Google and The Profile of Search Engine Industry

0 Comment

The search engine industry is very attractive in terms of revenues but may prove to be not very lucrative in the short term.The industry size is about US$ 11.8 billion as of 2003 (sales figures lifted from Google and other leading competitors Ask Jeeves, Yahoo, MSN, and AOL/Netscape).This market size is just a fraction of the bigger industry if other leading internet companies like and eBay are included in the analysis. Hence, the US$ 11.8 billion sizes can be considered as the floor or minimum.The intense competition, however, demands more improvements and more developments with shorter life cycles. This can significantly erode the profitability of the firm for companies like Google must allocate big resources in research and innovation in order to capture the general market.Convergence is a significant factor in the changing search engine industry. Providing highly relevant search results will no longer be the best talking points. In the long run, it will be considered as standard in the industry. The emerging challenge is how to lump different services around the search engine.Case in point: MSN to incorporate search capabilities to MSN Encarta, MS Outlook, and Internet Explorer. Another, Google is integrating other systems like Froogle, Gmail, and Blogger under the blanket search engine.The idea is to be a one-stop-shop that will cater to the majority of internet users. It means that one needs to go to Google to make some preliminary search on a product then go to buy a book then to eBay to buy used mp3 players. Instead, net users need only to visit Google site and there he or she will find direct links to emails, online shopping, sports, and news update.Major forces of change are customers and the intense competition related to this. The growing customer base will define the new or expanded definition of the search engine. Hence, they will dictate their needs/wants or aspiration and other values. Companies like Google must then incorporate this in their system quickly and ahead of the competition to the first-mover advantage.