Leading the Search Engine Industry

05/14/04

Just nine months ago there was no disputing the fact that Google was the #1 search engine and the company most likely to lead the online search industry for years to come. A wave of mergers, acquisitions, and personnel changes, however, has shaken up this ever-volatile industry. Yahoo now stands threat to Google's dominance for search quality, search quantity, and search revenue.

Today, there are two clear leaders in the search engine marketplace. Through innovation, both Google and Yahoo have distinguished themselves from an industry full of followers, copycats, and licensees. The most obvious factor that sets both Google and Yahoo apart from the competition is that they are the only companies offering both proprietary natural and paid search technology. As a result, nearly 100% of US searches now pass through the technology of one of these two behemoths in one way or another.

Now that a Google IPO is imminent, who really leads the race?

Which company will dominate the search industry for years to come?

No one can say for sure. Time and time again the company leading the internet search industry has been demoted to failure in just a few short years. In the late 90s, everyone would have thought Excite was leading the way, AltaVista shortly before that. Now, these two fledglings are secondary properties of more major contenders (AskJeeves and Yahoo, respectively).

Are there any dark horse candidates for success?

Microsoft, for one, has already invested millions of dollars and over a year's worth of effort into developing a proprietary search technology and index for their MSN portal. Likewise, AskJeeves has begun establishing a revitalized reputation by posting several straight profitable quarters and increasing its Teoma distribution network by over 100% through the recent acquisition of excite.com, iwon.com, and a number of related search properties from private Interactive Search Holdings. In the paid search sector, FindWhat has come on strong, announcing a number of acquisitions creating a large international distribution network as well as proprietary technologies in email sponsorship integration and product search.

You never know what company will emerge to challenge the forerunners at any given time. Yahoo and Google may dominate today, but the "little guys" aren't so little and the industry has a history of instability near the top.