Keyword searches as economic indicator

Everybody loves to look at the search terms that people type into Google and other search engines. I’m convinced that’s half the reason people wanted to write about the debacle that erupted when America Online released all those search histories, and it’s why people like to look at Google Trends and Technorati’s Buzz and all those other trackers (if only we could get a look at that giant screen in the Googleplex that scrolls real-time search requests all day long).

Markus Frind, the founder and sole proprietor of the massively successful online dating site Plenty of Fish, has an interesting theory in one of his recent posts. The post is mostly about how Markus’s site ranks compared to other international dating sites (answer: number three), but the interesting part for me was right at the end, where Markus says that searches for info on new homes correlates extremely well with real economic data such as housing starts. His theory:

There will come a time when traders, banks etc pay more attention to keyword search data then government housing stats and other economic reports that are months out of date. I predict in the next 5 years search data such as trends in search terms like “buy new home” will have major impact and move markets and reports on housing starts will do nothing.

Is Markus out to lunch? I’m not so sure. He might be overstating the case, but I think he is on the right track, and that search data will become (is becoming) an ever more important indicator of consumer behaviour, or potential behaviour. In an interesting coincidence, my friend Paul Kedrosky posted something recently on what Google searches — categorized by region — might indicate about housing bubbles (or fears of same) in the offing.


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