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Searching everywhere - May 13, 2008

Excellent piece by Richard Waters in today's Financial Times analyzing Google's increasingly Microsoft-like dominance of the web search business in the wake of Microsoft's own failed bid create a viable competitor by buying Yahoo. Among other points, Waters notes that Google's search business is growing much faster than Microsoft's operating-system business and is likely to surpass Windows in revenue sometime in 2009. Well worth reading in full.

Silicon Alley Insider's Henry Blodgett elaborates on Waters' theme (adding charts and graphs), describing both businesses as "natural monopolies," implying that Google's share of the search and search advertising business will likely approach a Windows-like 90%.

Blodgett notes that, already, Google has been able to leverage is search dominance to develop a secondary business in AdSense that is also approaching monopoly status, much as Microsoft leveraged it dominance of the OS business to establish Office as a near-monopoly in office productivity applications (a business that also is now being challenged by Google through its online Google Apps).

But while Waters and Blodgett focus mostly on the implications of Google's dominance to advertisers and other would-be ad platforms, it should also concern content owners and online publishers. As Media Wonk has argued before, search is the operating system of the web: the principal means by which users navigate and a critical arbiter of which applications succeed and which don't.

If you don't SEO your web site or online video application to index well with the dominant search engine, your content will be at a competitive disadvantage for users. That has a direct impact on your traffic and thus you're ability to monetize.

The situation will become even more acute if Google is able to use the knowledge it is gaining from owning YouTube to develop an equally dominant video search platform.

Perhaps Google won't use that knowledge for evil, as founders Sergei Brin and Larry Page promised it would not at the time of the company's IPO. But, verily, we are a fallen race.

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