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25.1.2011 Google faces "social threat"

Google strengthened its hold on the global search advertising market last year, but a rising "social threat" from platforms like Facebook may influence the company's future trajectory. IHG and Screen Digest estimated the revenues deliveredby Google's paid-for listings climbed 20%, to $25.3bn, in 2010. The search industry as a whole was worth $30.4bn worldwide, a 17% expansion year-on-year, giving Google an 83% market share - an uptick of two percentage points. When supplemented by display - where sales rose 61% - and mobile, Google's total revenues were placed at $28.9bn, a 22.5% increase.

Vincent Létang, senior analyst and head of advertising research for IHS, argued this constituted a very impressive performance. "2010 seemed like it might be the year that Google would surrender some of its dominance in the global search advertising market," he said. One obstacle was the introduction of Microsoft's "decision engine" Bing, alongside the organisation's search alliance with Yahoo. Another possible danger has been the advent of powerful domestic competitors in various countries, as shown by South Korea's NHN and Russia's Yandex.

The surge of social media, and particularly Facebook, could thus prove the sole "real challenge" for Google, IHS and Screen Digest suggested. "Social networking is the only major internet trend where Google has failed to make its mark by either acquiring or developing strong products, despite semi-failed short-lived attempts," said Létang. More specifically, the fact Bing provides sponsored links in Facebook searches, and the integration of "social results" into the Microsoft-owned property's organic listings, demonstrates the potential impact on Google.

B.L. 25.1.2011