Winner-Take-All

2. Is search a winner-take-all business?

Like the article says, a winner-take-all (WTA) market is unforgiving. Most of the time, those who dare to compete with the winner inevitably face extinction. If search is a WTA business, then Google is on its way to becoming the big winner. Google’s win might be less intention and more the power of network effects. Unfortunately, Google does not register gains every month but according to Hitwise, an online measurement service, Google has surpassed the 70 percent market share benchmark. It estimates that Google has 72 percent of the United States total online search market, versus 17.9 percent for Yahoo and 5.4 percent belonging to Microsoft’s two search services, MSN and Live.com. Even better network effect numbers come from web site owners who track where their visitors come from report that Google’s search engine now refers 80 to 90 percent of their visitors. Competitors face extinction because of their unbelievably unprecedented network effects. As the article from this past weekend states, most people just use Google out of habit and we all know old habits die hard. Plus, one of Google’s ten rules states “It’s best to do one things, really, really well.” Google has one of the world’s largest research groups focused solely on solving search problems. Their tireless dedication to the search market has lead to new products such as Gmail, Gchat and Google maps which only to serve to spread their brand name even farther and increase their already strong network effects. Will there ever be anything better than Google? I don’t think so.