How important are user-generated data for search result quality?

Do search engines produce better results because their algorithm is better, or because they can access more data from past searches? We document that the algorithm of a small search engine can produce non-personalized results that are of similar quality to the dominant firm’s (Google) for certain types of search queries. Overall differences in the quality of search results are explained by searches for rare queries, which constitute 74% of the traffic in our data. We conduct an experiment, in which we keep the algorithm of a small search engine fixed and only vary the amount of data it uses as input. Our results show that giving small search engines access to more data about rare queries improves their quality. This suggests that mandatory data sharing by large search engines is a necessary, yet probably not a sufficient condition to increase competition in the search market.