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Online File W8.1 Google and Company: Advertisement and Search Engine Wars - page 4 / 20





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Part 4: Other EC Models and Applications

Online File W8.1 (continued)

What is ahead for Google? Financial observers have noted that although its roots are in search engine technology, its revenues and profits are in sponsored advertising, the same as portals such as MSN and Yahoo! (Munarriz 2004).Will further expansion by Google into new territory dilute its search engine reputation, brand name, and profits? Or are these moves necessary to assist in its inevitable evolution into a portal? What business is Google really in? The answers to these questions will determine Google’s next moves in the Internet marketspace.

According to NetRatings Inc., the market share of the major search engines (advertising revenue) was as follows: Google 53.6 percent, Yahoo! 19.9 percent, MSN 12.9 percent, AOL 5.6 percent, and Ask.com 1.7 percent. Both Google and Yahoo! are slowly increasing their share at the expense of others (Nielsen NetRatings 2007).

Here are some facts about the two main rivals:

  • 1.

    Google is a crawler-based search engine; Yahoo! is a human-powered directory.

  • 2.

    Google dominates search; Yahoo! dominates content.

  • 3.

    Google sells AdSense; Yahoo! sells Content Match.

  • 4.

    Google works on pay-per-click, which is useful for SMEs; Yahoo! works on sell-per-impression, which is great for large companies, but not so well for SMEs.

  • 5.

    Google uses a technical, systematic approach; Yahoo! uses a people-oriented approach.

  • 6.

    Google is viewed as an Internet search company; Yahoo! is viewed as an Internet media company. In April 2007, Google purchased DoubleClick, an online ad pioneer (Chapter 4), for $3.1 billion. This may strengthen

Google’s position considerably (Story and Helft 2007). Also in 2007, Google partnered with Echostar to launch a new, automated system for buying, selling, delivering, and measuring ads over the 125-channel Dish Network (Hefflinger 2007). For more details on Google see Carr (2006).

In November 2006, Yahoo! Inc. signed a revenue-sharing deal with 176 newspapers to sell ads, share content, and deliver Internet searches, graphics, and classified advertising to customers (Walsh 2006). This agreement provides a competitive edge to Yahoo!, but Google is making similar agreements with other newspapers (Story 2006). In 2007, Yahoo! instituted an improved ad system (code name Panama) that may provide it with an advantage over Google (see Chmielewski 2007). Also, the acquisition of Flickr (Section 8.3) may help Yahoo! with its struggle against Google (see Schonfeld 2005).

Answer-Based Search Engines

Some of the interesting types of search engines are those that provide answers to questions. Insights and Additions W8.1.1 provides an example. Google discontinued its answer-based search in November 2006.

Disruptors of Google: Will They Succeed? Many companies want to displace or to become as successful as Google. Here are two examples.

Intelligent Search Engine—Will It Work?

The various search engine models are based on keywords, which may result in poor or incorrect answers. So people can improve a search by adding one or two keywords (which most people do not do) for an advanced search. Powerset (powerset.com), a new startup, wants to use natural language queries instead of keywords. So Powerset cut a deal with Xerox’s PARC labs, a top research company on natural language understanding. Major unknowns are the quality of the natural language processing and whether searchers will be willing to key in the long natural language queries instead of simple short keywords. However, if successful, this concept may disrupt the search engine industry and intensify the industry wars.

According to Sloan (2007), Web advertisers are moving beyond search by using powerful science to figure out what people want—sometimes before the searchers even know.


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