Did anyone get rich by betting against Apple recently? The short answer is probably no, unless you were lucky enough to pick the short round about Christmas last year. So, if I were to suggest that Apple is planning to take on Google as a search provider, who’d give me $50 against them making that work? Any takers? Didn’t think so.
There has been a rumor circling out there for a while that Apple is going to build their own search engine. The challenge of doing that is both simpler and more difficult than it was back in the early days. It’s simpler because the processor power needed to do something that huge is much cheaper, but the scale of the task has ballooned along with the internet.
As Apple inserts themselves into more and more of our lives, it makes perfect sense that they would try to claim at least a part of the search pie. I (like many people) have Apple devices on which I mostly run Google Apps. Since mobile and wearable continue to dominate our interaction with the web and each other, it might be more convenient if we could use a decent Apple search rather than always having to divert to Google.
Apple has given us perhaps the strongest indicator yet by announcing webmaster guidelines around their web crawler or search bot. Just in case you have a life and aren’t familiar with the term, a web crawler is a program that roams over the net following links and indexing the content it finds. You can stop it from indexing all or part of your site by naming it in your robots.txt file. Apple is now telling webmasters which syntax to use to stop Applebot from indexing their sites.
Google and Bing have an enormous head start in terms of familiarity for both users and advertisers, but Apple has a massive user base to which it could immediately propagate its search. It doesn’t mean that people will use it, but if they put it on the home screen, I bet may would at least try it.
The search pundits (yes such things exist) are speculating that this is Apple only looking to build a search for Siri. But why stop there? If you are Apple, with the brand recognition and user base they have, why wouldn’t you go the whole way and jump into search full on? If they are just now announcing their bot, it won’t happen overnight. But in a year — absolutely possible.
The revelation that Google continues to be the top search engine is up there with the Pope being catholic or the toiletry habits of bears. Yes of course, Google is king with a little over two thirds of explicit search going to Google sites… mostly Google.com. What’s more interesting, perhaps, is that the race for second is getting less frantic. There was a time when Yahoo really seemed to care about search… sadly those days seem to be behind us. In a weird statistical fluke Yahoo passed Google in sheer page views last month, but before anyone pops too many corks over at Yahoo bear in mind that news or email page views are worth a tiny fraction compared to search page views… so, simply having more of them really doesn’t get you that much… Google’s revenue outstrip Yahoo’s by a factor of ten.
According to the latest Comscore data, Yahoo maintained its modest 11% market share as Microsoft (Bing) picked up a point. It is a little sad that Yahoo no longer seems to care as much, and doesn’t even include search as a strategic target. Bing is at least pretending to care and doesn’t seem satisfied with a touch under 18% market shares. The “also ran” category in search continues to be a race to oblivion between AOL and ASK, both of whom slipped a little in July. If I’m honest, I don’t honestly remember the last time I knowingly used either product other than to check that they are still alive and kicking. Weirdly, search is so valuable that even having one whole percent (like AOL) is still worth a ton of money, so hanging for grim death to an apparently meaningless market share is still worth doing. Meantime, the Google parade continues as they maintain a firm market lead with no meaningful competition in site… as always, it’s good to be Google.
I was at the Adtech show last week, meeting with the great and the good of the online advertising world, and it was to say the very least a very interesting few days. The largest single topic of discussion could be broadly characterized as “what’s up with Yahoo?” The current excitement comes from the changes we have all seen since their new fearless leader took charge. For the longest time, Yahoo and Google have pursued quite different search growth strategies. Google has focused on growing the Google.com brand, driving as much traffic to the mother ship whilst offering only the breadcrumbs of revenue represented by AdSense to the wider world. It is theoretically possible to get hold of a real Google search feed to offer to end users, but you have a stronger chance of being elected the next Pope after this new one than getting hold of one.
At the same time, Yahoo built a syndication network; where at one point, pretty much any site or tool with a pulse could offer Yahoo powered results to online searchers. The results of the strategies speak for themselves… Google search giant… Yahoo not so much. Obviously that’s not the only thing that made the difference, but it was a factor. Yahoo, having taken the syndication route, did a pretty good job of doing that and in so doing spawned an entire industry of folk dedicated to offering Yahoo results to all comers getting chubby at the Yahoo buffet… then came regime change.
Marissa Mayer is a very smart cookie, and as an original Googler is no doubt used to the Google way. She shocked pundits early in her rein by down playing the importance of search in the future plans of Yahoo (search …smerch…who needs it!?), and supposedly spurred on by the denizens at Bing (who power Yahoo search), she has “set her cap” (I’m watching a lot of Game of Thrones right now so tend to lapse into old English on occasion) against syndication. High quality search traffic which used to score 8 all day long now scores 5 one day, then 7 the next, then 4.5, then nine. Clicks jump from 30 cents to 3, and back for no obvious reason. It’s not just us seeing this… all over AdTech sharp young men with shaved heads, and intense women with power purses were hurling themselves out of high windows or could be seen sobbing into their third Martini at lunch.
The net result of all this weirdness has to be that syndication revenues are cratering at Yahoo. That wouldn’t matter if they already had 68% of the market like Google has, but for a relatively distant third place which has relied on syndication for so many years, this change in strategy is a lot like the Republicans deciding that they don’t need the Old White Guy vote in favor of a rainbow TuTu… it’s cute… but the other guys already have that model and who is going to pay the bills? The hope in the conference was that someone would get bored or freaked out and things would return to normal… but if the new normal is this, the next AdTech San Fran may well be five guys outside the Starbucks at the Moscone center.
Search at Yahoo has languished somewhat since Bing took over their search back in 2008 after a failed bid by Microsoft to buy Yahoo. There has always been an antitrust concern about the search on Yahoo being powered by Google…so I was interested but not that surprised to read today that Google contextual ads will now start showing up on Yahoo properties and more importantly Yahoo mobile traffic. To be clear this isn’t the same as main search on Yahoo being taken over by Google, rather these are contextual AdSense ads displayed on billions of Yahoo web and mobile pages…which will presumably represent a significant revenue opportunity for Yahoo. It makes perfect sense as Google’s ads are generally more valuable than Yahoos and they have a larger stack of advertisers to play with. At the core of the deal is the dramatic growth of mobile. Millions of people use Yahoo mobile content to keep them up to date with news, celebrity, finance sports and email. Google has a much stronger mobile platform so adding Google mobile ads to the enormous Yahoo mobile inventory. Google doesn’t (yet) have the kind of vertical interest Yahoo boasts so that’s likely to be an upside for them both.
Google survived an FTC investigation into monopolistic practices last year and is still under scrutiny in the EU, so making a move which further centralizes Google commercial control could be thought of as ballsy.. but in a race to grab as much real-estate as possible before the new Search at Facebook gets out of short pants it makes perfect sense.
Six months into her new job Marissa Mayer the new queen of Yahoo was able to tell some reasonably good news to investors in her Q4 results call yesterday. Yahoo saw their first uptick in revenue for a good while as Mayer shared the good news from the annual meeting of the great and good in Davos Switzerland last week. She pointed to two clear areas of focus for the newly invigorated Yahoo. Not surprisingly mobile is one of them. That makes a huge amount of sense as mobile is rapidly catching up with the desktop. For all its failing Yahoo has a ton of great content which million of people go to each day for their daily dose of sports, news gossip etc. Making that content mobile and personalized for their millions of users through apps and targeting ads around that offers a significant opportunity for revenue growth. However, the other focus Mayer pointed to is search….yes really search. I have been in the search business for about a million years and back in the day Yahoo powered its own search. Then they brought in the cuddly friendly guys at Google to power it for them (under a powered by Google brand) to run their search for them. Their assumption was that people would use Yahoo for everything including search. Back then before high speed connections users could either sit and wait for a yahoo results page encrusted with ugly ads to load or they could hop over to Google and have a fast clean ad free search result from Google. Weirdly I remember discussing this with several Yahooligans at the time and they honestly didn’t think it would be a threat. A decade or so later…they aren’t quite so sure.
Yahoo ceded search to Microsoft’s Bing a while back so for Yahoo to attempt to gain a stronger position in search without even owning the technology is incredibly ambitious. Doing search well is hard, doing it as well as Google does given the 30 trillion pages Google indexes is incredibly hard. Google has beaten off legal challenges for their rivals and the FTC and become both a noun and a verb…it’s tough to beat a competitor which has become the name for the activity. The mobile opportunity is probably more compelling. When I just checked there are about a dozen separate Yahoo apps out there. The question is can Yahoo weave those separate strands into a strong unique mobile user experience…before Facebook does? The jury is out on that. Certainly Yahoo has done a better job than Google whose mobile news app is just horrible. Their biggest problem is that Google has become the way that most of us navigate the chaos of the Internet and Facebook has become the way we share pics of our kids….all that’s left is mobile, and the clock is ticking on that too.
I have been in search for what feels like a lifetime but is in reality a little over a decade. Way back in the day when Microsoft terrorized the tech world and earned the fear and loathing of most tech folk Google was cute as a puppy and dedicated to doing good…indeed “Don’t be evil” was their informal company motto. Back then there were many heinous things perpetrated by the mad and bad on us humble net citizens. We were subjected to browser capture and constant bombardment from pop ups and spam. Over the years much of this net thuggery has been eliminated in good part because the sources of income online have become centralized and in good part controlled by the major advertiser aggregators Google and Yahoo/Bing. So it was with some festive irony that I read the account of Google’s acolyte in the UK Sarah Hunter defending Google against attacks from British Parliamentarians recently. The line I like the most was “we are not the bogeyman of the Internet”…I don’t often LOL but I did then.
There are arms full of accusations being brought to the stake to which Ms. Hunter has been shackled and several honorable members would clearly like to see her and her fellow Googlers burnt alive. Something which especially annoyed the Brits (who love to pay taxes of all kinds) was the elegant way Google perfectly legally avoided paying over $300 million in taxes. The fact that Eric Schmidt defended that as both legal and praiseworthy “Capitalism” really annoyed some of the left tier members. The Brits fundamentally don’t like red in tooth and claw Capitalism…it’s thought of as rather lower class and worse awfully American to try to make lots filthy lucre. I disagree which is a good part of why I’m writing this from SoCal not South London. Add to that the accusations that Google is skewing their results in favor of their own listings and is over all monopolistic and all around beastly, it’s been a tough week for Google in the UK.
Sticks and stones may indeed break bones but serious fines can hurt, so whilst the name calling for being a little evil around the edges may be smart there is a danger that if Google doesn’t get right with the EU (much worse than just the Brits as there are angry Germans involved and you know how that can go) and come to some kind of rapprochement to settle the two years of investigation by stinking foreigners which Google has recently been enjoying things could turn nasty. If the EU goes after them and wins the standard fine is 10% of revenue off the top…a mere $4Bn. That may sound a bit farfetched but it’s the same threat Microsoft faced back when they were public enemy #1 and they settled with the cheese and sausage eaters. It appears the price of evil has gone up.
I have been as Search Engine Strategies in Chicago for the past couple of days and I’ll have some specific search items to report later but for now I have been struck by how small we are as an industry. The search business is worth about 50-60 Bn this year with the bulk of that revenue for what is effectively a media buy going to Google, Yahoo and Bing. In dollar terms that’s more than is spent on Magazines and Newspapers put together in the US. The search business has roughly 8 major trade shows per year scattered through the big cities. I’m guessing most folk hard core in the business attend at least one show per year….some like me do multiple shows. SES Chicago is one of the larger shows and at a reasonable guess there are about 1,000 attendees with another hundred or so folks working the dozen or so booths in a small exhibit. Google employs about 34,000 Googlers, Yahoo and Bing maybe another 10,000 between them. So at a rough guess the entire industry employs maybe 60,000 people total…..each of whom commands about a million dollars of revenue each. Obviously it’s a massive over simplification but how many people work for the 2,000 significant magazines and 1,200 daily and 5,000 weekly newspapers I wonder. It’s striking how much power and influence search has in all aspects of our lives…and relatively speaking it’s controlled by a tiny handful of people….the other word for that is a monopoly….right?
I was excited to attend the Street Fight conference in New York this week. I even moved flights to get to NYC ahead of the Hurricane Sandy. Street Fight pulled the plug on the entire event Sunday morning and looking at the forecasts and the impact so far it’s entirely understandable. Just in case you haven’t come across it Street Fight is all about “Hyperlocal.” Hyperlocal is the catch phrase Du Jour for all things local. It looks at content, commerce and strategy for all things local and has a nice edge about the industry….which can be a bit dry and dull. They have an excellent daily roundup of all things local and if you don’t already subscribe you probably should. They have rescheduled to mid January and I’ll be there then. Good luck to all those in the path of the storm…stay safe we on the West coast we’ll be thinking of you.
Meantime Windows 8 was announced and although I haven’t managed to lay my hot little hands on it yet they do look to have done some very interesting stuff around the new search. The whole Window 8 paradigm offers a range or key tasks as objects on the desktop rather than a list of items or programs. The new search follows a similar theme. The traditional Bing is still available but the new Bing is optimized to work with newMicrosoft Surface OS devices and I do like the way they present results as a matrix of easily clickable cells rather than the traditional list of blue links. The way the results work is interesting also. It lets the user push the results bar to the side and navigate within search without the constant back and forth of traditional search. Bing also has a range of search Apps which let you focus on a topic like travel or images. I think it’s an interesting paradigm and I look forwards to working with it.
As I have mentioned in many previous posts I like Yahoo….I have always liked Yahoo. Back in the day when they were the cool kids complete with huge goofy purple chairs they didn’t let being wildly successful turn them into corporate monsters. They have famously had a horrible last few years with Google cleaning their clock in search and multiple other miss steps. When Marissa Mayer assumed control it was clear that she had to pick the battles she was going to fight. Back when she joined in July I appealed to her from these very pages to put Local on her to “fix and focus on” list. I didn’t think for a moment she’d hear me (I’m not that delusional) but I was saddened a little to see in her recent discussions around Q3 results that Yahoo won’t be focusing on local going forwards. It’s understandable, Yahoo local is broken. As one of the people who attempts to work with them on behalf of our clients they have been grinding to a halt recently. It would take an effort worthy of the New Deal to jump start the platform so it’s understandable that the resources might be further diverted from this red headed step child. Central to Yahoo’s Brave New World is (of course) mobile. Call me crazy but don’t local and mobile go together? The recent Apple Maps fiasco points at how hard it is to do maps and by adoption, local. Yahoo Local as a directory has been stuck without focus or a reason to thrive, and has missed the kind of location based innovation and reviews championed by FourSquare and Yelp. Could Yahoo have taken on local as a central part of their mobile strategy, probably. However if the end game for Yahoo is to land on the carrier deck of one of the other flag ships in the continuing online Battle of Midway being waged by Apple, Google and Microsoft it probably makes less sense to invest in something which could be improved with minimal cost by simply signing over the entire thing to another player like Bing.
A moment’s silence please in memory of Yahoo Local.
Bing trying to be cool is a bit like a librarian in a night club. If you aren’t inherently cool it’s tough to fake it or buy it. I admit it, I’m not cool – haven’t been since the Regan administration. I was at a couple of major conferences last week and the lack of diversity was staggering. Both very influential events were packed with uncool white-bread types like me. I even heard that another even better heeled gathering of the great and the good partied with featured guest rapper Flo Rida (I have a hefty side bet that most of the crowd thought his name was pronounced Florida). So I was disappointed, but not surprised, to see the recent sacking by Microsoft of two of the top marketing guys who were starting to make Bing a little cool, maybe slightly edgy. The cited reasons for the firings of Hadley and Carver were the usual corporate doublespeak of “violating policies relating to management of company assets and vendor procurement.” Put more simply: They were over achieving in the fun department.
It was certainly refreshing to see Bing take an aggressive strategy of linking their brand with cool trend setters like Jay-Z. The recent sack-ees also masterminded the Bing Bar at South by Southwest where a killer good time was apparently had by all. I guess the sackings were the hangover. The Microsoft fun express jumped the rails last week and the question that remains is will Bing go back to its library shelves or will it stay for last orders and a drunken taxi ride home. I hope they do try to continue being fun. Search is in danger of getting dull. Search used to be cool, and now all of the cool kids are the social media glitterati, while us poor search guys are looking for our library cards.