Google Will Exit The Search Business

by Christopher Paul on February 13, 2007

Slowly but surely, Google will have to get out of the search business (or cease innovating it to the point where its search product isn’t a core source of its business). To be clear, Google’s main business – despite any motto or altruistic corporate creed – is to sell advertising. Although, you can actually think of Google as an advertising broker more than a seller of advertising (but that’s a conversation for another day). Google has simply leveraged its search breakthroughs as a spring board for its AdSense and AdWords systems as a way to generate revenue. And while Google has innovated in many ways and in other web-based products (Gmail, for example), it will have to abandon the goal of cataloging the world’s information if it is to grow as an organization.

One reason for Google’s ultimate demise in search is the mere fact that, at some point, someone will build a better search engine. Google as reigned supreme for such a long time that it may appear that Goliath might never be toppled. But Google was a David once… and history will repeat itself – Google will be toppled by some other smaller company with a better way to search the web. The competition will draw users away from the “bread and butter” of their image and Google will, ultimately, have to rely on their other products to carry them through.

Another reason I believe Google will shift away from searches is because there is only so much a search technology can accomplish. Businesses – shareholders, really – demand revenue growth more than anything. At some point (soon, I believe) Google will have introduced its search systems to nearly every aspect of our lives and it will not be able to gain the growth it needs to satisfy its business. Over time, the search technology will be a stagnant part of its core business and, like the POTS lines of Ma Bell telcos, will be a cumbersome business to maintain. Other products that don’t rely on its search technology will be the only way to grow and the intellectual property that brought them fame and fortune will be relegated to a standard feature for their other accomplishments. Think of automatic transmissions in automobiles; they were once optional features that people paid for (and manufacturers marketed to help distinguish themselves among their competition) and now they are standard features in almost every car – automakers have to innovate in other ways to gain market share. But the biggest reason why Google will have to give up or stop innovating on its search systems is regulatory and legal.

Google has taken the Brainiac approach to storing the world’s information and people are using legislation and the courts to stop them. Take, for example, Google’s struggles with its book search system. Publishers cried out in defense of their copyrights when the search giant announced they were going to retain digital copies of all types of text for its users to search against. Publishers sued Google after they went live with their book system for fear people will print out copies of their property without being compensated for it. Ultimately, Google came up with a compromise but it did not reach its pure and altruistic goal of making information easily available to the world.

Similarly, Google was sued when they searched (and, therefore, linked) to news reports of the lawsuit originally filed by Pets Warehouse against some alleged defamers. Google (and others) merely linked to the reports of the news; the cataloging of the news was the basis of the amended complaint, however. While there are some decisions that say linking (and in some cases deep linking) are legal in this country, in others countries courts have ruled this to be an infringement on copyright. Who, after years and years of this, wants to involve themselves in continuous litigation – especially when they have suffered a string of legal setbacks in Europe?

Google’s latest loss comes from Belgium where a website’s content was cached in Google’s search engine. Normally, this content, now cached, is free to whoever visits the site in question. But because the content eventually becomes ‘for pay’ content after a said amount time, caching it becomes a copyright violation. Google is now forced to remove the cache if the copyright holder complains or risk fines; this search innovation has cost them. This ruling also extends to simple news aggregation – and not just caching – so its a serious blow to the company and all news aggregation services in general; despite the obvious ways around automated aggregation, Google is left fighting for what many consider their obvious right and they lost.

In absence of searching and cataloging the world’s information, what is Google to do? They’ve done very well for themselves at taking their search technology and applying it to personal data. Gmail, Docs & Spreadsheets, Notes, and a slew of others back up that idea. They are also good at mashing information that has always been considered public information (and public domain); Google’s mash up of business’s directory information in its Maps application is part of it; Google Transit and Ride Finder are similar. And furthering the public information, they provide value to code searches with their aptly named Google Code Search. And, let’s not forget that Google has its advertising system it can improve.

I suspect that Google will continue to innovate in other areas that extend the public/personal information dichotomy. I’m sure there are those 20% projects that will offer users the ability to store and search for files; they are rumored to be launching such a system soon. I also believe that they can create new applications that will compliment their Docs & Spreadsheets apps; Presently is supposed to launch soon with that suite and there are other applications (think Visio) that could be created. All of these applications can be funded by their ads system or offered for a fee to small businesses for revenue. There are other ‘thick client’ apps like Google Desktop and Google Earth that can all be enhanced and there are plenty of mobile apps – thin or thick – that Google can create and revolutionize the world with.

But at some point, when the revenue returns on the classic web search go down, Google will spin off, license, or outright concede defeat for its core search product. If not, I believe it will stop innovating in the search algorithm and ride the success of its new (and more profitable) applications to which it can supply ads to; and if they do innovate in search, it will only affect those applications.

Trat For February 13, 2007 at 11:11 PM

Excellent logical flowthrough analysis of a topic that never seems to be adressed.

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