Google recently announced a year-on-year 7% increase in revenue, with profits up $25 million. Not bad for a recession. Yahoo, meanwhile, just announced (or tried not to) a 12% decline in quarterly revenue, with a 19% decline in search-ad revenue year-on-year.
Paid search appears to have three contenders, in theory. Yet the charts speak for themselves:
Google:
Microsoft:
Yahoo:
At this year’s Software Industry Conference in Boston, I gave a talk on The A to Z of Online Marketing. Letter R dealt with realism.
From the handout:
“Like the search engines, different segments of the software industry have their own class system.
Level one is the undisputed king who towers many metres above anyone else. There’s no need to name this particular search engine.
Level two has the second tier of engines – Yahoo, Bing, Windows Live.
Level three has MSN, Ask and AOL.
And the fourth level is everyone else.
In the realm of graphics software, Adobe sit at level one, Corel, Xara & Serif at level two, hundreds of others at level three, and thousands at level four.
But when we consider the possibility of ascending from one level to the next, it starts to get interesting.
A level four company can lift themselves to level three simply by having a good product.
A level three company can lift themselves from the over-populated darkness of obscurity into the second level with a lot of work, a great deal of skill and a really good product, but it can be done.
However the chances of a level two company climbing the throne to level one are almost zero. Yahoo aren’t going to take Google’s place, and Corel will never dominate Adobe.
It can’t be done – at least not usually, and not quickly.
However within the second level, all occupants are far from equal. Yahoo seems to send more targeted traffic than Bing and Windows Live, and more people seem to be using PaintShopPro than Xara’s products. And these positions are up for grabs.
So even though PaintShopPro has no chance whatsoever of toppling PhotoShop, it can gain market share from Xara and Serif, and can even absolutely dominate the second level.
So be realistic. Your chance of overthrowing your market king are a microdot above zero. But you still have every opportunity to dominate your level within your market, and if you’re in the third tier, the opportunity to pull yourself out is there for the taking.”
I’ll be giving a revitalised version of The A to Z of Online Marketing in Berlin next month, at the European Software Conference. I hope to see you there.
