27 Nov 2012

Can Google build a future beyond search?

It may be hard to imagine using the web without Google, but the internet’s short history has seen many giants rise and fall.

Can Google build a future beyond search?

Online habits are changing as users move to mobile phone apps and specialist sites, Google’s core market faces serious challenges.

A third of shopping search queries now start on Amazon.com (up 73 per cent) compared to 13 per cent on search engines. Hotels, flights and tickets can now be purchased through apps, taking ad revenue away from Google. Amazon’s Kindle devices even come with Bing as its default search engine.

As rivalry with Apple heats up, iPhone users may face a future in which internet search is no longer synonymous with Google. Apple has appointed Amazon’s search executive, William Stasior, to head up its Siri app, with a view to improving its search functions. In its latest iOS update, it removed Google as maps provider and could in future remove Google as its default search engine.

The rivalry is understandable, Google’s Android OS now powers 75 per cent of all smartphones – the software is built to serve Google ads and apps.

When former Google executive James Whittaker left for Microsoft, he claimed the company he left had become “an advertising company with a single corporate-mandated focus”.

In a blog post he told how he believed the company had faltered after having its dominance in the market threatened by Facebook, which had caught the company sleeping.

In a bid to regain ground Google went big on social, launching its third attempt at a social networking site, pushing social features on YouTube, and announcing that search would become social. The company that had pioneered for almost a decade was on the back foot.

In 1999 Google revolutionised how people used the web. Within five years the company would unseat web giants MSN, Yahoo! and AOL. The trend has been for all internet giants to eventually decline.

Beleaguered internet giants

Yahoo! held an undisputed position as the top online destination until 2003 when Google began to overtake it, offering a simple, uncluttered experience and innovative search engine.

Google now holds 66.7 per cent of the US search market, with Yahoo! taking roughly 13 per cent, MSN’s Bing 15.4 per cent, and AOL 1.5 per cent. The former giants reacted too slowly to the changing landscape.

In China, the world’s second largest economy, Google has had difficulty with state censorship, and reports suggest their service is blocked in some regions. In this vital market search is dominated by Baidu, holding roughly 80 per cent of the market while Google hovers around 15 per cent.

While Google has learned from the demise of Yahoo! and diversified into tablets, Chromebooks, mobile, cloud computing and more, its core business of cost-per-click advertising has declined this year.

The company is busy catching up ground lost to Facebook and jostling for position against Apple with its own voice-based search. Will a young start-up seize the opportunity to repeat history and turn Google into the next Yahoo?