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ANALYSIS: Ganging up on Google

The saga of Microsoft's proposed £22 billion acquisition of Yahoo has had more twists and turns than the plot of an average episode of Eastenders, but at the time of writing it appeared to be back on again. If successful, the deal would combine the second and third-placed players (Yahoo and MSN) in the burgeoning search marketing sector, and create a new player potentially capable of challenging the dominance of Google. The UK search market is currently worth £2 billion, and 94 per cent of all searches made from this country go via the Google interface. And although precise figures do not exist, given Yahoo and MSN's traditional focus on consumer search, Google's dominance of B2B search activities is likely to be even more pronounced.

But what does this mean for B2B marketers? As both buyers and users of search marketing services (paid and non-paid), do business marketers need a credible alternative to Google? And if the acquisition were to go ahead, how would a combined Yahoo and Microsoft go about creating such a rival, when both had failed previously as separate entities?

Market leader

The consensus of search marketing experts is that dominance of a marketing channel by one supplier is not an ideal situation. “Any monopoly is a bad thing,” points out Lisa Ditlefsen, head of search at Base One.

Rob Pierre, director of Jellyfish, agrees but is reluctant to criticise Google. “I don't believe it is abusing its position. It is always working hard on its technology. But more competition will inevitably drive the cost of search marketing services down.”

This is echoed by Teddie Cowell, director of Guava, who comments, “Google isn't doing anything bad, but it is risky for companies to put all their eggs in one basket.” It's a curious and rather unique situation, with commentators retaining a distinct sense of warmth towards and empathy for an organisation, despite suggesting that it probably has too much power and influence.

Yet observers are less consistent on whether a combined Microsoft/Yahoo would be able to establish itself as a meaningful B2B search rival to Google. “They would need an enormous marketing budget to achieve this,” says Ditlefsen. “They would need to change user behaviour, which is very difficult – it's automatic for people to use Google. It's now used as a verb – it's become part of the English language.”

Cowell also believes stimulating a change in the behaviour of B2B searchers will be a very tall order. He suggests Google's success to date is partly based on the simplicity and consistency of its interface, claiming changes that other search engines have made have been responsible for users abandoning them. “If Google changes something significant [in terms of service or interface] this may level the playing field,” he comments, “But it's in Google's hands – it will be very hard to usurp them.”

Existing B2B relationships

However, both Cowell and Pierre believe that Microsoft may be able to leverage existing relationships in the B2B space to gain traction in a way that Yahoo never could. “SMEs all use Micorsoft Office therefore it has lots of brand equity,” says Pierre. “If they can invest the right money, this is a massive opportunity.”

Cowell goes further. “Microsoft has options open to it that most people haven't even thought of yet,” he says. “For example, it could give Vista [the latest MS operating system] away for free, but have it paid for by advertising.”

Regardless of the potential, all observers agree that any bid by Microsoft to increase its share of the search market – with or without Yahoo – would not be successful overnight, and would have to form part of a concerted long term strategy, backed by significant investment.

In particular, Cowell sees the proposed acquisition (which he's been predicting via his blog since 2006) as only part of a much bigger evolution in the technology industry. He points out that with Google launching its desktop application – Google Aps – and Microsoft increasing its focus on search, these two organisations – which currently have minimal areas of competition – may in the long run be fighting head-to-head. Although as he acknowledges, “It's very early days for this change – it will be a decade long transition.”

The vertical dimension

Whether Microsoft's bid for Yahoo is successful or not, it seems unlikely that any serious rival to Google as a B2B search medium will emerge any time soon given the inherent difficulties. So what other alternatives may challenge its hegemony? Vertical search engines have long been touted as having the potential to offer advantages over generic or mainstream solutions, but commentators have mixed feelings on whether they can transform this into reality.

Cowell, however, says vertical search is already here, citing the likes of consumer property site Rightmove as an example of a high-traffic vertical search engine. Tony Millen, marketing director of B2B search engine Kellysearch, perhaps unsurprisingly believes the potential for vertical search is huge, but suggests it may work best to complement Google-based activity rather than replace it. “B2B companies would be better served by combining the scattergun approach of adwords and verticalised search,” he says.

Millen also admits that the vertical search engines themselves have to raise their game to make their solutions more compelling. He says that whilst traditional directory providers are increasingly moving online, searchers are demanding better and more sophisticated results. “Paid inclusions are old-school,” he says. But he admits that the cost of developing vertical alternatives remains prohibitive. “Everyone has content – the battle is making it relevant. Search and retrieval engines are out there, but they are expensive.”

Over time, he believes vertical search engines with ambitions to be taken seriously will have no option but to make this investment.

In the meantime then, Google's dominance of B2B search marketing looks assured, and whilst this may not be the ideal situation, it's one that most observers feel surprisingly comfortable about. How long Google manages to maintain this profile as the benign despot of the search industry remains to be seen. But as long as it continues to offer excellent products and services and deliver excellent results, it will have few complaints – and fewer competitors.


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