Google still thinking about search, apparently!

English: The relationship and evolution in Int...
English: The relationship and evolution in Internet Search Business (Photo credit: Wikipedia)

I was struck by how seldom I hear of Google’s search endeavours when I read about the recent release of their updated Search Algorithm, codenamed Caffeine. Given Paid Search accounts for 96% of G’s revenues you’d think it would be the focus of most of their efforts? It doesn’t look that way. Can Google’s solitary cash cow really be getting too little focus from the Mountain View Mafia?

The Caffeine Algo promises significantly fresher results as well as an adapted architecture etc etc – but it’s primary focus has to be on maintaining revenue momentum when the vast majority of effort seems to be focused elsewhere. More than ever, Google has to defend its position in search, not only is Microsoft is about to land its much vaunted Yahoo! partnership providing the first real chance of competing with Google, but there is the problem of a wholesale shift away from Web Search as the primary navigation tool in favour of Social tools such as Facebook and Twitter.

The cracks are already showing, Google’s Q1 Revenues were $6.77bn, up 23% from last year of which 96% relates to search. Clearly Google’s revenues will be hard to improve on through share gain, given their already dominant position, leaving only the increase in Internet Population, Searches per User and Revenue per Search as the growth levers. Google’s numbers show only a 7% YoY uplift in Cost per Click and a 15% YoY uplift in Paid Clicks, so that leaves only the Growth in Internet Population and the number of searches conducted by each to fuel growth – each under threat for the reasons listed above.

Taking a very long  term perspective, Apple and Microsoft were incorporated 25 and 35 years ago respectively, it looks like Google’s Cash Cow will dry up long before they find an alternative source of revenues and never at the yields offered by Search. The fan boys won’t be pleased.

One thought on “Google still thinking about search, apparently!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s