Mar 292008
 

Google didn’t have a particularly good week, despite Neilsen Online reporting on Wednesday that Google continues to widen its lead in US search share over Yahoo and Microsoft. Google now handles almost 59% of all searches here, and almost 63% globally, although that number is down slightly: http://www.reuters.com/article/companyNews/idUSN1931199720080319

More important from a revenue standpoint, the growth in paid clicks has stopped. (Marc Hausman, aka Strategic Guy looks at what this means for organic SEO and PR in a good post here)

http://money.cnn.com/2008/03/27/technology/goog_clicks/index.htm?section=money_technology

Less reported in the general business press but IMO very related is a new feature from Google that presents a search box as part of the user’s search engine response page (SERP). The box potentially keeps them from leaving Google and going to a destination site. This could result in the user never leaving Google’s internet property, and therefore Google would not have to share any resulting advertising revenue. Google says it improves the searcher’s user experience. Sue Feldman of IDC, a noted search analyst, calls it potentially “hijacking affiliate revenue” in a new report. Here’s Tom Claburn’s InfoWeek piece:

http://www.informationweek.com/internet/showArticle.jhtml;jsessionid=NNDKNR2BSUYFQQSNDLOSKH0CJUNN2JVN?articleID=206905917

Google has a lot of good will in the online community, especially when you consider how much influence the company wields in online advertising. Much of that good will stems from the wildly successful AdSense program, which allows online publishers of all sizes to quickly and easily add contextual advertising to their sites. This creates a revenue stream that simply did not exist previously. If Google is perceived as cutting out the affiliate publishers, that good will could vanish quickly. 

There may be many strategy changes to come as Google grapples with the challenge of being a public company and maintaining its stratospheric stock price (down over 30% so far this year). But its founders have fundamentally changed course before. Back when they were grad students, Larry Page and Sergey Brin wrote that advertising supported search engines would always be biased towards advertisers and not serve users well. Saul Hansell of the NY Times uncovered that nugget back in late 2005:

http://www.nytimes.com/2005/10/30/business/yourmoney/30google.html?adxnnl=1&pagewanted=print&adxnnlx=1206716647-vSbEXfp/9xdAjnHAXscMhA

  One Response to “Google — As Dominant as Advertised?”

  1. Chris,

    Excellent post. There is a lot happening in the enterprise search market with vendors attempting to carve out a niche that differentiates them from Google.

    For instance, the folks at Convera have aligned themselves with trade and scholarly publishers. ISYS Search Software has done an excellent job focusing on the enterprise requirements.

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