Wednesday, May 20, 2009

What Will the World Do with More Search Engines?

Microsoft says it will introduce its new search engine within the next few days. The world's largest software company has called the project "Kumo." It may change that name before the public sees it. Yahoo! (YHOO) and Google (GOOG) seem like odd names for search engines, but those choices never seemed to affect their success. Another company recently launched a search product called Wolfram Alpha. At least in the case of this software, the inventor, Stephen Wolfram, put his name on it.
Aside from the major search engines, which include Google, Yahoo! and Microsoft, there are a number of minor companies in the competing for users' attention. Some claim they are not search engines, probably because they do not want to seem so small compared to Google. A very few web surfers use Ask.com, Answer.com, and About.com. Search company, GoshMe, claims that there are half a million search engine products. That figure seems high, but it is impossible to disprove.
Microsoft argues that if its search engine brings back more relevant results than Google or Yahoo! that people will eventually migrate to the "best" product. That may not be true. Google has become a habit for more than two-thirds of the people who use search engines in the United States. It is generally considered the best product, but in the final analysis that decision is subjective. Google is certainly the search program that gets the most positive votes if use means anything.
"Kumo" may be just as good as Google, although the largest search engine keeps improving and adding to its functions. It is far too early to tell whether Microsoft can pick up a single new user even if its product is 99% as good as Google in the eyes of most people who look for things online. A cult has developed around Google, the company and the product, just as it has around Apple (AAPL) and its Mac and iPhone products. Loyalty is not always the by-product of function, although function often creates loyalty.

Microsoft is running out of time in the search business. It only has 8% of the US market, and even that has been shrinking. The company would like to form a partnership with Yahoo! so that together they can challenge Google. If Microsoft gets a good response to "Kumo", it may walk away from any relationship with Yahoo! and the No.2 search engine company's shareholders will have lost a chance to make money the way that they did when their board rejected Microsoft's offer to buy Yahoo! more than a year ago.
The trouble with the search business is that its future may have almost nothing to do with whether search results get more accurate. Google's information is already more than adequate for the huge majority of people who are trying to find information online. At some point, and that point has probably been reached, people cannot tell the difference between flying in an airplane that is at 32,000 feet and one that is flying 1,000 feet higher. The change in perspective means nothing to them. All they know is that they are as high as they have to be to get where they are going.
Search is facing the same problem as the chip business. Intel (INTC) and AMD (AMD) make semiconductors that are so powerful that very few PC buyers can use all of their computational power. A lot of what the chips can do is wasted. Upgrading to a more powerful processor does not mean much to people who cannot tell the difference. That leaves a few corporations and people who play complex video games as the only discriminating buyers of PCs with ultra-powerful processors. Just three or four years ago, the difference between one generation of semiconductor and another meant something to the casual PC user. The chips are too good now. Almost no one cares that a new Intel product can make one billion computations a second. Almost no one even knows what that means.
Creating a new search engine is a tremendous risk at this stage because it is remarkably expensive to build and market one that has any chance in the mass market. To make the proposition harder, not only do people prefer Google to other products, but most people will not be able to tell whether a search product coming to market now is better or not. Good is so excellent that it is not good any more.
— Douglas A. McIntyre
source:-http://www.time.com/time/business/article/0,8599,1899804,00.html

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