Is Google Really Losing Its Power?
Google's main course of business evidently is Search. They were at the right time in the right place: they could take advantage of the initial growth of the Internet and after developing their groundbreaking Page Rank algorithm they secured themselves top place for over a decade.
What is happening now? Is Google really loosing its power? Definitely not... officially. What is happening to the multi-billion dollar company today is that they are starting to face tough competition for the first time. The comfort of their oligopoly has finished and they have to advance fast in order not to be left behind.
Naturally, Search is not going to die, yet it is likely to change form. As is today widely known, 78% of people are much more likely to accept the opinions of users and peers then those of advertisers being paid to sell. And which peers would you trust the most - clearly your personal friends and family more then a random blog post that you happen to find on the Internet. This is the change that Google has to face nowadays.
For example, if you were to buy new sport shoes several years ago, you are likely to do a Google Search on "sports shoes", you might then pick up a few offers and they weight their benefits. Today, you would still search Google for that, but you will also Tweet, change your Facebook status to asking for advice on shoes and search YouTube for funny sports shoes videos. Thereof, you would get your information from a much wider variety or sources. This is where Google is struggling. It is not that the power of searches is decreasing, its that the importance of so many other things in increasing.
Today still the majority of the income that the search company generates is based on their services such as AdWords and AdSense. There is still the opportunity for Google to include Image (Google Images), location (Google Maps) and Video (Google TV and YouTube) advertising. Their best option for growth evidently is not international expansion - they are already the major player in most of the world, while significantly low in influence in China and Russia where they loose miserably to local competitors (Weintraub, Seth for Fortune). Thus, experts predict their future to be in increasing the types of services that they offer and making them more personalized and social.
What Mr. Weintraub emphasizes is that "At Google, where every problem is waiting to be solved by some form of search query, that is tantamount to blasphemy." However, what is becoming increasingly important and influential is the technological ability to provide answers before the questions are being asked. Some applications developed for that would be Flipboard, Feedy, and many other personalized URL websites.
Google has provided a service like that at Google Reader, but the development of the idea should go much further. Fortune Magazine says: "In this new phase of the web, one of the largest threats to Google and its core search business is the growing Facebook footprint around the world. Not only because social networks (and those used for work like LinkedIn fall into that same category) offer a substitute for search for consumers, but also because they offer a substitute for advertisers as well. In display advertising, for example, Facebook has a 16% share of the roughly $9 billion market, according to comScore (Google sites have 2.4% of the market), and advertisers say they're looking for more ways to plug into Facebook."
Further, the social networks as such seem to be a rather closed environment for the Search giant. "Facebook, LinkedIn, and Twitter are essentially "closed" platforms. They are growing chink in their armor The question is, What can they do about it?"
Thus, the next big thing that Google needs to focus on in terms of their core business of Search would be creating a platform to provide better quality search results personalized to the needs of the specific individual rather then a general Page Ranking list of potential websites of interest (optimized by professional marketers for the general target audience). Currently, Google calls that "implicit or passive search. It's the sort of thing that makes connections between, say, a friend who is an amateur expert on travel in Australia and your upcoming trip Down Under. A keyword search could not only flag hotels and tourist hot spots but also find blog posts, e-mails, messages, and even pose questions to your friend about where to go shopping or dining in Sydney -- without bothering the rest of your network. "Who you are, your context, what you are doing, who your friends are -- if all of that comes in as the search input," Google says, "what is the right output?" (The key word in her quote? "Friends.")"
And this is where Google failed to deliver. Its platforms such as Google Buzz and Google Waves (to name just a few) have been a failure as they had not managed to involve the users in an active and continuous dialogue. It is true that Google has provided great office applications to facilitate the work of millions of companies and individuals, yet, these applications are structured in a very particular way. They do not easily adapt to the social factor which is nowadays of a growing importance and influence. "They are just not that good at it," says Tom Coates, until recently the head of product at Yahoo's defunct Brickhouse lab. "Google is very good at building these utility-type products -- search, e-mail, and messaging. They are sort of like the power company of the Internet. But what they lack is a sense of how people share and collaborate." What Mr. Coates is referring to is that you do not have friends on Google, you have contacts and tasks. These services reflect an engineering culture that's all about utility, but one that makes it hard for the company to create something that's friendly and social.
Further, they are facing growing competition with LinkedIn Answers and Facebook's Questions. Although currently at a rather unpolished state, it is expected that FB's new application will further complete for users' attention on the Internet. In this sense, Google is already adapting to the challenge. As with many other things, it has already purchased a start-up company called Aardvark which does exactly this.
Thus, is Google really Loosing power is to be determined, what is certain is that it is slowing down which allows competitors to catch up and go ahead.
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