Google dominates Web search, but faces challenges: report: “As it readies its share offering, Google dominates the Internet search market but faces challenges as it tries to broaden its services, research firm Standard and Poor’s said.”
On the not surprising side of things, the study by S&P Equity Research Services, and conducted by online market research firm InsightExpress, found 48 percent of search engine users use Google most overall, compared to 20 percent for Yahoo!, 14 percent for Microsoft’s MSN business unit, and a mere 7 percent for Time Warner’s America Online subsidiary. (AOL has a multi-year agreement licensing the Google algorithmic Web search index on its own AOL Search property, as well as a revenue sharing deal for distribution of Google AdWords.) As well, 83 percent of Web users were extremely pleased with the search engines they use and cited Google for its relevance and accuracy of its results.
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But S and P analysts said Google could face challenges as it expands beyond search into offerings such as shopping, social networking, and e-mail services.
Asked about Google’s planned launch of its e-mail service known as Gmail, only eight percent of those surveyed said they were very likely and 15 percent said they were somewhat likely to use the service, which promises virtually unlimited storage and the capacity to search old e-mails, and would target advertising to users.
Moreover, more than six out of 10 Google users indicated they would switch search engines if a better service came along.
Google will definitely need to keep these items in mind, especially with its Orkut social networking service. Initially, Orkut received a much-hyped response but interest has waned and its monthly unique visitor totals have presumably declined — just has the numbers for rival Friendster have.
Post-IPO, when Google is flush with billions of dollars in cash, it might consider making a play for Monster Worldwide, Inc. — the parent company of the Monster.com job search and recruiting Web site; social networking and online assessment network Tickle, Inc.; and Yellow Pages marketer TMP Worldwide, Inc. Monster.com would give Google a very successful and profitable entrance into the job hunting market, where it could compete aggressively with Yahoo! subsidiary HotJobs. Tickle would give Google a much better (and bigger) social networking service, with technology that is much greater than Orkut and a much larger registered user base. And finally, TMP Worldwide would give Google another niche — Yellow Pages advertising services in numerous print telephone directories around the globe. So strategically and financially, that would be an excellent route for Google to go.
Its other non-search assets, namely Google Groups 2, Gmail, and Froogle, also need continued improvement in order to resonate with users. Google Groups 2 still lacks critical functionality, like the ability to delete a group or share files. Gmail has some problems still, such as a lackluster spam filtering system and plaguing privacy concerns. Froogle is probably Google’s best, non-search service. However, unlike rivals Shopping.com, NexTag, BizRate, or PriceGrabber, it lacks a financial model. Google needs to figure out how to keep users to its Froogle property and monetize those visits.