As Google moves toward its anticipated IPO, there are limits to the company’s future success. According to a new Forrester Research, Inc. (Nasdaq: FORR) report, Google’s dominance will be diluted as Microsoft and Yahoo! gain strength in the search industry.
“Google has seen tremendous growth, in terms of consumer use and paid search ad revenues. And, although it continues to be the most innovative search company out there,” says Forrester Research Principal Analyst, Charlene Li, “Google can’t be everything to everyone.”
Although Google has a strong search following, its users visit other portal sites frequently.Google will lose ground to its portal competitors MSN and Yahoo! as both improve and expose search to their loyal users by placing search boxes near high-traffic features like Hotmail and Yahoo! Mail. Additionally, Google’s biggest technology advantage — PageRank algorithms — will become less relevant as the Internet moves away from hypertext information to incorporate new types of content, like databases and executables, which require a different type of search.
Google will win only one of the three search battles ahead. In addition to maintaining its position as a general search utility, it will become the dominant pay-for-performance ad network, delivering the biggest and best audience through its network of publishers, including abc.com, iVillage, and nytimes.com. Microsoft will emerge as the leader in integrating structured, desktop search, powered by its newest version of Windows, due out in late 2005. Yahoo! will win the portal battle, by extending its enhanced search throughout its network, creating a satisfying customer experience.
For additional information on Google and the company’s upcoming IPO, read Chairman and CEO of Forrester Research George F. Colony’s commentary, “My View: Googlescape.”