Summary
1. The battle with Microsoft (and to a lesser extent Yahoo!) has seen Google offer partners better terms for ‘search deals’ - and so, it needs to diversify its absolute product line up.
2. Google's key competencies outside of monetizing online behavior are in forging partnerships and product innovation.
3. In Europe, Microsoft's reputation is improving given the well-received Vista launch, its Windows for Mobile suite of products and Xbox home entertainment center. Clearly leading to a two-horse race for online hearts, minds and eyeballs.
Analysis
The battle with Microsoft (and to a lesser extent Yahoo!) has seen Google offer partners better terms for ‘search deals’ and bundle other products into these deals. And so, outside of absolute search term volume growth, Google needs to diversify outside of its ‘search comfort zone’. Google’s core asset may be the quality of its personnel – tirelessly working to figure out how to extend the principle of search into everything. However, the danger would be that it becomes a disjointed set of businesses from search to Telephony to mail/storage and now software…
Google’s mission may be to ‘organize the world’s information...’; however, their wider business plan seems vague given the multiplicity of product launches. Google sets the benchmark in monetizing online behavior and clearly demonstrates its competencies in forging partnerships and product innovation. This has enabled it to form strong partnerships (primarily with leading ISPs/Portals) – contributing approx 55% of revenues.
A quick word about Microsoft - whose vista launch though not as loud as previous product launches has been well received. But it is quietly making good progress with its Windows for Mobile suite of products and Xbox home entertainment center. Yahoo through its portal is focusing on entertainment – but its cash generator of search seems to be losing out (in the yield states) to Google and the fast improving MSN search. All this leads to an interesting battle for online hearts, minds and eyeballs!
