Expect FAST, the Norwegian company behind Alltheweb, to be acquired by Overture or possibly even Microsoft. That will leave 3 players in online search, the rest won’t matter.
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Lets play a game and imagine that we are in charge of Google strategy. The diagram above is my stab. There are two principal axes, both of which Google has started on, but do not yet appear to form part of a core strategy. In other words, the Google appliance currently looks like a distraction and distinct business compared with the core search business in which the adwords service is the biggest initiative. Continuing from the idea of Google beating Microsoft to desktop search, the vertical axis proceeds from Internet search to Unix server based intranet search, followed by Windows client desktop search and, lets say, a Symbian cellphone/PDA client. Components of each search, such as desktop email, and cellphone contacts, can be hosted by Google or combined for access from any machine anywhere via a thin client. Value added services such as sync and backup and security are offered….
David Coursey, “Here’s what I think the next Windows will look like”, writes that Longhorn, Microsoft’s next generation operating system, won’t be ready till 2004 and that it will be later rather than sooner. One of the key components of Longhorn is a long awaited overhaul of the Windows file system that will allow proper full-text searching. File systems built on top of databases are not new, IBMs AS400s have had this for years, so it could be argued that an update to Windows is not technological progress but fixing inelegant software architecture. The Internet has made the use of full-text search familiar and necessary and the lack of this ‘must have’ feature in Windows is now embarrassing. If this is not going to be available till 2004 then perhaps there is an opportunity for Google. Imagine a Google toolbar that provided indexing of files on your computer, rather like…
So what’s going to happen in the online search industry? Here are my predictions: Overture will buy Espotting who have the biggest market share in paid results in Europe. Paid results and editorial results companies will merge. i.e. Overture will merge with either Inktomi or FAST. The industry will be dominated by the above merger and Google, but Google will dominate. Yahoo and Microsoft will use anyone but Google. i.e. Yahoo will look at an alternative to Google for editorial based search results. Yahoo, MSN, AOL and Google will be the destination sites that matter. Because Google own one of these destination sites they will not be held to ransom by giving up too much revenue share in the same way that Inktomi, FAST and Overture are.
Very neat – An elegant script to highlight terms when someone arrives at your site from a Google search. Textism Tools: Google Hilite Now if everyone did this I wouldn’t need to hit the Google cache to find what I’d searched for on a page.
Online search is expected to generate more than $2.5 billion in revenues in 2004. That gives an aggregate Market Cap. for all search companies of around $12 billion. Assume that Google gets 40% of this and Google would have a potential value of $5 billion. But Google is perhaps different – it will win a battle with Overture for paid listings, and will dominate the search space – and search is the bedrock of the Internet. Microsoft owned command line access to your own machine and built on top of that. Google owns the command line for access to other machines, a very powerful place to build a company worth much more than $5 billion.