May 25, 2004 3:07 PM PDT
Study questions Google's long-term dominance
The survey released Tuesday by San Mateo, Calif.-based market research firm Vividence found that Google's results vary little from those found on other search sites. In addition, despite the search king's continued success in attracting customers, its users are less likely to click on advertisements listed on its site.
Google representatives declined to comment on the study due to the quiet period the company has entered as part of its pending initial public stock offering.
To gather their results, researchers at Vividence surveyed and monitored 2,000 individuals as they interacted with search engine sites, including Google, Ask Jeeves, Lycos, Microsoft's MSN and Yahoo. The company found that Google clearly remains consumers' favorite, largely because of the search engine's less-cluttered interface. In fact, Vividence said almost 90 percent of Google users reported having a "strongly positive experience," while only 68 percent of users said the same of Yahoo, 50 percent for Ask Jeeves, 48 percent for Lycos and 41 percent for MSN.
Yet the study revealed that search results on Google differ little from answers to the same queries on its competitors' sites. When comparing the accuracy of the search engines in providing information on the same topic, the results were close. For instance, Google users searching for the leading cause of death for people between the ages of 25 and 34 found the information they were looking for 55 percent of the time. The company's rivals fell close behind with between 52 percent and 54 percent success rates, Vividence observed.
"This close performance shows you how successful Google has been at creating a brand and convincing people to come back to the site," said Peter Watkins, chief executive at Vividence. "But you have to wonder--will Google's competitors simply copy its style and win away customers?"
Several of Google's rivals have already launched stripped-down versions of their sites, including Yahoo, which offers users the ability to ditch its wider portal properties at a simplified search site. Amazon.com's A9 search engine is another competitor that has swept away much of the clutter in favor of Google-like simplicity.
Beyond the threat of copycats looms perhaps an even more disturbing finding for Google. Vividence claims that Google trails behind its rivals in encouraging people to click on advertisements, the site's primary source of revenue. Google ranked last in Vividence ad tests that examined how frequently people followed sponsored links or advertisements.
Ask Jeeves garnered the most clicks on advertisements, followed by Lycos, MSN, Yahoo and Google, respectively. Google provides Ask Jeeves with search-related ad links. Watkins said part of the reason why Google lags behind its competitors is the company's stringent practice of keeping ads well marked, while the other sites sometimes mix solicitations in with regular search results.
"Should Google sacrifice some of its image in order to get more clicks on ads? Maybe yes," he said. "This is a company on the verge of a $2 billion IPO, so you'd have to think that competitors will copy their format, and if these competitors can also sell more ads, it makes you wonder about the future."
Watson predicted that Microsoft, which is known to be developing a new search engine and has garnered limited success from MSN, could be the biggest threat. If Microsoft can create a search engine that looks and performs like Google and charges less to advertisers, it could potentially steal users, he said.
Other industry watchers conceded that Google's rivals are likely plotting to mimic its strategy, but they questioned whether that would threaten its top spot. Denise Garcia, an analyst at Stamford, Conn.-based Gartner, expects Google to continue to win advertising dollars with its high-volume traffic, while keeping an eye on the competition.
"When it comes to advertising, the real issue is the total number of unique users, so Google still wins out. Even if a smaller number of people using a different site click on ads more frequently, at the end of the day, it's a numbers game," Garcia said.
"The Yahoo(s) and MSNs are certainly going to try everything they can to chip away at Google's lead, but I think it will be tough for them to do so," she said.
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