Are these the Google killers?

In April 2002, The New York Times anointed Google “the king of search.” It’s impossible to argue with that today. Google, which is headquartered in Mountain View, California, conducts 48 percent of all online searches in the United States, compared with Yahoo’s 28 percent.

And although Google’s sales growth has slowed ever so slightly, it is beyond impressive for a company that is already huge. In the most recent quarter, Google reported revenue of $3.2 billion, a 67 percent increase over the same period in the prior year.

Yet despite Google’s dominance, there are dozens of companies working to bring new search tools to market. Last year alone, 68 search-oriented firms raised venture capital, according to VentureOne, and countless others have been self-funded or backed by angel investors.

Yahoo and other members of the old guard are also showing signs of life.

What’s behind the renewed competition? The upstarts believe there is more than enough opportunity to go around. The market for search advertising is expected to hit $11.1 billion by 2011. And Google’s reputation has taken a pounding. Keyword prices for valuable terms (example: “medical malpractice”) are skyrocketing, crowding out smaller advertisers.

Those who can afford keywords can be the victims of click fraud, by which they are charged for meaningless traffic. They must also compete for traffic with sham websites called sportals, splogs, and flogs, which divert users to irrelevant sites.

To fight these scam artists, Google constantly tinkers with its algorithms, but that can sometimes frustrate the legitimate efforts of advertisers to optimize their rankings.

Besides these shortcomings, some competitors sense that Google is increasingly distracted by its ballooning portfolio of products. There’s the plan to scan the world’s books, the digital medical records, the no-frills office software, and even a map of the moon. Viacom’s $1 billion YouTube lawsuit, filed in March, is seen by some rivals as a portent of headaches to come.

In public, Google is sanguine about the rise in competition. “We’ve always said that small companies should be buying ads on Google and other search engines,” says Sheryl Sandberg, who oversees the company’s online advertising sales. “But we think we offer the highest quality of information to our users.”

Few would argue that Google is set for a fall anytime soon. Still, the bets being placed against it offer a fascinating menu of options for business owners in any industry who want to upset the status quo. Here’s a look at five ways of taking on Google.

Click on the following link to know about – “Google Killers”

http://www.inc.com/slideshow_INC/slideviewer.cgi?list=gkillers&refresh=10&partner=rediff

Web 2.0 Long Tail getting fatter

Three separate news stories involving numbers this week caught my eye. iLike announced it has now has 6 million registered users and is now adding 300,000 new users a day. Apple’s Safari browser for Windows has now had 1 million downloads. Finally SpaceTime, a 3D browser passed the 100,000 download mark.

All three may not seem obviously related, but there is something they all share: large user numbers.

It wasn’t that long ago that 100,000 users was considered huge for a Web 2.0 related business. Today a small startup such as SpaceTime can gain those numbers in two weeks. 6 million users three years ago would have seemed an impossible dream, and yet iLike joins a long and growing list of Web 2.0 sites with 1 million or more users. Web 2.0 offerings are improving their appeal to a broader audience which in turn is driving growth in the overall market: the Long Tail is getter fatter.

Although this fattening of the Web 2.0 marketplace makes it more difficult to stand out from the crowd, the marginal cost and ROI potential has now improved. Consider the SpaceTime browser. Immediately many would question the need for an alternative browser, yet this isn’t an all or nothing proposition. Every single user of SpaceTime presents a ROI for the company due to search deals. An average SpaceTime user might return $5 per month to the company by clicking on Google ads or surfing eBay; $500,000 per month @ 100,000 users. The figure could be lower or higher, but it’s still a return. Safari will be operating on a similar model for Apple. The need to find appeal has actually decreased as a percentage of the overall market. Conversely the bar to creating a sustainable business hasn’t risen in line with the number of potential users, today startups can achieve with a smaller percentage of the overall market.

From a developers or startups view, the fattening long tail should be seen for what it is: a marketplace that has improved opportunities for smart startups. A bigger marketplace makes today and tomorrow an even better time to build a Web 2.0 business than yesterday. A fatter long tail means that as a whole there will be an increasing number of success stories and sustainable startups, a win-win all round.

Q1 Internet Ad Revenue Closes in on $5 Billion

Internet advertising revenues reached a record $4.9 billion for the first quarter of 2007 – a 26 percent increase over the $3.8 billion in 1Q06, and a 2 percent increase over the $4.8 billion in 4Q06 – the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) announced, MarketingCharts

Only two weeks ago the IAB reported fourth-quarter and full-year 2006 internet ad revenue figures: in 4Q06, $4.8 billion (a quarterly record and 35 percent more than the year-earlier period); and $16.9 billion for 2006 – a new annual record (and up 35 percent from 2005).

“The continued growth of online ad revenues clearly illustrates marketers’ increased comfort with the extraordinary vitality and accountability of this medium,” said IAB President and CEO Randall Rothenberg.

“The recent results are particularly impressive when the size of the advertising revenue base is taken into account,” said Peter Petrusky, director, PricewaterhouseCoopers.

“Given these results, we may expect continued strong revenue growth buoyed by an expanding broadband subscriber base, which could translate into more users spending more time online and offers a platform for rich media and video ads that dial-up connections can’t render.”

Google and Salesforce head towards tighter integration

 

On June 5^th Google and Salesforce will announce a marketing and distribution alliance that will tightly bind google adwords to existing salesforce tools that track sales from online advertising.

Salesforce and Google will be starting an extended partnership encompassing marketing and distribution of their products across 43 countries. It will begin with the integration of Google Adwords and Salesforce’s lead generation tools into a new application called “Group Edition”

Group Edition will enable Adwords users to track Adsense referrals to their site and build up a customer profile based on a the data a user enters into a site and their navigation path. Businesses will handle their Adwords campaigns through Google, as usual, but Salesforce takes over from there. When potential customers click through to the businesses site, Google tells Salesforce what search terms brought the user to the page and where they navigate throughout the site.

The application will cost $600 for 5 user accounts and come with $50 of Adwords credits.