PokerDude, search market share is measured on the basis of page views. That is the worst possible metric one can use but it's the metric that all the market reporting firms (Compete, comScore, Hitwise, and Nielsen) have been using for years. A couple of the firms are now starting to report "Time on Site" but that's not really useful, either.
Not wanting to get into conspiracy theory, because I believe Google did this for more than one reason, I think that users will gradually increase the number of queries they try on Google in order to compensate for the lack of discovery. Google probably has taken that possibility into consideration in making this decision.
The privacy issues are, I think, more radical.
Other possible benefits Google might see would be a gradual tendency on users' parts to move undesired listings down in their search results. Suddenly, we're all spam cops voting content down by clicking on other content.
Or we're all quality raters voting content up by clicking on "the right stuff".
Personalized Search has an advantage over general search when it comes to determining results on the basis of click-throughs: Personalized Search cannot be gamed.
In fact, Google may be able to better weed out the networks of click-inflating robots that have been trying to influence PPC advertising rates. Those networks won't be able (at first, at least) to turn off the Personalized Search and they'll keep running the same queries over and over again, never making any changes.
There is considerable potential for abuse in what Google has done, but I think this is really more a response to the abuse to which their service has been subjected by aggressive marketers.












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