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Analysis: Google goes for desktop search

Source: Silicon.com

 

Having triumphed with web search, Google is now looking to expand with a tool that will search your desktop's hard drive. In doing so, it faces plenty of competition - and other challenges.

Google faces a difficult task if it tries to transplant its successful web search business to the desktop.

The Mountain View, Calif.-based company is reportedly preparing to release downloadable software that enables people to search for text and files stored on their computer's hard drive. The move would dramatically expand Google's search business beyond the web while taking direct aim at Microsoft, which is itself getting ready to take on Google's dominance in web search with its own technology.

"It's clearly a pre-emptive move," said Richard DeSilva, a senior associate partner at venture firm Highland Capital.

Although Google would not confirm the existence of the project, called "Puffin", industry watchers have expected such a move for some time. Having announced plans last month for a $2.7 billion initial public offering of its stock, Google is accelerating efforts to increase revenue and expand into new markets on a number of fronts.

By broadening into desktop file search, Google would put two businesses to the test. First, it would expand its web-search advertising - its primary source of revenue, with sales of $914 million last year - to an ad-supported application running on the desktop. That would put Google much closer to controversial companies such as Claria (formerly Gator) and WhenU, which have been caught up in a growing consumer backlash against adware and spyware products.

Second, Google would take what it's learned in building an enterprise search application and bring it to the masses. That's no easy task, considering that Google failed to storm the enterprise search market when it introduced the Google Search Appliance in September 2002. The product makes up a fraction of its business.

The Microsoft factor
But desktop file search poses vastly different problems than web search does, and the company could easily be trumped by operating system makers such as Microsoft, whose Windows software runs on more than 90 percent of the world's PCs.

Microsoft's OS dominance has been credited in the past with helping the software giant muscle into fresh territory by bundling new features in Windows - a key allegation the U.S. Department of Justice's antitrust suit, filed against the company in October 1997.

In a Securities and Exchange Commission filing announcing its IPO, Google flagged potential Microsoft tactics as a possible threat to its business on the web. In an overview of risk factors facing the company, Google speculated that the software giant could one day seek to interfere with its ability to index certain kinds of documents on the web.

Such concerns are even more pertinent when it comes to the desktop, where Microsoft holds powerful levers to promote its own products over those of rivals.

According to a report in The New York Times, Google will try to fulfill an unmet need among PC users for tools to easily find information across multiple applications on the hard drive - searching through email, text documents in various formats, music, and photos files, for example. Consumers would likely be the primary audience for such a tool, but it could easily infiltrate workplaces, too.

Apple already offers an elegant tool built into Mac OS X to perform many of these tasks, but it only works on its own Macintosh line of computers, which account for less than 5 percent of the market. Although Microsoft includes desktop search software as part of Windows, it is unwieldy, and most users rely instead on self-managed file folders to organize their archives.

Microsoft is working on updating the next version of Windows - Longhorn - to allow people to search text, files and the web within many applications. However, that version isn't slated for release until after 2006.

Rough road ahead?
Google could establish a foothold - and a competitive edge - in this desktop search market by getting in early with free consumer software, supported by advertising. Also, it could broaden its advertising into a much more intimate PC environment, off the web, where people spend at least 50 percent of their time.

Yet the company would instantly encounter new challenges.

AltaVista, now owned by Yahoo, was among the first to take a stab at desktop search, but its product failed to catch on. Since then, a slew of companies have developed downloadable software applications to address the problem, including Copernic, Groxis, Enfish, 8020 and X1 Technologies. None have gathered critical mass.

Research firm IDC has estimated that sales of software for search represented a $617 million market in 2003.

"It's a tough market, lots of companies have come and gone," said Andrew Feit, a senior vice president of marketing for corporate search technology provider Verity.

Although Google has mainly avoided controversy over its web search ads, it runs the risk of alienating consumers if it misplays its hand in a downloadable application that aims to sort through private material, critics say.

Adware companies such as Claria and WhenU are trotting out new desktop applications to appeal to consumers and support their ad businesses. Claria and WhenU began by bundling their advertising software with other popular file-sharing applications so they could increase the number of people they might track for ad purposes. These companies monitor people as they surf the web and send targeted ads based on their behavior. The practices have landed them and many others in court, where they have argued for their right to deliver ads to the websites of their customers' rivals.

In a sign of growing overlap between web search advertising and ad-supported desktop tools, Yahoo's Overture subsidiary has struck a deal to display tiny text advertisements through Claria and WhenU.

State and federal governments are now interested in regulating and perhaps even banning adware and its more controversial cousin, spyware. Utah has already enacted such a law, and the U.S. House of Representatives and the Federal Trade Commission have convened hearings on the issue in the last few weeks.

Google may be backing self-regulation in advance of widespread laws. This week, the company released a set of suggested principles for software makers to follow when writing programs that embed themselves on internet users' PCs. The guidelines propose that an application should follow simple rules of politeness: It should admit what it's doing, permit itself to be disabled and not do sneaky things like leak personal information.

Yet even if it applies such best practices, Google could still land in hot water. Given that the company already has access to information about people's search histories and web surfing behavior and will do so about their email communications through its upcoming Gmail service, Google could take heat from privacy advocates and consumers.

The company already makes the Google Toolbar, Deskbar and other products for Windows that transmit some information about web surfing behavior back to its servers. Under proposed laws, these tools could be regulated, as would its upcoming ad-supported desktop search software.

"What's happened is that there's a trend of going from search to publishers to the desktop. After looking at the beginning of that market with Claria, the question is: How do you make it a consumer experience that they not only want, but also aren't offended by?" Highland's DeSilva said.

Those concerns over embedded software are unlikely to affect Microsoft, whose upcoming integrated search tools will probably be kept free from advertising.

Software challenges
Google also faces considerable hurdles in the technology side of desktop search.

"So many people equate search with Google, but in fact, there's an entirely different market for enterprise search software. And it is a complex problem to solve," said Sue Feldman, a vice president of content technologies research for IDC.

Google introduced an application for searching corporate intranets and desktop files two years ago. But the software makes up less than 5 percent of the company's business, or less than $48 million last year, according to the company's IPO filing. While Google has a couple hundred enterprise customers, it hasn't been as successful in that sector as it has in search and advertising.

Google has become popular because it's helped to improve web search by delivering fast, relevant results. But its formulas for the web that rely on the link structure of web pages are unlikely to translate well to the PC environment, as files and documents on the PC don't contain an inherent link structure.

One answer is to embed a common sticky note to applications and documents that would let people label these with a few keywords. That would make it easier to retrieve the files down the road. Application makers such as Adobe Systems and OS makers such as Microsoft are in a prime position to develop such tools.

Another approach, now under development by Microsoft, is to create intelligent documents with XML (Extensible Markup Language) links. These would enable people to input information into one document and funnel that data to other, relevant applications. Search tools would be built in, so related information could be found in disparate applications.

Autonomy, Convera and Verity are all companies that are working to solve these enterprise search problems and typically offer much more robust technology than Google's enterprise technology. Google's system tends to focus on simplicity and works particularly well with HTML-based documents.

"Google's real challenge will be in adoption: getting people to download and install it," independent analyst Matthew Berk said. "In order to search your hard drive, you need to install something that's pretty intrusive, that can reach deep down into your machine."

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May. 24,  ISSUE #024

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