Google Sparks Search Wars

October 1, 2005 By: Jonathan W. Lowe

In the Internet giants' battle for market share, it's the public that wins — fast, free geospatial viewers.

During the past four months, Google, Yahoo, Microsoft, and Amazon have launched geospatial viewing tools linked to text-based search engines. They are free, fast, easy to use, rich in global data, and — as public users enthusiastically testify — they're cool!

Jonathan W. Lowe

Though few (if any) of their spatial capabilities are new to the GIS community, the tools' smooth online interfaces are capturing wider audiences than traditional GIS products have. The public is responding in unexpected ways, including serving their own map data through the new tools. This column investigates the market impetus for this sudden burst of geospatial offerings, their technical underpinnings, and their relevance to the traditional GIS industry.

Searching for Dollars

Because Internet search services are many users' point of entry to everything else online, several Internet giants — Google, Yahoo, Microsoft, and Amazon — are battling heatedly for market share in what some call the "search wars." In an Internet search context, market share means the percentage of total Internet searches performed using a given company's search engine. According to Web analytics firm WebSideStory, Google's share of U.S. searches rose to 52 percent in June, while Yahoo's and MSN's (Microsoft Network) shares slipped to 25 and 10 percent, respectively. All of these companies want to win the search wars because leaders in market share attract the most revenue from advertisers (who pay as much as 50 cents per click to appear atop a Google results list, for instance).

Google makes 99 percent of its money by offering advertisers a business model called online keyword advertising, or pay-per-click. Google might agree to list "sponsored links" (advertisements) for Nike in search results where the query contained the keyword "shoe" but would only charge Nike when a user then selected Nike's link and visited Nike's Web site. Promoters of keyword advertising claim it supports ratios of 1,000 potential buyers to every $50 spent on advertising. And, touted as more precise than radio, television, billboard, and other "buckshot" ad campaigns, keyword advertisements supposedly reach buyers who are already searching for whatever their advertisers are offering.

Is it a good business model? A cursory survey of various online offerings suggests that an advertiser must spend approximately $1,000 to set up a keyword ad campaign, then pay the search engine company ongoing pay-per-click charges determined by public usage. In the year since its initial public offering, Google's revenues have rocketed by more than 100 percent quarter over quarter. As a result, its stock price has tripled, hovering at around $300 per share in early September. Apparently, the keyword advertising model is indeed lucrative.

Figure 1. This Google Maps interface shows shoe store locations only within the downtown area of Los Angeles in the map extent. The ability to filter searches by local extent makes Googles keyword advertising more attractive to local businesses.