Gray Googlers - Striking Gold?

So, I'm flying back to Seattle - from the ELC conference in DC and I happenned to pick up the 10/26 edition of USA Today. On the cover of the Money Section was an article titled - "Gray Googlers" Strike Gold. I remember reading through the article and trying to wrap my head around just how far Google has come - in redefining the Internet as a viable medium for electronic commerce. 10 years ago, the Internet was used primarily as a means of communication - email and messenger were the key drivers. At that time, General Interest portals like Yahoo and MSN were already popular in the United States and gradually becoming key information vehicles in other Countries around the World. In many Countries - General Interest Portal = Global News & Entertainment Destination - with some Communication Tools. Amazon was probably one of the first widely popular ecommerce sites. Although the value proposition was clear - the money only flowed one way - to Amazon. eBay offered a better model - a Win-Win for buyers and sellers alike. Of course - it helped that Buyers could readily become sellers and vice-versa. When Bill Gross founded goto.com and created the original business model to make money from a Search Engine, he couldn't have anticipated what would happen next.

Today, the top 3 Search Engines - Google, Yahoo and Live Search, personify the very essense of electronic commerce. That said, Google is by far themost successful ecommerce vehicle the Intenet has ever produced. Just ask Jerry Alonzy, the 57 year old independent handyman who makes $120K annually from adsense ads on his handyman website. Today, thousands of people are making a great deal of money from adsense and adwords campaigns. No other online entity has a one-two punch like this one - as is evidenced by it's growing revenue and stock valuation

Google's Growth continues to be the subject of several "anaylyst discussions" - truth is no one really knows how this story ends. Google Founders could never have imagined that their model would be so successful. It's taken good execution from Google and a variety of missteps by it's major competitors to get us to this point.

Google's had a 5 year headstart on Microsoft's Live Search - it's only true long term competitor in the Search Engine Wars. What Live Search does not have is a strong global monetization platform. Yahoo bought Overture and for a while, that worked very well - largely becuase their largest and most profitable client was MSN. Now that 3 of MSN's key portals (US, UK and Canada) have transitioned to Microsoft adCentre, Overture's revenue is down significantly and it's parent - Yahoo, does not have the funds to continue to expand it's network of Global Partners. In order to effectively compete with Google - Live Search, Yahoo, Ask or any other would be pretender - would need to do 4 things - very well.

1. Match Google's Search Engine PLT Performance. (i.e the average amount of time it takes for a Search Engine to generate a result for a specific query. Google is by far the fastest Search Engine - amongst the top 3)

2. Deliver more relevant results than Google - for all types of Search Queries - (Including General Interest, Market Specific, Head & Tail Queries). This is becoming especially difficult for certain types of general interest queries -with the advent of Universal or Blended Search

3. Develop differentiating features which encourage users to start using the Search Engine regularly - and which drive increased Search Engagement. (i.e the approximate number of query terms which an indivivdual generates on a daily/monthly basis).
-> Most Internet Users leverage more than one Search Engine today. In order to become a formidable competitor a Search Engine needs to get users to use it's Engine at least as often as they use Google.

These first 3 steps just get you in the game. Yahoo is a good competitor in each of these 3 areas today and Live Search is working hard to breach the gaps in 1 & 2.

4. Many have overlooked the importance of AdWords and in particular, AdSense - as key drivers of Google's popularity, as a Search Engine. The revenue which Google has generated from these great business models has cemented it's reputation as an exciting Global Brand. Any Search Engine which hopes to successfully challenge Google must have grow a successful competitor to AdSense and AdWords in Key Search Markets around the world - including the US, UK, Japan, China, France, Canada, Germany, Brazil and Australia. Google generates over 45% of it's global search revenue - from International Markets. The main battle ground remains the US, but this Search War is very much a global one.

Yahoo has all the tools to compete effectively - but lacks the funds to invest in it's Search Engine and it's Search Monetization Platform - like Google does. Live Search is backed by MSFT's considerable cash reserves - but it's Search Engine is not yet on par with Google's and it's monetization platform is only available in 4 major markets around the world.

The x factor in all of this is Google's brand and the perception users have - that Google is Search and Search is Google. How do you compete against that? Why would anyone stop using Google altogether - if it returns results which are at least as good as it's key competitors? The Gray Googlers article is just one of several articles written every day, which further strengthen the Google Brand and it's legacy. It will take very strong execution on all 4 focus areas and some major missteps by Google - for any other Search Engine to become THE global destination for getting answers to Search Queries.............