Google looks untouchable. But is it?
The company has more than 60 percent search market share; a seemingly recession-proof business model; and it could be a long time before anyone catches up or challenges Google's dominance in the search space.
"I certainly think the game's over in terms of building a world-class search engine," says Chris Sherman, executive editor of Search Engine Land. "It's too expensive -- Google and others are literally spending hundreds of millions of dollars, in terms of research, development and infrastructure. Start-ups don't have access to those sorts of resources."
And, of course, thanks to a deal it nabbed with Yahoo last week, Google will only strengthen its market position. Under the agreement, Google will serve ads alongside Yahoo search results.
"We view [the Google-Yahoo] deal . . . as material positive developments for Google. Not only does Google win Yahoo as an AdSense partner, but it also reinforces its search superiority and buys additional insurance against any likely threat to its market share in search," said Colins Stewart analyst Sandeep Aggarwal, in a research note to investors.
Microsoft's challenges in the market are not insignificant; the brand is almost as well-loved as any insurance provider, and users don't really want to leave Google -- for the moment, anyway.
"If you look at some of the things Microsoft is doing -- image search for example -- is actually superior to Google, but [Microsoft's] challenge is that they've got to convince people to try it," Sherman says.
But for smaller companies looking to carve out a modest piece of the pie, there's room for alternative search services, Sherman argues.
"What I think we're seeing happen in search is very similar to what happened in television," says Sherman. "We had three dominant networks, and that was what people were accustomed to. They didn't really think there was an alternative, and it appealed to advertisers because they had a single source where they could reach a massive audience.
Then, all the sudden, with cable T.V., we had 500 channels, and each channel focused on a niche. It gave viewers a lot more choice and it was extremely appealing to advertisers."
There must be room for improvement: How else to explain the explosion of startups gunning for the market? Wikia Wikimedia launched its own open-source search engine last year; Russian search engine Quintura says it is "not afraid of Google." Blinkx is chasing the video search market; Powerset is pursuing after the semantic search space; and Kosmix is working on "topical" search engines.
"There is still huge opportunity for search engines," Sherman says. "Google, in my mind is really, really good at navigational search -- like, if you're looking for a specific web site. But if you're looking for a specific piece of information, sometimes it's not quite as good . . . The opportunity lies in disruptive technologies that Google probably won't develop because it's perceived as too risky."
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