Powerset "Natural-Language Search" to Threaten Google? Please.

Much hullaballoo today with the announcement that a search engine start-up has licensed some cool "natural language search" technology from Xerox.  The start-up, Powerset, hasn't actually deployed the technology yet, but it's apparently pretty cool, so now the story is that Google shareholders should start quaking in their boots.

Google shareholders should definitely quake--the stock's expensive enough that any hitch in the company's performance could knock off 30% off the price before breakfast--but this fear shouldn't be because of any search-engine start-up.  A mistake that Google observers and industry participants repeatedly make is thinking that Google's dominance of the search business is a function of the quality of its search results.  Build a better search engine, this wishful thinking goes, and you'll bring Google to its knees.  Sorry, but you won't.

It's true: Google rose to power because it built a better search engine.  It's early product advantage, however, is not what preserves its power today.  What preserves Google's power is that it has become synonymous with search.  Except for some fringe fanatics who will always defect to the cool new thing, Google's user base has no idea whether its search results are any better than the competition's--and doesn't care.  All they know is that "Google" equals "search" and that, if they try a couple of times, they can usually find what they're looking for, so why bother switching.  (Don't believe me?  Just ask the folks at Ask).

For Google to lose the search game now would require a blunder of Yahoo-like proportions.  Specifically, Google would have to become so obsessed with, say, whipping Microsoft in the office productivity market that it took its eye off the search ball (the same way Yahoo did back in the late 90s, when it threw all its energies into becoming a portal and opened the search door for Google).  It is not inconceivable that this will happen, but its also not likely.  So no matter how cool that Powerset technology is, Google's shareholders can rest easy.

(And, of course, with a $150 billion market cap, they can also remind themselves that, if it's reeeeaaaaalllly cool, Google will just buy the company.)

Comments

[King Troll]

I'm back bitches and First. My stores are rocking. My biggest competitor DEMO (Pacsun company) is closing 72 stores in my region. This company needs to be shorted. They seriously suck The market is mine.

I just bought out 2 GAP stores. They sold like $700 tables for $50. I need investors. I'm looking to open 1 store per quarter in the short term. Should I grow it on my own and 100% for now - with slower growth? Should I try to get investors and grow much faster but give up some equity? I have zero debt and really am not in a hurry. I'm just worried Finishline's Man Alive store will move in on the territories.

[James D. Miller]

If Google's search engine is no better than others, shouldn't Google's competitors just pay people to use their search products?

[Ricklogic]

Google is selling at 15 times sales.

Remind the innocents out there that a stop loss will trigger a sell order at a prescribed share price but does not guarantee that the seller will get the price.

If Google were to stumble at the same time that the market goes into a significant correction at the same time that some other calamity occurs, Google could go into a magnificent and meteoric free fall. Google is not quaranteed to achieve world domination.

[aj]

Interesting from the Freakonomics authors:

http://www.freakonomics.com/blog/2007/02/08/google-minus-10-years/

[sufiy]

The truth is that Search is Commodity, and not in the good sense of this word with recent investment trend, but with its basic qualities which Are Indifferent to any other similar product from Yahoo!, MSN, ASK, Accoona you name it and switch cost is zero for consumer - competitor is just Click away. And now new guys are coming. Google is in free fall from here, Radio is not coming and its gone away founders will be competing with google, Video Is No good and pipes are clogged Will TV chief be sacked for his Own Opinion? CAPEX, Capex and more Capex on slowing growth and declining margins, next quick pit stop 450:

http://sufiy.blogspot.com/search?q=google

[Neal S. Lachman]

Henry,

You are right. If the tech is really that great, Google can buy the whole company. It's as easy as it sounds.

Ricklogic,

Your what-if scenarios that are coupled with macro-economic disasters (like recessions) is equal to doomsday-thinking. If global warming isn't stopped, we will all be snorkeling our way to work, and our neighbors will be sharks and other kind of bad-ass fish.

Google is here to stay, even if it makes a yahoo-like blunder sometime soon the company has and is still diversifying into non-search business. However, Google should keep search and selling ads at keep that as its main focus at the core of its business.

[TallTroll]

>> The truth is that Search is Commodity

Both true, and not. Although the apparent cost is zero (you simply use a different engine, type in a different URL), the "mental cost" is huge.

Why is it that Ask have such a low market share, when they've had the most technically advanced SE for years? Because users don't give a rat's ass about technology, or the share price, or pretty much anything. They know how to "drive" Google, and they trust it to give them decent results.

Unless something comes along that is either

1) Much easier to use
2) Provides clearly superior results
3) Preferably both 1) and 2)

they are #1 forever (NB I believe we will see examples of both 1) and 2) over the next 5 years - but bear in mind that "the next Google" might be Google. They certainly seem to be the leading candidate for it right now).

Google achieved their current superiority by achieving a 3) knockout at a time when AltaVista were drowning in spam, and not concentratin on search anyway, and Yahoo still thought human edited directory results were the way to go (they didn't get into organic search properly until the Inktomi purchase, and that was a bit of a fiasco) all the way up to 2004

>> If the tech is really that great, Google can buy the whole company.

Maybe. What if PowerSet really IS all that? What if Google make an offer, and they say "No"? Didn't G turn down, like, $3bn from Yahoo, because they thought they could smack them senseless in a straight search fight?

Given that PowerSet seesm to have a lot of ex-Yahoo types on strength, it's likely that many/all of the founding employees have already made some money, and WANT to be in the game for the long-haul, not just to achieve a target valuation and cash in

Without more details, I'm sceptical that PowerSet (or any other search start-up for that matter) are really going to challenge G in any serious way, but the possibillity remains, if you get the RIGHT people in the same place, doing what they love.

There were some sketchy noises being made about PowerSet recording more information per page to provide a better "understanding" of what that page is about, so maybe they do have something. It's certainly a route that COULD provide a Google-killing search engine, as it could address some of the major flaws in Googles current setup, exactly as they did to the then-incumbent dominant players when they emerged

[sufiy]

Blow after blow on tired stock: Second Biggest shareholder has reduced his stake and Copiright Lawsuit lost in Europe

http://sufiy.blogspot.com/search?q=google

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