Google Watch Out!
I was an early user of Google. It was fun being an early adopter
who got to introduce many friends to Google for the first time. I
(mistakenly) decided against participating in their unusual IPO. I
shook hands with their CEO, Eric Schmidt, when he was CEO of Novell.
Their clean search page and quick, accurate results impressed me and
I stuck with them for many years - until now.
It turned out their advertising model was one of the few dot com
success stories that actually made money. And make money they do.
The network effect is still strong and is likely to continue to
propel their success for many years to come.
The network effect is the phenomenon of a network getting more
useful the more people that join it. If just 3 people have
telephones the phone network is not terribly useful. The more people
that get phones the more valuable having a phone is. Now that
everybody is connected you absolutely must have a phone! If I want
to advertise I will first try the service with the most customers.
That would be Google.
Recently Google released a new Internet Browser, Chrome. At first I
loved it. Clean and quick it seemed to follow the Google tradition.
I soon learned that some websites do not work with Chrome. There are
sites that run complicated Java programs which check for supported
versions of supported browsers. Chrome is not alone - Firefox didn't
allow me to properly log in to update my LinkedIn profile but
Microsoft's IE did. IE 7 also was supported by the website that
Chrome didn't support: Charles Schwab's StreetSmart.com. IE wasn't
fast or elegant and I seem to remember it failing on a site too. So
I now have 4 browsers installed including Opera. I normally use
Firefox and IE 8. Oh, yeah, the new IE v. 8 is faster with many
nifty new features than v. 7. It too isn't yet supported everywhere
but is a strong contender. The point being that the net is getting
more complicated and more diverse.
This got me to thinking about competitors of Google. I started
using Microsoft's excellently crafted service Bing. It looks more
modern than Google, is more attractive and works very well! I
especially like how my websites are somewhat closer to the 1st page
than they are on Google. 
When I search on a word I think I've misspelled or of which I want
the definition Bing gives me the answer directly from Encarta rather
than forcing me to click into ad filled Merriam-Webster or
Dictionary.com.
For some reason, I can't even remember just now, I thought Bing
wasn't doing justice to a particular query so I tried Yahoo! In the
past I steered clear of Yahoo! because of the very busy home page.
Well the home page is still busy but you can customize it just like
the home pages of the other services (try iGoogle, it's very cool!).
However the busy home page issue is moot because Yahoo!'s separate
search page is now very clean like the competition, my pages do
better than they do in Google and the results seem more useful.
So I have set Yahoo! to be my default search service. But I'm seriously considering restoring Bing. I have learned to switch, swap and try different services. Once many other people realize trying different search services is not only easy but desirable there will be more eyeball churn (like mobile phone customer churn, right? I made up the term but am probably not the first...), less eyeball stickiness and less loyalty to Google.
When it comes to advertising Google is not as invulnerable as it
may seem at first thought. So what if Bing has captured fewer
eyeballs than Google? What matters to a small scale advertiser like
me is not how many eyeballs I can potentially reach it is how many
people click through to my website. If there are more advertisers on
Google then maybe the cost per click is lower on Bing? So I set up
an account on Bing and bid a bit lower for keywords like "coins" and
"coin forum". I'll be sure to report back if I learn anything
interesting from the exercise.
I don't see Google going out of business. Quite the contrary.
Internet penetration is still increasing, newspapers made of paper
are folding daily (that's an exaggeration {and a poor pun} but
many papers have gone out of business and many more are struggling) and broadcast viewership is splintering among
myriad cable/satellite and Internet networks. This trend of
advertising moving to the net will continue and Google will capture
a huge share of it.
Still there is a lot of room for Yahoo! and Microsoft to play. While
all three will grow Yahoo! and Microsoft will both capture an
increasing share of the search & advertising business. They all
offer excellent services. Google must keep running to continue to
differentiate themselves. They make huge investments in solutions
that generate little or no profit and need to continue doing so.
Microsoft improves every offering with every new release and the
current generation of most offerings seems top of class. Yahoo! now
has a fighter for a CEO, little debt, loyal eyeballs, valuable
Internet properties and a new determination to grow. It is a tough
business! The fallout of all this is an Internet that is
increasingly useful, interesting and fun. I won't bet against Google
but will bet for Yahoo! and Microsoft.
6/25/2009 (c) Copyright Carl Wohlforth
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