Further Thoughts on Search & Advertising

Robert Cringely follows up his previous post about Google building data centers in South Carolina. I commented on the latter here.

I have not fully digested the article yet, but this interesting tidbit jumped out at me:

How will these three companies compete with the Google proxy strategy? As far as I see, they can’t compete. They come up short in too many ways, but the biggest way is money, moolah, cash, loot. None of these companies can afford to do what Google is doing, building hundreds of huge data centers around the globe.

This dovetails into the “Winner-Take-All: Google and the Third Age of Computing” and a follow-up on Skrentablog.

It strikes me that these articles make the implicit assumption that this is a zero-sum game, that there is only a finite number of searches to be run and only a finite number of ads to be served.

Both of which are just plain wrong.

Searches are generated by users, and the number of users on the internet is growing yearly. More users mean more searches.

Advertising on the internet is still only a small fraction of the total amount that is spent on advertising (about 6% right now) and that is set to keep on increasing over time. This article on MarketingVOX has some numbers as well as forecasts.

All this tells me that there is a lot of room for growth, and competition from established players as well as startups.

Also we can’t forget that Google came from behind in a field with some very strongly established players, Altavista and Lycos spring to mind. And this will happen again, you can count on that. Google has a lead now, but they can’t afford to stay still.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: