Search Engine Wars The search engine business on the internet is very big. While there are a number of search engines, Yahoo and Google are the largest. Yahoo is the largest internet portal and according to authentic reports one out of every two persons on the internet uses Yahoo in some form.
Yahoo has the largest traffic, bulk of it from the free e-mail users. It is estimated that around 50
million use it everyday. Both the company’s growth has been spectacular and both are very young. The other major players on the internet are MSN of Microsoft and AOL Time Warner.
Despite all the traffic Yahoo has, it has not been as profitable as Google. Yahoo's market capitalization is around 37 billion as against Google's 153 billion. Google's revenue in search traffic is 8 times that of Yahoo. The earnings of Google per search are 3 times that of Yahoo.
Obviously, Google is doing far better than Yahoo in terms of financials. Since it is a business, obviously it is doing the right things from the customer’s point of view. According to an industry and finance expert, Yahoo suffers from 'monetization' problem. This simply means it is not able to convert the traffic into adequate cash.
Small websites and portals suffer the same fate to a greater degree. The main reason is not far off. When you offer anything free, its value is never realized and always taken for granted. There is no point in millions visiting your site if they won't or can't pay even a dime. At the same time, if millions do not visit your site, how do you sell your site to the advertisers? We come back to the same age old story of ‘which comes first - The chicken or the egg?’The industry came out with a brilliant ‘pay per click’ concept. This has been covered in our article titled ‘Online Advertising’
MSN has the money power, paid a hefty $ 400 million for Hotmail in the heydays of dotcom boom and can be a threat to Yahoo but not Google. MSN Hotmail is the second biggest free e-mail service provider after Yahoo. It also seems to suffer from monetization problem but has a big daddy behind it.
All technology players are moving heavily into online advertising. Web based activities will always depend on high technology. The technology companies have an advantage over all others because they can place the ads in various sites based on their unique search engine technology.
Since we have millions and millions of sites and billions of users, it is not possible to advertise on the web without the support of technology. Technology companies that have a good understanding of advertising and publishing business will be better placed.Right now none of the technology players seem to have mastered the art of publishing and advertising.
The search engine business will remain an oligopoly with Google and Yahoo being the major players. MSN can become the number two of the industry, if it gets its strategy right. Just like Microsoft being a dominant player in OS followed by Linux, Google will remain a dominant player in the search engine business followed by Yahoo and MSN. It is very difficult to overtake giants when they are on a high ground, unless they become complacent or bungle badly. Other players will have to look into market niches, provided they are available and the gaps have not been plugged.
We had an explosion of pay for search engines, a few years ago. However, very few people are expected to use them when free Google and Yahoo search are available. Internet is a new and young medium of communication. Marketing on the internet has suffered one disease and a malady right from the beginning - offering free services. People have become so much used to it that it has become an unviable proposition for most unless they are giants with deep pockets.The internet industry is also responsible for the myth that one can become rich from it. It has led to frauds.
Internet industry can be likened to a tin box into which flour has been poured. Unless the tin box is shaken, the flour will not settle down.
©. May 2007. www.madgopes.com. All rights reserved.
To learn more about this author, visit Madhavan T Gopalachary's Website.
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Madhavan T Gopalachary
(Visit Madhavan's Website)
Madhavan Gopalachary, nick name "madgopes"
(g pronounced as in go) given by IIT
classmates, is a Mechanical Engineer and
an alumnus of Indian Institute of
Technology, Madras having passed out
specializing in IC Engines &
Thermodynamics.
He has nearly 35 years of experience in
the Corporate World. He started off as a
trainee and handled sales, marketing,
manufacturing, product management, profit
center management, strategic planning and
corporate development including R & D in
various organizations and at various
levels before becoming a CEO. His last two
professional assignments were at CEO level
before embarking to start management
consultancy business on January 01, 1998.
He has worked for British, Swedish MNCs as
well as very large Indian business houses.
He has spent a large portion of his time
from June 1998 till date in East African
Countries practicing as an independent
Management Consultant.
More details can be obtained at the
following web sites:
mmg.name/
mtg.html
mmgconsu
lting.biz/
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