’s recipes that are quickest to cook, or choosing to view more results from fan blogs than from professional-publisher sites on big-game sports weekends.
While the exact pricing hasn’t yet been confirmed, Neeva’s subscription fee is expected to fall in the $5-a-month range, Ramaswamy said.
Neeva has big ambitions for its browser, which currently doubles up as the iOS app, having poached Darin Fisher, the architect of Chrome, and a number of other former Google engineers earlier this year to build it. Much of Neeva’s team is comprised of ex-Googlers, including cofounder Vivek Raghunathan, YouTube’s former vice president of monetization. Google’s former president for the Americas Margo Georgiadis is an investor in Neeva. More than a dozen of Neeva’s other 52 employees, advisors, and investors listed on LinkedIn have previously worked at Google, according to Insider’s analysis. Google did not respond to requests for comment.
Those engineers are working on upcoming features including a suggestion box that appears as users type that gets them straight to the correct web page without having to view the search results list.
On other search engines, “especially for commercial queries, there is a strong imperative to take the searcher to a search result page that essentially they have to browse ads before they get to search results,” Ramaswamy said.
“For us, we are all about showing you the right answer, right within this suggestion box as it is called, or getting you to where you want to go.”
Neeva is pledging to share 20% of its revenue with publishers and content creators
Elsewhere, while publishers have often locked horns with Google in recent years over being fairly compensated for showcasing their content, Neeva is baking in a revenue-share program from the outset.
Neeva says it will commit to sharing “at least 20%” of its revenue with content creators, offering payouts when their content directly answers a user’s search query. The company has signed up question-and-answer site Quora and blogging platform Medium as its first publisher partners.
A user searching for “how to view Netflix while traveling,” for example, could be served a preview panel of a Quora thread that directly answers the question. Ramaswamy said at the outset, publishers would be paid by a combination of the number of impressions they serve and the value their content drives, though the exact formula hasn’t be finalized.
The hope over time is that Neeva can match or better the average CPM, or cost-per-thousand impressions, publishers generate from ads on their websites, he said. Ads bought on Google’s display ad network typically cost between $0.50 and $4 for 1,000 impressions, according to Topdraw, a digital marketing agency.
Ramaswamy said Neeva is currently in conversations with other potential partners, ranging from big-name publishers to individual content creators like recipe authors. The service also plans to add other publisher-focused features like making it easy to subscribe to news sites directly through Neeva and a product inspired by Scroll — the subscription startup recently acquired by Twitter — that bundles together content from different publishers.
Ramaswamy believes Neeva could reach an audience of around 200 million
To be sure, Neeva faces an uphill challenge in convincing for users to pay for something they’ve received for free for decades.
While Neeva’s launch is well-timed, amid a period of increasing consumer awareness around online privacy, “building a good search engine is a huge undertaking,” said Martin Garner, chief operating officer at research firm CCS Insight.
“Apart from competition from others like DuckDuckGo, Neeva’s main challenge will be to build a big enough base of paying users to ensure it stays viable in paying out revenue to publishers,” Garner added.
Google by far and away dominates the search landscape with a 92% share of the market, according to Statcounter. Google’s next closest competitor is Bing, with a 2% share, while privacy-focused DuckDuckGo has just 0.59% of the market.
But with its subscription model and focus on privacy-conscious users, Neeva doesn’t necessarily have to compete head-to-head with Ramaswamy’s former employer.
“In the history of business there’s never been a sector that’s over $100 billion, which search is, that has one player that commands a 90% share — it’s just not sustainable,” said author and NYU Stern professor of marketing Scott Galloway, who recently made what he describes as a large personal investment in Neeva. Galloway is also an advisor to the company.
“You’re going to see, through government intervention, or innovation, market share go to other search companies,” said Galloway, who also writes for Insider. “The subscription model is such a secure business model that if Neeva captures just 1 to 2% of the market, it’ll garner 10 to 20% of the market capitalization.”
Similar to how Neeva is launching with Netflix-like pricing, Ramaswamy believes Neeva’s total addressable audience will be in the range Netflix’s current userbase of 200 million. Eventually.
“We have high aspirations but we have to earn customers one at a time — they’ve been at this for 20 years,” Ramaswamy said.