This article will discuss the search engine market dominance of Google Inc (NASDAQ:GOOG) and what I find to be its biggest threats. I think the biggest of these threats is something that Google should watch out for as it looks to provide momentum for a shift in users that could lead to a loss of market share.
I am old enough to remember the days when Yahoo! Inc. (NASDAQ:YHOO) ruled the land of the search engines. Then one day Google came along and grabbed that market, and has never looked back. Since then the company has since diversified and has expanded into the smartphone market with Android, and now makes affordable laptops as well. These factors are what I believe will lead Google Inc (NASDAQ:GOOG) forward, and I believe the company is losing sight of what propelled its search engine to become the best in the world.
A large milestone for Google was its acquisition of Youtube, which it has since integrated into its portfolio. Youtube compliments the search engine nicely, as videos are integrated into search and users going right to Youtube can be reached by Google Inc (NASDAQ:GOOG)’s Adsense advertising.
Over the past few years, Google Inc (NASDAQ:GOOG) has made some revisions to its search engine, as well as creating some products that can be viewed as not so user-friendly. For one, Youtube originally had its embedded videos on outside websites in a manner that was much more rewarding to the site owners. The video codes were transferable in a much wider capacity, though now they are not as easy to embed. Furthermore, the referring websites that provided the most views to the videos used to receive a backlink from Youtube, which is no longer the case. This is one of the examples where Google has made it more difficult for website owners to capitalize from its search results, which in turn gives part of its customer base reason to look elsewhere for opportunities.
Another feature that Google Inc (NASDAQ:GOOG) has changed that has limited exposure for websites is that its Shopping product now only accepts paid submissions for inclusion. Gone are the days when site owners could freely submit products for inclusion.
Having friendlier policies in these regards are large factors, in my opinion, as to how the company was able to become so dominant in the market.
Changes like these show that the company is no longer reaching its market in the same way, though it may make perfect business sense. It provides competitors such as Facebook Inc (NASDAQ:FB) and Microsoft Corporation (NASDAQ:MSFT) an opportunity to reach more users.
Bing Wants More Market Share
Microsoft Corporation (NASDAQ:MSFT)’s Bing search engine has a current television advertising campaign in an attempt to take search engine market share away from Google. In my opinion, the search engine layout of both companies is similar, though Google Inc (NASDAQ:GOOG) trumps Bing in the quality of results based on selection.
An aggressive advertising campaign to steal market share is more along the lines of uncharted waters, and it definitely is a strong attempt to sway users to go right to Bing instead of the usual Google.
So far, it is working. In May it was announced that Bing hit an all-time high for market share, surpassing 17% of the market, while Google Inc (NASDAQ:GOOG)’s market share slipped to about 66%.
Its online services division, which houses Bing and its advertising service, improved its 9 month results for the quarter that ended in March of 2013 by 12% compared to the nine month period ending in March of 2012. Its revenue of $2.3 billion for those nine months makes up about 4% of its total revenue company-wide.