Search Share: Google Gains, Everyone Else Loses (Again)

Bob Peck of Bear Stearns offers a detailed analysis of Comscore's domestic search share numbers for April.  Search is by far the largest category of online advertising, and number of queries is the primary revenue driver.  So query share is crucial. 

Bob's full note is available at Searchblog.  Here are the key points:

• Google's share of US queries jumped another 140 basis points to nearly 50%, up 27% year over year.  This is a continued deceleration of the y/y growth rate, but it's still impressive--especially relative to the rest of the industry.

• Yahoo lost 70 basis points to 27% and grew only 6% year over year.  Yahoo is doing better than the other major players, but this ain't saying much.  It is important to note that Panama, even if wildly successful, won't help increase query share.

• MSN dropped 60 basis points to 10%.  Given how much time, effort, and money Microsoft has invested in search over the years, this is, in a word, pathetic. (But not surprising).  Importantly, the $6 billion Microsoft is spending on aQuantive won't help this trend.

• Ask Network was flat at about 5% and Ask.com was flat at a dismal 2%.  Search is not TV, and Ask's massive advertising push has had no effect on the site's market share.  There is no reason to expect this will ever change.

 

Comments

[Victor]

Deceleration of market share growth is obvious because there is a ceiling of 100%

What's impressive is that Google is still consistently taking market share in a market that overall is still growing incredibly rapidly.

[DonDodge]

Henry, Remember that just 1% of search market share is worth $100M in revenue and over $1 Billion in market cap...even for the small players. I don't regard that as dismal or a failure.

Google of course commands higher multiples. Google has 50 market share points and $150B in market cap, so each 1% share is worth $3 Billion.

I wrote a blog explaining the numbers, both bottoms up and tops down, to get to the $1B and $3B per 1% of share. See http://dondodge.typepad.com/the_next_big_thing/2007/05/why_1_of_search.html

There is a lot of money in search...even for the small players.

Don Dodge

[Moses Kagan]

Just had a look at Mahalo, Jason Calcanis' new search engine, which aims to take share away from the big boys on the 10,000 top search terms. I've written up the results of my little test at www.moseskagan.com - but suffice it to say that I'll be sticking with Google for the time-being.