Search Engines

Google

Google is everyone's darling business right now. The stock price is high, the company was rated the best company to work for, and it generates an enormous amount of positive media coverage. But it's worth analyzing the company to try to see through the hype (if it is hype). Nick Carr has written a thoughtful article about Google.

As you can see from the chart below, Google has outperformed the broader market over the last year. If you had invested $1000 in Google stock a year ago it would be worth about $1150 today, while an investment in an S&P500 index fund would be worth about $900.

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A NYT article on 2/1/08 discussed the importance of network effects to Google's success.

A Business Week article discussed the ad words auction used by Google.

A New Yorker article gives an overview of Google's business and its impact on competitors (Auletta 2008).1

Here's a quote from a May 6, 2008 New York Times article2 that explains the different segments of the online advertising market:

…with its acquisition of DoubleClick this year, [Google] is going after the market for online banners and graphical ads, which is Yahoo’s bread and butter….Even in graphical advertisements online — the banners, video ads and social network ads, that marketers use to create brand awareness — Google remains a relatively small player. It is an important market that is expected to some day match the search advertising business in size. “Search is great, but you can’t advertise Coca-Cola in search,” said Peter Sealey, a former chief marketing officer at the Coca-Cola Company. “Google is going to try to compete there, but they don’t have the same algorithm that they had in search.”

Powerset

Powerset is a natural language search engine. It's in start-up mode, but it's seen as significant because it's a potential competitor to Google, according to this May 12, 2008 article published in the NYT.

Real-Time Search

Sites such as Twitter and Facebook provide real-time information. Until recently (October 2009) that information has been difficult to search, but now several search engines are seeing if there is money in real-time search.

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