

Browser market: Search engine market - tristanperry
http://www.gabrielweinberg.com/blog/2011/03/browser-market-search-engine-market.html

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mjfern
_> Is this an apt analogy for the future of the search engine market?_

No, I don't think so.

There are tremendous learning effects, economies of scale, and network effects
in search that do not exist to the same extent (or at all) in the browser
market.

I. The learning effects arise from the number of searchers and advertisers
using a particular platform over a given period of time. This enables Google
(with the largest market share) to improve its algorithm at a faster rate in
response to the behavioral data that it collects. The sheer amount of data
that Google collects permits much deeper (and faster) multivariate analysis
relative to competitors.

II. The economies of scale exist because Google can spread its huge fixed
costs of developing, refining, and operating its search engine over a much
greater number of users. For instance, if Google employs 2x the number of
engineers as Microsoft in search, but fulfills 4x the number of search
requests, its per search engineering costs are 2/4 = 50% of Microsoft's. The
same holds for other significant fixed costs, such as data center costs.

III. The network effects arise from a feedback loop between searchers and
advertisers. As the number of searchers increase on Google search, it attracts
more advertisers because advertisers can reach a broader and more targeted
audience. The reverse is true to some extent as well. For instance, as the
number of advertisers using Google AdWords increases, it attracts more
searchers, assuming that searchers find some value in the sponsored search
results.

Note that the learning effects and economies of scale exist in browsers, but
not to the same extent as in search. There are no obvious network effects in
the browser market, while the network effects in search are quite strong.

Google's dominance in search will persist into the future, until:

1\. A competitor develops a protectable technology (e.g., new algorithm) or
user experience that delivers significant value to the average searcher and/or
advertiser.

2\. A substitute for search emerges, which provides a much more effective
method for obtaining information that you would otherwise obtain using Google
search.

3\. Google is unable or unwilling to respond to the competitive threat in #1
or the substitution threat in #2 in a reasonable period of time.

Given Google's quick response to customer feedback (e.g., content farms) and
technology change (e.g., real-time search), I don't have a sense that the
company is resting on its laurels.

Note there is still room for niche search engines, such as DuckDuckGo, that
emphasize particular features of significant importance to a segment of users.
For instance, DuckDuckGo does not collect or store a user's IP address,
yielding greater privacy.

~~~
epi0Bauqu
I think this line of thinking greatly underestimates the value of UI and the
integration of APIs. Take Yahoo. They're moving to Bing for deep results but
concentrating on UI and weaving in other structured content for a lot of the
head searches. That approach may well be good enough to start gaining share
again over the medium term.

~~~
recoiledsnake
I think that's covered by point #1.

~~~
epi0Bauqu
Right, but then it becomes an apt analogy again :).

~~~
mjfern
I don't think it's an apt analogy because:

1\. There are significant barriers to entry in search that do not exist in the
browser market, including learning effects, economies of scale, and network
effects. Any enhancements to the technology (e.g., algo) or user experience
(e.g., UI) by a competitor must provide substantially more value to searchers
and/or advertisers to overcome the significant network value (effects) in this
market.

2\. Despite Google's size it's still quickly responding to market and
technology changes making it difficult for a competitor to chip away at its
market share. For instance, despite significant investments by Microsoft (and
some creative and smart decision-making), Bing has only been able to gain
incremental market share, primarily at the expense of Yahoo. Google, thus far,
has been able to sustain its dominance, commanding about 90% of the global
search market.

"While Bing hit 4.37 percent and Yahoo dropped to 3.93 percent, Google still
dominates worldwide with 89.94 percent of the search engine market share, the
web analytics company reported."(March 1, 2011;
<http://blog.searchenginewatch.com>)

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btipling
The more people use webkit based browsers and less of the others the better
the world will be. I feel for the guys at Mozilla but I can not recommend
Firefox to anyone, at least not on Macs. It is the slowest application I run.
Application switching to or from Firefox is amazingly slow, as in I can count
the finger of my hands as I am simply alt+tabbing to Firefox. In addition it
eats memory and if you leave it open long enough it just starts bugging out in
weird ways.

~~~
tristanperry
Firefox has been getting progressively more memory hungry, indeed. At the
moment my Firefox is at 314 MB with very few addons and 4 tabs open (none of
the tabs have flash or dynamic stuff going on). I've seen it reach half a gig
of memory easily, too.

I've heard that Firefox 4.0 is better though; will half to give it a shot
soon.

~~~
btipling
Mozilla often says 'wait until the next version, the next version will fix all
this.' A few versions later and the problems are still many and I doubt that
this legacy will change.

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recoiledsnake
>I'm hesitant to quote any search engine share market #s currently because I
frankly just don't believe them, or at least they don't seem to line up with
anecdotal evidence at all. Google seems currently way more dominant than they
sometimes get credit for.

Huh what is that supposed to mean? That made the article completely useless.
Atleast offer something of substance, even it's an anecdote. Does it mean that
Google is 100% according to anecdotal evidence?

But the very next line says: >Yet at the same time alternatives are arising.
And more importantly wrt to the analogy, there are alternatives that in my
opinion offer a different enough overall search experience to be preferable to
some people, much like Web browsers.

Like which ones? Bing? Duckduckgo? Blekko? Coolio? Anything else?

~~~
epi0Bauqu
I just think Google has a much higher than 70% share. Here are the latest #s:
[http://searchengineland.com/research-bing-powered-engines-
gr...](http://searchengineland.com/research-bing-powered-engines-grew-6-5-in-
january-63998)

Yes, Bing, Blekko, Yandex, Searchme/Wikia (before they sadly went away), and I
know of others not yet released.

