More Questions about Google and from BusinessWeek
February 27, 2011
“Google’s Search Gold Mine Could Tap Out” at Bloomberg BusinessWeek is an important article, if only because a major business magazine is talking about a potential Google revenue problem.
Oh, Google is doing fine right now. Its 2010 profits improved by 30 percent over 2009’s. It also still dominates in the Search arena. However, Bloomberg’s Jeffrey F. Rayport wonders whether the good times will last- quite a shift from previous “rah rah” coverage.
Horizontal search is the root of Rayport’s doubt. Google’s failure in the real estate search market points to the value of narrower “category specialists” such as Realtor.com and Zillow. Such specific search engines, in real estate and other fields, can produce more personalized, and more useful, results. They also tend to bring in more revenue. As Rayport summarizes:
“As online users grow more sophisticated, impatient, and demanding, horizontal search may prove steadily less compelling than vertical search—at least for the kinds of search advertisers will bid against and the kinds of queries that result in sales. If that’s the case, Google must find ways to verticalize big search categories fast—or bring commercial potential offerings such as Android and YouTube to scale in a big hurry.”
Our view is that when BusinessWeek figures out a problem may exist, the smart money has known something for days, maybe weeks.
Cynthia Murrell February 27, 2011
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