February 6, 2004

Recent statistics indicate that within the USA Google has 32% of the share of web searches followed by 26% conducted via Yahoo, 18% by AOL and 17% by MSN, the other major players in the market.

At the same time while 76% of its own search enquiries are powered by Google technology, Google technology additionally powers search engine technology for MSN, Ask Jeeves and some other small players, giving it over 50% of the search engine market.

The search engine market is now the second most used feature of the Internet after e-mails. One of the key spin-offs from the surge in use of search engines is advertising. Search engines have boosted the flagging virility of web advertising.

They provide advertisers with a new and growing arena for getting their messages across via the web. It can enable advertisers to specifically, and in a very focused way, target their advertising.

Pricing of advertising becomes more specific and accurate. Few, if any, other media provide this opportunity. Other forms of quasi advertising revenues come in the form of sponsored links and 'paid-for placings'. Sponsored links arise as part of the search result. 'Paid-for placings' are embedded in the search engine to appear as very specific sets of search criteria are employed.

Search engines seek to differentiate themselves. Some do it technologically and this is the route by which Google has become so prominent.

Others, such as AOL, a marketing and information organisation, have used search engine technology to develop and enhance their marketing and information delivery capability. Yahoo used Google technology early in 2003 when it purchased Inktomi. This Yahoo judges to be superior, with proprietary development capabilities, which can surpass Google.

Unless Google presents itself very firmly in the marketing arena, as a marketing driven company rather than a technology dependent company there is a possibility market driven companies will, with their own technology, overtake Google's dominant position. The attraction of the prospective IPO will then begin to pale.

Story by Bob McDowall
Source: Bloor Research

        

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