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October 17, 2010

Google keeps growing while Facebook and Microsoft make classic mistake

Google is up to 66% of all searchs. Facebook and Bing( Microsoft) are combining to improve search results on Facebook.  FB and Bing are making the same mistake that many search companies have made in the past.  Google is not a search company.  

The reason that Google's revenue went up 23% in the last quarter is it's strength in advertising. Google does a better job of matching the ads that somebody might click to the person doing the search.  Google also does that on straight content.
Facebook is driving huge amounts of traffic but the revenue per page impression is tiny compared to Google.  Bing has 11.2% of searchs but it does not have have 11.2% of search revenue.  Anything above 5% would be surprising.

Google is an advertising engine disguised as a search company with a robot car division.  Google rarely announces it's improvements in delivering better ad quality.  Advertising is driving the revenue.  Google's real reason for caring about search is that it does not need to share revenue on search page impressions.

Google talks about the improvements in search like Instant.  The reason to brag about Instant is that Google has spent years and billions of dollars developing the fastest and most efficient web serving infrastructure on the planet bar none.  They did instant because they could.  Any other company that tried to do a search after each key stroke would eliminate any hope of profitability.

Google is improving it's revenue because advertisers find that a dollar spent on Google returns better revenue than a dollar spent anywhere else.  Not in all cases but most.  It would be nice for Facebook to improve it's search.  The poor results from it's advertising is the real problem.


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