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."
"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's about the same ratio of content to advertising that you'd see on a prime-time TV show.
IMHO, it's a mistake to measure a Web site's profitability by what percentage of its space is devoted to advertising. On the Web, a high ratio of advertising to content is usually a sign of desperation.
Yahoo buying Inktomi is a clear indication they view Google as a competitor, not a "search results" provider. If AOL and Yahoo both drop Google, Google is forced to "Portalize", and try and wedge out one of the "Big 3" for a spot at the top.
I feel Google is more "Pro-Active", than "Re-Active", and won't wait until they "get the boot"... I think the start page at Google today, will become a lot more "cluttered" in the not so distant future... :)
a) They seemed to think that Yahoo/Google being non-exclusive was a major thing.
Surely as long as google provides the best results then it pretty much forces yahoo's hand as far as the results they will be using... If they start using results which are worse than google's, people will go elsewhere and that doesn't benefit yahoo one bit.
If google ceases to give the best results then the least of their worries is that yahoo aren't using them as a primary...
Besides as long as Yahoo paid Google for this partnership why should Google give a hoot what their results are used for?
b) Portal's are getting jealous at losing out to google as the users first port of call and so want to do their own thing.
The nature of most non-niche portals is that they just link out to other people's stuff. Now while this is great for the less web-savvy a good search engine will normally beat a non-niche portal hands down if the user realises an alternative is available.
c) Google won't give enough space over to advertisers, wont do paid results etc.
Isn't this exactly the same thing which the article listed as helping them rise to the top spot several paragraphs earlier, not to mention saying that their adverts (as-is) produce better rates than regular adverts.
- Tony
Google is forced to "Portalize"
Some people do learn from history, however. Why on earth would Google amble of, lemming-like, to the exact same fate that awaited Excite, Infoseek, AV, et al?
Pretty blinkered view, I'd say, and G, to date, have been anything but that.
I highly value their simple interface, and extreme usability.
I think the IPO idea is a complete waste of time, and usually causes more problems.
I'd rather be a small company that is successful over the long haul, then be so interested in IPOing.
It's a proven factor towards long term failure.
An IPO may be a waste of time in your eyes, but if you were an executive there a 20 million dollar+ paycheck may be a nice incentive, regardless of the long term implications to the company.
1. "Ditto for Froogle, a service Google launched in December that allows users to type in shopping search terms and receive rankings based on prices."
** Results are not based on price.
2. "Google provides most of the portal's Web-search capabilities. And AOL is included in Google's AdWords advertising network, so anyone who buys a keyword at Google.com will be included in the paid search results on the right side of the screen on AOL, as well."
** I don't see AdWords results to the right...
Point - don't belive everything you read
About 3 years ago, I gave a computer to my father-in-law... he is not afraid of new technology and is a very intelligent man...
at any rate, I placed Metacrawler in his favorites section of IE... he came to my house the other day and asked me to search for something... when I pulled up google, he asked why it looked so different... I said what looked so different(my confusion was obvious) he said the thing that you search on... he had used metacrawler for 3 years and never thought of switching to another search engine... In fact, I have doubts as to whether he even know there were other engines out there...
My point is that it is assumed by most non techies that all search engines are created egual... given that premise, brand regognition and familiarity is much more important to a SE's success than relevant results.
[edited by: mat_bastian at 5:10 pm (utc) on Jan. 14, 2003]
I don't. But every point of significance in that article has been made here --over and over and over. ....some of them more than a year ago.
Good article, IMO, about as well-put as I've seen in articles meant for mainstream US businessmen. And, make no mistake, BW still holds authority in that market.
1) rankings based on price, not quite true, should have been rankings influenced by price :)
2) Google AdWords do appear on AOL, but not regional variations and not at the right ;)
I think the IPO idea is a complete waste of time, and usually causes more problems.I'd rather be a small company that is successful over the long haul, then be so interested in IPOing.
It's a proven factor towards long term failure.
The problem is Google needed money to buy all those boxes and keep up with their growth.
The VCs that gave them money are not likely to just sit there and wait for them to have a long prosperous future as a small company making 10% profit.
They want to drive them public and sell their shares to make 10000% in one year.
After that, they won't care much for Google.
That's all oversimplified, but that is what Google's founders have to deal with.
"Overture won a series of contracts...including CNN".
Sorry, but as an advertiser CNN is NOT on my list of web properties that I'd like to be listed on.
The interesting thing about that 'series of contracts' that Overture 'won' instead of Google to me, is that CNN is the *only one* that was mentioned here. So the others are likely so small that Overture was only scraping the bottom of the barrel...
Funny read, but I think our group has it right - sure, Google might have some trouble soon - but this article is pitching it all the wrong way.
The only bump in the road, has been Yahoo, and that may turn out to be a pothole - they make it sound like bridge-out-ahead. I still think, Yahoo did them a favor.
Heh! I've been wondering what the phone calls and emails to the plex from the VCs have been saying about it. BW isn't some scrawny little newsletter.
They could call it a 'server glitch'...and think of the free press they'd get for that...it would make everybody wonder. :)
And as for people being "stuck" on the major portals such as Y!, increasing sophistication will accompany the web becoming more mainstream. Slowly users will become more savvy, it wont be fast, but it is an inevitable that browsers will become more savvy and demanding in what they get for their connection fees and 40% to 50% of ads aint it. Thats the quickest way to get people away from the Web and back to reading newspapers, magazines and watching TV..
Mind you.. that may be the idea ;)
[edited by: chiyo at 6:33 pm (utc) on Jan. 14, 2003]
IMHO inventors and entrepreneurs never end up running the businesses they start. Also businesses aren't so much valued for their original product as they are for how they handle adversity. Every business that makes money will eventually be challenged. How they react to the challenge is what frames their future. There just have to be some kids in sotware thinktanks who are developing the next generations. Google will be judged over a longer perspective than the past three or next three years. BW is just framing the issues by which they will be judged.
Come on, i did not mean a PR0 for the article but for misspelling the name not once but twice. Don't get me into any trouble here. ;)
Not GeekWeek
Don't expect the "buzz" to be the same. If google keeps moving forward with the IPO direction, you can expect a lot more analysis of their business and it won't be all favorable.
<added> You might be hard pressed to find any wall street analysts reccomending an internet IPO, most of wall street just wants the whole "hot internet company" concept to "go away".
zeus
Nor NewsWeek
It's written to their audience, not ours. The bulk of their readers are scanning, picking up the basics of where search is heading because search is showing up on their bottom line or at least on their radarscope.
I would also almsot "guarantee" you will see more ads on Google after IPO. The first thing the board will do is say "how can we better maximize our ad revenue. One of the main choices since they already dominate search is to get more ads on their pages or attempt to achieve more click throughs by changing the ads.
Twenty out of the 30 links Google is presenting on each page is not earning them money.
100% of the links on Google are earning them money! If it wasn't for the 70% free links, there wouldn't be any visitors and consequently no advertisers!
