Without the big public being aware of it, there's a war going on out there between search engines trying to get their foot in the door to our computers. For the majority of people a search engine is a commodity: as long as it does the job. Google has proven though with their multi billion revenues that for search and advertising companies it is major business.
Here are a few examples I ran into the past weeks:
1. Using Internet Exlorer at a friend's place I discovered that Microsoft is - understandably - plugging their Bing search engine as default in their Internet Explorer address bar. More and more people use their browser as search engine instead of going to a specific search engine homepage. Internet Explorer still has a huge market share, so do the math... One of Google's responses is a huge - for Google unprecedented - on and of-line marketing campaign for their own browser: Chrome.
2. When downloading Google's newest Picasa update, a menu appeared with a few pre-checked options. One of them was: "Set Google as default search engine in Internet Explorer". No evil huh? Duh...
3. When installing a free anti-spyware application, the following warning from Google emerged from my system tray:
So I pressed OK. Then yet another warning - this time from the other camp - appeared. What's going on here!?
4. And then the news broke that the idealistic Open Source guys from the Linux/Ubuntu camp had fallen for the big money. They announced changing the default search engine and home page bundled into Firefox from Google to Yahoo. The switch is due to a new, and presumably more profitable, revenue sharing agreement with Yahoo, and will be implemented in the next official release.
After a hack attempt to Chinese dissidents' gmail accounts Google defied Chinese government by threatening to completely shut down their business in China. With this move Google imposes an ultimatum on the Chinese to allow free unfiltered internet in a so far heavy censored marketplace.
As a first reaction of investors Google shares immediately went down , whilst shares of Chinese competitor Baidu won 7% after hours. Although quite cynical - the free market supporting censorship - as a first reaction this seems to make sense because - as JPMorgan analyst Imran Khan estimates - Google's China revenues at around $600 million this year are at stake. But it's very probable those 600 million will prove to be be a very smart investment, both from a short as a long term investors point of view.
For the short term this move generates an enormous amount of very positive publicity around the world. Once again Google will be the champion of free speach and openness of the internet. Google can do with some positive publicity in a world that becomes more and more suspicious of the monopolistic marketing power of the internet giant. Only a week ago German minister Sabine Leutheusser-Schnarrenberger said in an interview with "Der Spiegel" that she was concerned the firm was accruing too much power and information about citizens via programs like Google Earth and Google Books.
On the longer term history will eventually prove the Chinese government unable to completely control, filter and restrain the internet for their citizens. With a (temporary) withdrawel from China - where Google's market share is relatively small - Google will do a lot of damage to the image of the Chinese regime and consequently will gain a lot of sympathy with the Chinese public. Already Chinese dissidents put flowers outside Google's Chinese headquarters. Baidu on the other hand will in the long run be hurt by their image of complying to the regime's demands and restraining their customers from a free information flow. So by temporarily losing some revenue, Google could very well secure a significant gain in future market share in China.
Last summer Microsoft launched search engine Bing. It more than doubled its US market share from Q3’09, and over the course of the year MS even gained 500% in market share. In Q4’09, this growth apparently came at the expense of Google, which recorded its lowest market share in the US in the 3 years of the study – 72%. This all started at the end of May/the start of June 2009, when Bing replaced their Live Search engine. According to Microsoft, Bing's success is due to a new perspective on the search engine turning it more into a "decision machine".
I doubt if that is the case. The main reason that most consumers use Google is simply because they're used to it. At some point they've probably installed it as their internet startpage, but - in the end - who really cares about a search engine? It's for the average user an extremely low-interest product - as long as it produces results. Now that search is more and more being executed from within the browser - just enter your search in the address bar; no more need to go to the familiar Google or Yahoo! pages - search engines become even less interesting to the average user. And consequently for search companies the browser becomes a much more important tool to generate search traffic. This is why it is extremely important for companies like Google and Microsoft to convince people to use or keep using their browser. Most users however also are completely indifferent about the browser that is being used. They are willing to spend hours considering all kinds of hardware options in the computer store, but when it comes to the user interfaces, most people just use whatever appears on the screen when they turn on their computers. The following video - made by Google - shows how little people actually even know what a browser is and most seem to confuse browser and search engine. "Which browser do you use?" "uuuhhm, Google!" This obviously explains why Microsoft's Internet Explorer (IE) - generally known to be the worst browser both in terms of speed as in functionality - is still the browser of "choice" of 65% of US and 80% of EU users.
So what then explains the sudden soaring of market share and the shift of about 11 million people in a half years time to Bing? The answer is quite simple. It's most probably the introduction of Windows 7. A new Windows version makes you having to set up your user settings, including opening page and default search engine. A fresh start so to speak. So, knowing that most people simply use what they're used to or what's pre-installed, this is the perfect time to strike for Microsoft. So you decide to keep using IE, it's pre-installed, the icon's familiar, it always seemed to work. So why bother? Now what do you think happens when you start searching using the URL address bar in IE?. Bingo, you're directed to .....BING! Without even being aware of it, you've become a Bing user! Again, for the average internet surfer, this is no big deal, as long as you're getting your results right?
In 2010, after a whole lot of negotiations and being fined billions of U$, Microsoft is now set to offer European users of its Windows operating system with a browser choice. This choice is not (yet?) offered to US users though. On internetnews.com Sean Michael Kerner complains:
"Why don't U.S. consumers get the same choice?Yes I know full well that any user can go and download Safari, Firefox, Chrome or Opera for Windows. I also know that for a whole lot of people out there, who just don't know any better the big blue E is the Internet and that's all there is to it.
Google´s response
Google of course is fully aware of its reliance on their search engine's paid clicks that obviously make out a good deal of the revenues they generate. They constantly develop or acquire new products to commit their users to their free on-line services and generously give away free online storage space. If you use Gmail, you can store more than 7 Gigabyte of emails and attachments on the net. Picasa gives away 1 GB of photostorage. YouTube (max 1 GB per video!) and Docs don't even seem to have limits. But despite this diversification efforts they´re still for a good part dependant on the massive use of their search engine. According to CEO Eric Scmidt Google "is always one click away from losing the end user". They even seem willing to compromise their "do no evil" motto in their efforts not losing the customers to Bing. When I recently upgradedy my Picasa version, a box with a few options appeared. One of the pre-checked options was something like "Make Google default search engine in Internet Explorer". And who can blame them? The huge interests at stake with regards to the low-interest internet browser are also illustrated with the recent massive billboard and newspaper campaign for Google's new Chrome browser. Another attempt to make the big crowd a little more aware of the existence of browsers other than Internet Explorer. Although the word of mouth approach has done wonders for most of its products, Google decided not to rely entirely on that marketing strategy for their Chrome browser. This clearly illustrates the intensifying "Battle of the Browsers".
The billboard and full page newspaper ads are - in Google style - mostly white. They describe typical internet sessions that involve some heavy browsing, resulting in a lot of open tabs and .... ultimately: 0 crashes. They claim the browser to be "made for everyone", thus trying to appeal to the mainstream internet users.
Google's plunge into the telecom industry accelerated this week with its Monday proposal asking the FCC to let it manage a new white space database and the Tuesday release of the Nexus One smartphone. (Catch up on Wire coverage of the Nexus phone here.) Both are part of a what is widely believed to be a broad telecom strategy for the Mountain View company, but what exactly is Google doing and how might it change telecoms?
Beginning of a Grand Strategy Before petitioning to become its administrator, Google long championed the creation of the FCC white space database, which will track free TV channels, enabling companies to use them. So why does it matter? The Ottawa Citizen's Vito Pilieci saysGoogle wants the database up and running so it can become an irresistible carrier: "The company wants its products to be available to you always. You need e-mail? No problem, here's G-mail. Need to make a phone call? No problem, here is Google Voice. ... Then there is Google Docs, Calendar, Wave, Picasa, Youtube, etc." As far as Pilieci's concerned what Google is doing in the consumer electronics market has only been rivaled once: by what Microsoft's Windows OS did to the PC market.
Revolution Is Coming, but Slowly Wired's Ryan Singel sees a lot of as-yet untapped potential to shake up the mobile phone industry. But he laments that the company didn't use the Nexus One as a way to welcome the uninitiated or turn the standard business model on its head: "How about a smartphone starter plan, deeply subsidized by ads, that offered a cheap data plan to entice the 'I don't need a smartphone' crowd into joining the revolution? Even better, would have been an order form where you could buy the Google phone and then choose from three or more carriers who are competing to provide you with a data and voice plan -- just as you do when you buy a laptop." While the company hasn't revolutionized phones yet or streamlined the buying process, there's still time, he writes.
Hands Tied by Business Partners While there is plenty of potential for the new phone to help Google's broader telecom push, the company may have to tread lightly, write Reuters reporters Alexei Oreskovic and Sinead Carew. "For all Google's might on the Internet, analysts don't see it upending the wireless business model in the near term, saying the company must tread carefully so as not to upset the business partners of its Android mobile operating software." And besides, the company doesn't seem to be in any sort of rush, Current Analysis analyst Avi Greengart told Wall Street Journal reporters Jessica E. Vascellaro and Niraj Sheth: "Unless [Google] gives it a big push with marketing dollars, which they are not, consumers aren't going to know the phone exists," he said.
