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Redefining the Search Scenery
By Jim Hedger, StepForth News Editor, StepForth Placement Inc.
January 25, 2006
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As expected, the roll out of change in the world of search is proving
to be highly disruptive. Though the year is only three weeks old, noticeable
shifts are occurring among the largest search entities and throughout
the search marketing sector, making the scenery much different this month
than it was just a few short weeks ago. These are among the most interesting
times on the Internet as the largest players are positioning themselves
to take their unique and collaborative runs through the year of global
convergence.
For those interested in search marketing, a number of things will soon
be different, most notably, our assumptions about the state of competition
in the search sector. The three-way race between Google, Yahoo and MSN is,
for all intents and purposes, over.
Yesterday, Yahoo’s chief financial officer, Susan Decker, suffered
the embarrassment of producing a poorly paraphrased quote. She made a simple,
clear and brutally honest statement agreeing with a reality everybody else
already perceived. It wasn’t as much what she said.
Decker acknowledged in an interview
with Bloomberg News that Google has
a much larger share of the global search market than Yahoo does and that
the gap is not likely to be bridged anytime soon.
"We don't think it's reasonable to assume we're going to gain a lot
of share from Google," Decker said. "It's not our goal to be No.
1 in Internet search. We would be very happy to maintain our market share."
The comment left some questioning Yahoo’s long-term commitment to
excellence and innovative search technologies. The attendant controversy
stems in part from the way she chose to state the obvious but also in part
from a public perception that Yahoo has not fully defined its place in the
search sector. That three-way race metaphor wasn’t working anymore.
Google dominates today’s versions of search and both Yahoo and MSN
are prepared to admit it. In short, the recent past and the persistent present
belong to Google. For its formal rivals, the only place to look is the future.
Time is accelerated, often to the point of pointlessness in the tech world
and that future is already functioning online. It is just waiting mass user
adoption.
The interview was conducted last week, just after Yahoo released fourth
quarter financial results that, while wildly profitable, were seen as mildly
disappointing by investors. Wall St. appeared to be expecting Google-sized
gains from Yahoo, results even Google will have a hard time matching when
they release their Q4 numbers next week.
As for the search marketing community, Yahoo actually delivered good news
that was buried beneath Decker’s first quote. Yahoo’s CFO was
also quoted saying, "We have held our own, and we should gain revenue
share in the industry as we roll out these new initiatives. Our goal has
been to hold our share and to be a leading, if not the leading, total marketing
platform, which would include both brand and search."
Yahoo is improving its Yahoo Publisher Network and is almost ready to bring
it out of beta. The YPN is a live experiment in online publishing built
on the idea that an increasing number of individual web users will help
funnel large amounts traffic based on shared interests.
Meanwhile, Microsoft appears to have been badly affected by losing the
AOL deal to Google. It is almost as if Galileo’s law of inertia is
applied in double doses in the Pacific Northwest. Very little search related
has moved forward from Microsoft over the past year though they do maintain
a relatively good search engine.
A year ago, Bill Gates told the world it hadn’t seen anything when
it came to search. MSN search had just introduced its own algorithmic search
engine and was ready to challenge Google. Nine months ago, Steve Ballmer
noted MSN search was going to produce much better results than Google.
Six months ago, Microsoft reorganized its management structure to streamline
integration between its software and Internet services divisions, challenging
Ray Ozzie to bring it all together. Three months ago, Ballmer was said to
be throwing chairs in a fit over how badly Google was beating Microsoft,
notably around hiring and retaining talent.
A year later, the search results at MSN are pretty much the same and they
still haven’t introduced a search-advertising product to compete with
Google’s. Again, Google virtually owns the space.
In the face of Google’s dominance, Microsoft is looking inward both
figuratively and literally. The reorganization of its management system
in the autumn of 2005 was the first clue to how Microsoft is preparing to
redefine itself in relation to the search sector. Gates’ comments
at the Consumer Electronics Show earlier this month mark the second.
Microsoft is retrenching behind the operating system right now. While it
is working to release its paid advertising program adCenter by the summer,
much of its efforts are said to be going towards finally shipping the new
Vista OS, with a number of search and e-commerce tools included.
Google’s dominance of today’s version of search is absolute,
a big problem for Yahoo and MSN even as they look forward to an expanded
search environment. Search is the primary way to access information on the
web and in order to stay in business, Google’s rivals need to segment
the concepts of search and find ways to excel in specific areas while Google
overshadows general search.
The next few months are going to seem like a waiting game until the bevy
of new products already introduced or soon to be introduced, (and user adoption
of those products), begins to change the way searchers look for information
and results are compiled. There is going to be a lot more stuff available
to the common searcher and a lot more sources to draw from.
Yahoo is thinking outside the box by inviting users to create their own
media environments in order to facilitate distribution of pay-per-use content
(TV, music, movies) and pay-per-click advertising.
MSN is again looking inside the box with its newly revised focus on Vista.
It hopes to erase the lines between the user, their computing device and
the Internet by integrating search and search related products into commonly
used software packages.
Google will continue being Google. As long as it continues to build on
its membership driven services and produce better than adequate search results,
the general public is likely to continue using it more than any other search
engine.
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