Alphabet Google Search: Dominance Ending?
February 28, 2016
I read “Will PageRank Expiration Threaten Google’s Dominance.” The main point is that Google’s shift to artificial intelligence “hurt Google Search’s market share and its stock price?”
The write up references the 1997 write up about the search engine’s core algorithms. (There is no reference to the work by Jon Kleinberg and the Clever system, which is understandable I suppose.) Few want to view Google as a me-too outfit, “cleverly” overlooking the firm’s emulation strategy. Think GoTo.com/Overture/Yahoo in the monetization mechanism.
The write up states:
The Google Search today transcends PageRank: Google has a myriad of proprietary technology.
I agree. Google is not an open source centric outfit. When was the last time, Google made it easy to locate its employees’ technical papers, presentations at technical conferences, or details about products and services which just disappear. Orkut, anyone?
The write up shifts its focus to some governance issues; for example, Google’s Loon balloon, solving death, etc. There is a reference to Google’s strategy concerning mobile phones.
Stakeholders may want to worry because Google is dependent on search for the bulk of its revenues. I learned:
From Alphabet’s recent 10-k and Google’s Search revenues from Statista, you will realize that Search has been ~92%, ~90%, ~90% of total revenues in 2013-2015 respectively.
No big news here.
The core challenge for analysts will be to figure out if a shift to artificial intelligence methods for search will have unforeseen consequences. For example, maybe Google has figured out that the cost of indexing the Web is too expensive. AI may be a way to reduce costs of indexing and serving results. Google may realize that the shift from desktop based queries to mobile queries threatens Google’s ability to deliver information with the same perceived relevance that the desktop experience created in users’ perceptions.
Alphabet Google is at a cross road. The desktop model from the late 1990s is less and less relevant in 2016. Like any other company faced with change, Google’s executives find themselves in the same boat as other online vendors. Today’s revenues may not be the revenues of tomorrow.
Will Alphabet Google face the information headwinds which buffeted Autonomy, Convera, Endeca, Fast Search & Transfer, and similar information access vendors? Is Google facing a long walk down the path which America Online and Yahoo followed? Will the one trick revenue pony die when it cannot adapt to the mobile jungle?
Good questions. Answers? Tough to find.
Stephen E Arnold, February 28, 2016
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