CommerceTuned 2008 Search Round-Up
Welcome to the CommerceTuned 2008 Search Engine Round Up in which we pick the news and developments in online search in 2008.
1. May 2008 - Google Introducing Open Keyword Bidding on Branded Terms
This was probably the biggest news to come out of Google this year with the search giant allowing companies (UK and Ireland) to bid on competitors registered trademarks in the Adsense Pay-Per-Click (PPC) market. Companies such as HSBC now had the ability to bid on branded search terms such as Barclays, Natwest, Lloyds TSB and vice-versa with the only obvious winner in this case... Google.
Many brand owners gasped in horror at the implication of such a move which ultimately dilutes their brand value and associated click through rate. For small brands with limited PPC resources, the protection previously afforded to them was a lifeline which now swung dramatically in favour of larger, deeper pocketed rivals.
A study carried out using Hitwise data in April 2008 calculated this enshrined 'protection' as 7.6% of site traffic which represented the difference between the search traffic going to brand owners website in the UK and US where open bidding has been in place since 2004.
Six months have passed since the change was introduced and we are pleased to see that the new rules have so far had very little impact with a series of 'gentleman agreements' supposedly being created by major competitors who can surely ill afford a new bidding war at a time when profits are tumbling.
2. February 2008 Microsoft & Yahoo Merger?
In Feb 2008, Microsoft launched a £22.4bn bid for its closest search rival Yahoo in an attempt to create a company that can compete against the overwhelming dominance of Google. Microsoft has openly admitted in the past that it's search strategy ten years ago was practically null and void allowing a new player to enter the market that went on to become one of the fastest growing corporate companies in the world. Despite the huge resources and direct access to millions of users through its software monopoly, Microsoft has since failed to make any real dent in Google's dominance and this deal seemed a sure fire solution. On both sides however there was scepticism. Yahoo shares had fallen 46% over the previous 4 months (see chart below) and many thought that Microsoft were paying over the odds for company that was continuing to lose market share and profits.
Despite Microsoft offering a 62% premium on Yahoo's shares, finally increasing to 70%, the deal broke down in May 2008 as the Yahoo board felt the offer considerably undervalued their company.
Why was this event important you may be asking? Well ultimately the biggest winner from all of this (except for the corporate lawyers acting for Yahoo and Microsoft) will be Google as it can continue to dominate the search landscape whilst its rivals are fighting and jostling for the breadcrumbs in 2nd and 3rd space. Comscore, the information internet provider released data in November confirming that Google's global search share rose 0.4 percentage points to 63.5 percent from October to November. In Europe alone Google averages around 80% of market share. The loser is ultimately the user as such dominance by one company can only lead to higher costs in the paid search market and a reduction in viable search alternatives by businesses and consumers.
3. Rising Importance of Universal Search
'Universal Search' is Google's philosophy of producing search results that integrate a range of different data mediums (images, video, audio, text etc) against a variety of sources (books, news, website, blogs, shopping etc). Although officially launched last year, 2008 has certainly been the year in which it has made the biggest impact to the search landscape.
A search for 'Barack Obama' yields video content amongst news results and traditional web pages. Meanwhile Google users looking for information about J K Rowling are served with a Google Book Results that include reviews, previews, and options to purchase.
Universal search thus offers multiple avenues by which businesses can spread their content and increase their traffic flows as they are no longer restricted to optimising traditional text based content.
So impressed have we been with these new 'access points' that in May 2008, CommerceTuned launched a fully fledged video optimisation service dedicated to maximising video content. We have already seen impressive results from this new service and already have plans to launch a range of new and innovate products in 2009 that will offer our clients the competitive advantage in universal search ...watch this space.
Article by Paul Rudman, Director of CommerceTuned.