Google's urgency in releasing
Desktop Search shows that it knows the fight over computer searching is
moving to new ground. Amazon brought out A9, Vivisimo introduced Clusty, and
Idealab, an investment company based in Southern California, has presented
Propelled by Google envy, new players and Internet industry giants are rushing
into the online search market, setting off a burst of activity that contrasts
sharply with the lull after the dot- com collapse of 2000.
To fend off its challengers, Google has
furiously intensified efforts to add services to its brand.
Last Thursday, it introduced Google
Desktop Search, a program that is a direct challenge to Microsoft's control of
desktop computing because it searches for information on a user's personal
computer as well as on the Web.
Branding the Search
In recent weeks, Google has also
announced Google Print, to compete against the Search-Inside-the-Book feature
of Amazon.com and Google SMS a software tool for searching the Web from
But despite its push into new areas,
some experts say that Google may be vulnerable because the search market, one
of the Internet's most profitable areas, will increasingly be shaped by
non-technological factors, such as brand. And that shift may play to the
advantage of larger competitors like Microsoft and Yahoo. In fact, Google's
urgency in releasing a desktop search program shows that it knows the fight
over search is moving to new ground.
"Microsoft will have a meaningful
impact; they don't have to dominate to make a difference," said James
Friedland, a San Francisco-based analyst for S.G. Cowen, an investment firm
headquartered in New York. "If they start to gain share, it will slow
down Google's growth."
Other analysts contend that there is
plenty of room in the search market for both small and large competitors
because profit from online advertising much of it based on advertising linked
to search results is growing fast.
"Every indication is that
corporate advertising budgets are increasingly allocated to the
Internet," said David Garrity, a financial analyst at Caris, a Wall
Street investment firm.
Rising spending means that Google could
continue to grow even as more companies enter the field. A test of these
opposing views could come soon, perhaps before the end of the year, when
Microsoft brings out its new search service.
Google's smaller rivals have also
introduced new services in recent weeks. Amazon brought out A9, a search
engine that allows users to maintain a running history of their Web travels.
Vivisimo introduced Clusty, a search engine that uses artificial intelligence
to categorize search results. And Idealab, an investment company based in
Southern California, has presented Snap, a search engine designed to permit
easy sorting of search results.
While none of the new search services
present an immediate threat to Google, the competitive pressure on the company
will intensify even as its stock soars. Google shares were at $141.88 in late
trading Monday. The company is to report quarterly earnings Thursday.
Ultimately, Google may have the most to
fear from Microsoft, which could well use its Windows monopoly to dominate
search functions. Such concerns have, in turn, caused Google to enter
Microsoft's domain with Google Desktop.
For Microsoft, providing better access
to information stored on a personal computer's hard disk has been a goal for
more than a decade. Microsoft has said publicly it will soon offer a better
search function for PCs. There is also widespread speculation in the industry
that Microsoft intends to integrate its PC search functions with a Web search
engine to combat Google.
Apple Computer has also become an
active competitor in the desktop search wars. This year, Steve Jobs, chief
executive of Apple, showed off Tiger, the company's next-generation operating
system, which is to have extensive text- and media-search capabilities when it
is made available next year.
Beyond the Internet
These industry developments have forced
Google to go far beyond Internet search. "We really want to make this a
photographic memory for computer users," Marissa Mayer, director of
consumer Web products for Google, said of Google Desktop.
For now, new products like Google
Desktop are not expected to contribute directly to revenue. But Google
executives would not rule out the possibility of eventually offering paid
services or advertising, using the technology that retrieves data from a
The Desktop software, which can be
downloaded from the Google Web site free, will retrieve information both from
the Internet and the user's computer hard disk. For example, if a user
searches for the word "flowers," he will be able to see Web search
results as well as any e-mail messages and files stored on his PC that contain
Mayer said that it took Google 18
months to figure out a way to turn its free Web search engine into a
profit-making enterprise by selling advertisements linked to search terms.
That business generated about $690 million for Google in the last quarter.
Yahoo, Google's closest rival in search, reported last week that it had $765
million in advertising revenue for the quarter.
New Battles Ahead
In the meantime, Internet innovations
are becoming hot topics of conversations again in Silicon Valley. Web 2.0, a
conference in San Francisco this month, featured a variety of new Internet
start-ups and technologies.
"We're entering the period of the
Cambrian explosion," said John Battelle, a prominent Internet
entrepreneur, in comparing the new ventures taking root in Silicon Valley to
the geologic period when many new species emerged.
competition for domination of the Internet may also mean refighting the
battles of the past, in particular the Web browser wars. There have been
reports that Microsoft's control of the browser market may be loosening.
America Online, for example, is thought to be preparing to re-enter the
Google is also rumored to be
developing a Web browser as part of its strategy to defend itself against
Microsoft, whose new Web search service will almost certainly be integrated
into its own browser, Internet Explorer.
"If you drive by the Google
buildings in the evening," said a person who has detailed knowledge of
the company's business, "the lights that are still on are the ones on
the floor where they are working on the browser."
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