Forum Moderators: goodroi
Full-Text of Article [businessweek.com]
From the article: 1) "Now, it may be facing one of the oldest maxims in business: Once you make it to the top, it can be mighty hard to stay there."2) "More Web giants are concluding that buying search results from Google is no bargain if Google.com is competing with them as a Web destination."
3)"...Meanwhile, in the corporate-search market, sector leader Verity (VRTY ) is turning up the heat."
4)"Other potential problems for Google abound. While it remains the leader in producing quality search results, a host of other search engines, including WiseNut, Teoma, and FAST, produce searches that are almost as good -- and in certain categories maybe even a bit better, according to users."
5) "Twenty out of the 30 links Google is presenting on each page is not earning them money. That's an ad break of only 33%," points out Danny Sullivan, editor of newsletter SearchEngine Watch. That may be fine as long as Google remains a private company, but it's under increasing pressure to go public -- two of its key shareholders are Silicon Valley venture-capital firms Kleiner Perkins and Sequoia Partners -- and shareholders would likely want more bang for their buck."
The general public by and large aren't aware of these engines yet and have no need at present to look else where.
i think they may have slipped into the bracket where their brand name and perceived accuracy is actually obscuring that reality - and that is a dangerous place to be.
however, they so *clearly* have the best search interface and results page, and not having gone down the shareholder route is what gives them that.
That's part of it, yes. But it didn't save Raging [webmasterworld.com]. (CAUTION! Time Warp. Please watch your step.) At the time, many, many pros were as attached to av/raging serps as they are to google now. As heini alludes, it doesn't take long for critical mass to shift in this biz. Look how long it's taken the press to shift from we-are-ga-ga-over-google to articles like this one; about 3 months.
Maybe, but not in this country....
Regardless - why would anybody look at that metric & get worried. $100million profit on $300 million of sales is all that counts - impressive.
That will be the issue with the financial community: What is google? Typical portal success/revenue is probably measured in revenue per pixel/link. A quick look at yahoo! shows a much higher percentage of revenue per page; will this become a "measuring stick"?
Take off your webmaster cap for a minute (just a minute, don't want ya to miss anything) and put on the old "investors cap".
If you had to buy and hold a stock for 3 years; would it be google?
With your knowledge of the internet and search engines, would you reccomend google stock to someone you *really* like?
What is google now? What will google become?
That is roughly how analysts think, what say you?
Yahoo strike back with Ink....MSN via Ink continue to grow :)...It would be nice to see AOL, AV, Fast, Lycos and Hotbot make an impression, but I don't think it will be a large one.
2003 will bring MSN to the front as the risng star, Yahoo will get some ground back and Google will decline. The rest will stay in the hole trying to get out, AV has the best chance IMHO :)
As an investor I know that a company has to have something of value to sell, whether its raw minerals, a technology, or whatever. Furthermore these must be competitive with others or uniqiue in some way. Yes i do have to convinced that the company has the resources to develop and compete in the future, and that they can turn their products, services and whatever into revenue - so i look at strategic plans, industry research and otehr market research and insider intelligence to get that info.
But unless there is a real substantive product there, I will not invest. That many people did invest in tech stocks in the late 1990's was because they didnt realise that.
OK ive been in publishing many years. Ive seen magazines and newspapers killed by a reduction in quality content - subscribers leave fairly quick - followed by advertisers. In the media business (which Google is in), the "cover price" is relatively insignificant, the real revenue comes from advertisers. But on the other side your core product (editorial, articles, service) cannot be devalued by letting advertisers intrude into that. Thats why advertorial in any respected newspaper is marked as such. So in media IMHO, the key thing is to get eyeballs in the first place. Once you lose that by devaluing your content or not having a well thought-out mix, your whole business model crashes around you.
How much of your daily newspaper is ads, and how much is content? And how obvious is the content compared to the ads, especially on the front page? At what stage would you stop buying that newspaper because the ads really got in the way of the content, or because you suspect advertisers were influencing editorial?
Thats the real questions g! and g! investors need to ask itself, just for a very small start. Its OK talking about profits, returns, bottom lines etc, but more important is HOW you ae going to achive them.
A "strategy" is far bigger, and assumes, "monetization".
Google is semi-portal anyway, IMO. What is left for them to do? Email? I actually think that would be a great thing for them to do. Stats show that 46 percent of people who get online do so for email purposes. Personally, I would love to see Google email presented with a small hyper-link in the top right corner. Effective, but low profile.
All those people who are john_doe145324843_2003@yahoo can upgrade.
And if Google did go more portal, I have enough faith in them they would do it in a way that wouldn't be a step backwards. ie. the AOL, Yahoo, MSN, Excite way.
Personally speaking, buying inktomi was the stupidest thing Yahoo did. $235 million to buy a company when they barely scratch a profit? I guarantee MSN will be dropping inktomi just to put a hurt on their competitor.
The only significant player that will use inktomi is the new owners. The savings of having their own engine will take a decade to make up for what they save in not running Google. 10 years! This war between the big 4 is not going to last that long. Yahoo doesn't have time for that investment to pay off. AOL has less time.
As far as quality serps, Yahoo's directory was better than inktomi. That's like buying a Nissan Sentra as a taxi cab when you have a Saturn to compete with Google's Lexus. Saturn is nice, but I'll take a Lexus.
(Even so, I agree that Google's new algo has gone down some in relevancy. Not major, but not as great as it was.)
The big 3 also have Net Zero to contend with - a portal without a search engine. Am I the only one to notice their commercials running 25 times a day with a strong sales pitch? Net Zero is a much bigger threat to AOL, Yahoo, MSN then it is to Google.
Never discount the hungry underdog.
Google's biggest challenge is not to go public. Short term profit for long term mystery. Recent history of the Nasdaq/dot com love fest meets the Jerry Springer show is what scares me about that.
AOL is dying. Yahoo will become a cripple and a has been. It will still have market share, but not significant. If MSN drops their banners and picks up Fast or Teoma or Wisenut - that could be serious. Still, I don't see net savvy people leaving Google in droves to give Bill Gates more money.
You know, I can't help but think of Hollywood's tendancy to build up a super-star in a Cindarella story then trash them when they get to the top.
But hey, what do I know. I am just an armchair quarterback like everybody else here. We can only sit back and watch the game, scream at the refs and jump up and down, spilling our beer and talk about what should/will happen.
Zapatistas!
Personally I'm waiting for Google Pool :)
The past three weeks have shown a 360 degree turn around in the press view and news headlines regarding Google’s dominance over the web search market. In fact, it seems that Google vs. Everyone is the main attraction as the battle for search traffic becomes more and more fierce. With an estimated 75% of the market share, even the once Google beloved searchers are getting a bit uncomfortable and marketers, afraid that too much change too soon could be detrimental to their efforts and in the same token hoping for more alternative marketing options.
Still a privately owned company, Google is under more and more pressure to go public. But shareholders equate to more pressure to raise revenue and “selling out” advertising space was never a Google goal. In fact, Google has become successful by going against the grain keeping advertising on the site restricted and non-invasive. Since other portals are trying to make money on just about every link they serve, Google maintains high standards that will inevitable disappoint shareholders.
Of course Google is by no means in trouble. Although they do not publish their earnings reports they have managed to steal about 40% of Yahoo, MSN, and AOL’s market share. Not to make enemies, Google did renew their deal with Yahoo last October to become a “non-exclusive” search results provider, and their relationship with AOL is a strong as ever. “According to October 2002, measurements by Web traffic tracker Nielsen NetRatings, AOL and Google.com together get six times the search traffic of Yahoo, the closest competitor.” (Source)
So what’s in store for Google? Worst case scenario, they go public and begin to populate more and more of their portal with advertising (on the home page? Noooo!) with the goals of making money. Best case scenario, they ignore all the press to go public and maintain their high standards of search result technology and clean portal interface. Google’s success is party due to its uniqueness, selling out to become more like the others will only open the door more for its competitors.
Source Cited
Google's Gaggle of Problems
[businessweek.com...]
