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The Ebbs and Flows of Market Share

Gord Hotchkiss — Thu, 16 Jul 2009 17:29:57 +0000

It’s been just over 6 weeks since the birth of Bing. While I didn’t actually say Microsoft’s new search baby was ugly, I was less than optimistic about it’s chances of unseating Google in a popularity contest. So, with every measurement panel carefully following Bing’s debut, I think it’s time to see just how little engine is doing in the search (oops, make that “decision”) sandbox.

Let the Record Show

First of all, much acrimonious commentary has been attributed to me about Bing. I just want to say I never said Bing was a failure, a bad search engine or a step backwards on Microsoft’s part. I simply said Bing would not break the Google Habit, despite 100 million dollars of advertising. In fact, here’s exactly what I said would happen. Driven by the advertising, people would temporarily disrupt the playing out of their habitual Google script, try Bing and find that it wasn’t all that different from using Google, better in some ways, worse in others. Without having a compelling reason to consciously break the Google Habit (which is hard cognitive work) they would just go back on autopilot and continue to use Google. A temporary blip upwards for Bing would soon disappear, at roughly the same time as Microsoft’s $100 million ad budget, and we would all go back to mindlessly Googling what we’re looking for.

Survey Says…

So, what’s happening in terms of market share? Well, the various numbers seem to show that Bing has gained a small uptick in market share (the exact amount is difficult to determine, but Compete puts it at a 0.3% gain in share), Google’s up as well, by about half a percentage point, and Yahoo! and Ask are both losing ground in what seems to be an irreversible death spiral. If you just look at the Google and Bing numbers, the words “I told you so” naturally spring to mind. And this is still with the $100 million tap fully open. Google could come out of this with the biggest net gain, paid for by Microsoft’s ad budget.

But the story gets much more interesting, and more compelling for Microsoft, if you look at what’s happening with Yahoo! and Ask. This is something I didn’t think about in my original forecast, but the logic seems clear in hindsight.

26% Still Up for Grabs

When Bing debuted, there was a 26.7% percent of the US search market not owned by Google, again according to Compete. At the end of June, that shrunk to 26.1%. And that’s the share that Microsoft should be paying close attention to. Don’t worry about breaking the Google Habit. Concentrate on picking off the weaker contenders. And right now, when it comes to search, Yahoo! and Ask are lying limp and lifeless on the side of the road, easy pickin’s for a Bing drive-by. In the past year, Yahoo is down in market share by almost 3 and a half points, and Ask is off by a full point. All of this has gone to Google, plus some. They’re up almost 10 full share points in the past year.

Is Google Domination Inevitable?

If these are the trends, is it inevitable that Google will eventually own the entire search market? No, because we always like alternatives. We get nervous when there is a de facto monopoly, we’ll keep even a weak contender on life support just to give us an alternative. At the height of the Window’s OS dynasty, Mac still managed to hold onto 4.5% of the market and Linux 0.5%. Since then, Mac has come back to take almost 9% of the market and Linux almost a full point (according to Net Applications).

That’s the other thing to remember about humans. If we have a viable underdog, we’ll throw it more than its fair share of support. Case in point: the browser wars. In 2004, Explorer owned 91.35% of the market. The fledgling Firefox was their biggest competitor, at 3.66%. But over the past 5 years, the balance had shifted decidedly in Firefox’s favor: 65.85% for Explorer vs 22.39% for Firefox. The fact that Firefox improved their product at a much more aggressive rate than Microsoft didn’t hurt either.

I believe Google is getting very close to its natural market share cap. And the stronger the alternatives, the lower that cap will be. Yahoo! and Ask have lost their appetite for competing in the search arena, but Microsoft has a viable contender in Bing. I still don’t expect it to break a Google habit, but it could well become our number one alternative when we’re ready for an occasional break from our habitual search rut.

How ironic! Microsoft’s Bing playing the White Knight to Google’s Evil Empire!

Originally published in Mediapost’s Search Insider July 16th 2009

Microsoft’s Talk vs. Microsoft’s Walk

Gord Hotchkiss — Thu, 09 Apr 2009 21:01:56 +0000

Not so many columns ago, I urged Microsoft to do something amazing in search. Last week, they did. But it wasn’t in a good way. I was on the road last week, and I saw three different things land in my in box about Microsoft and their search efforts. With each email, my frustration mounted. Finally, Friday as I was sitting in Seattle airport I couldn’t contain myself any more. I sent an email to the most senior person I knew at Microsoft Search. The gist of the email was “don’t do it”. Yesterday, I got an email back thanking me for my “honest” feedback. Yet somehow, I don’t think it will make a difference.

Here were the three email delivered articles I saw:

One – Google Can’t Innovate but Microsoft Can

“Google does have to be all things to all people. Our search does not need to be all things to all people.” – Steve Ballmer

“Being the underdog in the Internet- search market has one advantage for Microsoft Corp. Chief Executive Officer Steve Ballmer: He says his company can experiment, while rival Google Inc. plays it safe. – Bloomberg.com

I believe Ballmer is right here, in theory. What’s happening in reality is something very different. But let’s hold that thought for a moment.

Two – Search isn’t Solved

"We’re not at where we’d like to be," Weitz began, and then dove in to explain that people are generally happy with how their search engine is working, until the data shows that they are not” – Stefan Weitz, Microsoft Web Search Team, Arstechnica.com

Nobody is arguing that the 10 blue links is the pinnacle of search, especially Google. So it’s hard to disagree here. We judge relative to what we know, but we’re on the brink of blowing that away.

So far, Microsoft is saying all the right things.

Three – Microsoft to Spend $100 Million in Advertising New Search Engine

“Industry executives expect JWT, part of WPP, to unveil an estimated $80 million to $100 million push for the new search engine in June, with online, TV, print and radio executions.” – Adage.com

What? This was the email that drove me over the edge. $100 Million? On Kumo..or Kiev or what ever they call this? This is wrong on so many levels, I scarcely know where to start.

I’m not going to pass judgment on a search interface I haven’t got my hands on. I don’t think it’s fair to make a call on a few leaked screenshots. But I will say that I’ve seen nothing revolutionary about this. And that’s the point. As I’ve said over and over and over, Google is a habit. You don’t break a habit with $100 Million in advertising. You don’t break it with promises of search usage kickbacks. And you certainly don’t break it with a marginal and incremental change in the search experience. Microsoft is right to introduce categorized search. They’re right to explore changing the search interface. No arguments there. But this is not the time to draw $100 million in attention to it. Best case scenario: no improvement to market share. Worst case, the biggest drop yet, if the usability aspects haven’t been fully thought out.

If you accept the message in the first two emails, Microsoft needs to be a search start up: bold, nimble, visionary, passionate and rebellious. And there’s no way in hell that will happen on the Redmond campus. Bold, nimble, visionary, passionate rebels are nowhere to be seen.

The First Step is admitting the Problem

So accept what you are, and more importantly, accept what you’re not. Tweak your search product to improve experience, catch up and try to stem the market share bleeding. There’s nothing wrong with that. And stop with the rebranding. Every time you do that, you’re breaking the established habits of your own users and giving them the chance to go elsewhere. It will blow up in your face.

At the same time, stop worrying about winning the 10 blue link search war and start planning for the next battle. That’s when the Google Habit will be broken and where you have a chance to change the game. Here are the things you need to start thinking about:

- Stop worrying about relevance and start worrying about usefulness.

- Understand that search patterns represent a complex system and look at ways to discover emergent behavior from that system. Use your findings to improve everyone’s search experience (this is an element in Stephen Wolfram’s Alpha project)

- Use every signal at your disposal to interpret user intent in an implicit way. Embrace personalization, behavioral patterns, the social graph, task context and anything else that helps uncover what’s in a person’s mind.

- Reinvent the interface. Embrace how humans follow information scent. Use more intuitive interface tools to allow us to choose, filter and drill into promising paths. And make it workable in much less real estate.

- Make a better search experience personal and portable, seamlessly transferring from the desktop to the mobile device.

- Hold Google’s feet to the fire. Follow your own advice and innovate faster and better than they do. Because you’re right, it’s difficult for them to innovate and risk alienating their user base. But here’s the flipside to that. It’s easier for them to take that risk when there’s no strong alternative to go to.

Before You Say No, Just Listen…

If Microsoft really wants to spend $100 million on Search, here’s my suggested plan. Take $20 million and fund 10 start-ups for $2 million each. Give them a 1 year mandate to reinvent search. Take the remaining $80 million and use it to develop it into a Reality TV series. Call it Google Killer. Get Steve Ballmer to host. He can throw chairs, do the Monkey Dance and lead the audience in a chant of Developers, Developers, Developers. I guarantee you’ll get a better return on your investment.

And if someone at Microsoft is listening, I’m free to discuss the development deal for the series. Hell, I’ll even be one of the contestants. Call me anytime.

Originally published in Mediapost’s Search Insider April 9, 2009

To Google’s Competitors: Please, this Year, Do Something Amazing!

Gord Hotchkiss — Thu, 08 Jan 2009 18:10:08 +0000

A month ago yesterday, I was on stage in Park City, Utah at the Search Insider Summit with Danny Sullivan, Jeff Pruitt (SEMPO President/iCrossing) and John Tawadros (iProspect) talking about Google’s domination of the search space. Both Danny and I took Microsoft and Yahoo! to task for not mounting a more significant challenge to Google’s dominance. It could be my imagination, but it seemed that for the rest of the Summit, I felt a bit of a chill in the air between myself and the Yahoo! and Microsoft reps that ventured to Park City. I suspect the feeling was that as the emcee and moderator, I should have been less opinionated and more neutral. Fair enough, I guess, considering the root of the word moderator. But, with my first column of the New Year, I felt I should clear the air a little bit.

I Like You, I Really Like You…

Really, Microsoft and Yahoo!, I don’t hate you. You frustrate the hell out of me, but I certainly don’t hate you. I root for you constantly. I’ve always been an “underdog” kind of guy. Anything I mentioned on stage in Park City I’ve said directly to your respective development teams in Sunnyvale (Yahoo!) and Redmond (Microsoft). I’ll tell anyone that listens. Ad nauseum, so I’ve been told. In a recent post, Danny Sullivan called it tough love (http://searchengineland.com/tough-love-for-microsoft-search-15968). Danny and I have talked about this and we both really, really want you to succeed. But as much as I’ve tried to give helpful advice, the right people don’t seem to be listening.

Here’s the thing. I love search. I love its potential. I love the way it makes me more functional and sound smarter and better informed. Yet I know we’ve barely scratched the surface. There is so much more to come, but we need to get there as fast as possible. The only way to do that is to have a more competitive market. Google needs to have someone constantly breathing down their neck. The current market domination isn’t good for anyone, especially not the user. I suspect the engineers (not the bean counters) at Google even feel the same way. We need an arms race in Search. Right now, it’s like the US taking on Canada and Iceland (as a Canadian, I can say that). So when I say pull up your socks and take search seriously, I mean it with love.

Bottom Up is the Way to Go

In Danny’s post, he nicely outlines the symptoms of malaise at Microsoft. And lord knows everyone and their dog has been piling on the bash – Yahoo! bandwagon in the last few months, so I won’t go there. The problem, as I see it, is that there’s a gap a mile wide between the top and bottom in both organizations. The result is a dysfunctional culture. The front lines at both organizations desperately want to do something significant in search, but they’re hamstrung by a lack of clear strategic focus from the top. Microsoft is locked in a product development mindset that squeezes anything amazing out before it can even make it to beta. Yahoo! is trying to walk an impossible tight rope, tweaking the user experience while at the same time squeezing as much money as possible out of the search page.

To do something amazing in search, both organizations have to start at the foundation, the user, and rebuild from the ground up. What I would like to see is an approach taken by Intel and Apple in the past, leapfrog development. Let one team working on tweaking the existing product, and lock another team away somewhere to reinvent the future. Throw the rule book away and start over. Take your brightest rebels, remove them from the distractions of mind numbing bureaucracy and panicked financial analyst reports and let them do what they long to do, beat Google. Let them do something amazing.

Let People Be Amazing, then Keep Your Hands Off

But please, if someone at Microsoft or Yahoo! is listening, don’t make the same mistake GM did with Saturn. The launch of Saturn in 1983 redefined how a North American car company could be. Many of the legacy issues that plagued GM (confrontational union relationships, overly complacent dealer networks, quality control issues) were left behind with Saturn, creating an exceptional degree of loyalty and pride of ownership. In fact, Saturn became so successful that GM just couldn’t keep their hands off it, gradually bringing it more and more into the GM corporate fold and, in the process, squeezing much of the life out of the brand.

Amazing things wither and die in an atmosphere of corporate bureaucracy, visionless management and political infighting. Search is too important and too vibrant to leave it to this fate. Let 2009 be the year to do something remarkable.

Originally published in Mediapost’s Search Insider January 8, 2009

Wedding Night Advice for Microsoft and Yahoo

Gord Hotchkiss — Thu, 07 Feb 2008 18:41:35 +0000

Now that there seems to be some sort of union in Yahoo’s future, blessed or otherwise, I felt the urge to pass along some advice to whoever the happy couple might be. For, in all this talk about the impending nuptials , the clear objective is to survive and compete in the business of attracting the attention of prospects online.

I offer this advice on behalf of users, because frankly, I think that’s the only perspective you should be interested in. I’ll explain why.

Why Search is Essential

First of all, there’s a lot of talk about how a Microsoft – Yahoo deal would give you the biggest chunk of the online ad network space, and this is true. But I hasten to add: don’t forget search. Google has stumbled in rolling out another significant revenue channel that holds up against their search business, yet they’ve still dominated. That’s because the importance of search has been understated up to this point. Here’s why search matters.

Search is the thin edge of a wedge that is marking a fundamental change in advertising. And it’s fundamental because it’s initiated by the prospect. The importance of that sometimes gets missed by marketers, who start looking at search as just another weapon in their arsenal.

Search is important because of expressed intent. That puts it in a whole different league than all other advertising, online or off. Behavioral targeting is effective, but it’s still intrusive and interruptive. We ask for search results. That’s a different level of engagement, a different balance of control and a different mindset on the part of the prospect. It’s the first place that balance shifted from the marketer to the customer, but it won’t be the last. Search is forging the way, but customers will demand that level of control and relevance to intent in more commercial communication from corporations. So, for all the talk about ad serving networks, it’s vital that the new duo gets search right. All the truly effective revenue channels will lead from search and the new principle of prospect initiation, including the vast untapped mobile and local markets. You can’t afford to screw it up.

Users come first, Advertisers will follow

Secondly, all you should be focused on is one thing, and that’s meeting the expressed need of the user. Don’t talk to me about balanced ecosystems or serving the needs of both users and advertisers. While as an advertiser I appreciate the consideration, as a user I call it hogwash.

Search cannot serve two masters. One has to prevail. And it should always, always, always be the user. Users are the prospective customers, and without them, the equation doesn’t work. Get users and the advertisers will follow. And those advertisers will play by the rules laid out by the users because they have no choice. Google gets it (probably due to the philosophical bent of Google and an inherent suspicion of advertising) and you’ll have to get it too to compete. So those ads better be highly relevant and in the user’s interest if they appear. If they’re not, don’t show them.

If you pay attention to nothing else, please pay attention to this one point. It’s vital to your success.

Church and State: Antiquated Concept?

The final piece of advice is not to be so set on holding on the divide between Church and State on the search results page. This is one hold over from the offline world that may be due for rethinking

The concept of the Church/State divide came from the fact that advertisers will always push their advantage. That’s one reason why you can’t have a balanced ecosystem. Advertisers have always had a much louder voice that gets heard more often. So in traditional channels, the only answer was to divide up the page (or other real estate). Advertisers had free reign over some sections, but they had to keep their hands off others. Consequently, we’ve learned to largely ignore the real estate given over to advertisers. The success of this Church/State division has been questionable in the past, but it’s a relic of journalistic thinking that somehow became entrenched in the world of search.

But if you pay scrupulous attention to my first two pieces of advice, you don’t have to worry about Church/State. The fact is that in search we have expressed our desire for relevant information, and if that information is commercial in nature, and it matches our intent, than we’re open to it. At Enquiro, we’ve looked at interactions with search advertising in minute detail, and while people will self report an aversion to advertising in general, in the midst of a task, relevance trumps all. If an ad is the closest match, it will succeed.

This opens the door to mash up editorial functionality with commercial messaging in a richer way. As search becomes better at determining intent and delivering richer results, the opportunity exists to seamlessly integrate commercial messaging with other information in a user-centric way. But user trust is paramount. Let the user set the rules of what’s acceptable.

So, whatever happens, this is the advice I would give. There’ll be a lot on your mind in trying to navigate the new union, so I’ve kept it simple. You can thank me later.

Originally published in Mediapost’s Search Insider, February 7, 2008

On Your Search Menu Tonight

Gord Hotchkiss — Fri, 05 Oct 2007 18:18:03 +0000

This week Yahoo unveiled a new feature. It doesn’t really change the search game that much in terms of competitive functionality. If anything, it’s another case of Yahoo catching up with the competition. But it may have dramatic implications from a user’s point of view. To illustrate that point further I’d like to share a couple of stories with you.

May We Suggest…

The feature is called Search Assist. You type your query in and Yahoo provides a list under the query box with a number of possible ways you could complete the query. This follows in the footsteps of Google’s search suggestions in their toolbar. Currently, Google doesn’t offer this functionality within the standard Google query box, at least in North America. Ask also offers this feature. Because Yahoo is late to the game, they had the opportunity to up the functionality a little bit. For example, the suggestions that come from Yahoo can include the word you’re typing anywhere in the suggested query phrase. Google uses straight stemming, so the word you’re typing is always at the beginning of the suggested phrases. Yahoo also seems to be pulling from a larger inventory of suggested phrases. The few test queries I did brought back substantially more suggestions than did Google.

It’s not so much the functionality of this feature that intrigues me. Its how it could impact the way we search. I personally have found that I come to rely on this feature in the Google toolbar more and more. Rather than structuring a complete query in my mind, I type the first few letters of the root word in and see what Google offers me. It leads me to select query phrases that I probably never would have thought of myself. Sometime ago I wrote that contrary to popular belief, we’ve actually become quite adept at paring our queries down to the essential words. It’s not that we don’t know how to launch an advanced query; it’s that most times, we don’t need to. This becomes even truer with search suggestions. All we have to do is think of one word, and the search engine will serve us a menu of potential queries. It reduces the effort required from the searcher, but let me tell you a story about how this might impact a company’s reputation online.

I Wouldn’t Recommend That Choice

Some time ago I got a voicemail from an equity firm. The woman who left a message was brash, a little abrasive and left a rather cryptic message, insisting that I had to phone her right back. Now, being in the search game, getting calls from venture capitalists and investment bankers is nothing really new. But I’d never quite heard this tone from one of these prospecting calls before. So, I did as I usually do in these cases and decided to do a little more research on the search engines to determine whether I was actually going to return this call or not. I did my quick 30 second reputation check.

Normally, I would just type in the name of the firm and see what came up in the top 10 results. Usually, if there’s strong negative content out there it’s worth paying attention to and it tends to collect enough search equity to break the top 10. This time, I didn’t even have to get as far as the results page. The minute I started typing the company name into my Google toolbar, the suggestions Google was providing me told the entire story: "company" scam, "company" fraud and "company" lawsuits. Of the top eight suggestions, over half of them were negative in nature. Not great odds for success. Needless to say, I never returned a call.

If these search suggestions are going to significantly alter our search patterns, we should be aware of what’s coming up in those suggestions for our branded terms. Type your company name into Yahoo or Google’s toolbar and see what variations are being served to you. Some of them may not be that appetizing.

Would You Prefer Szechuan?

My belief is that users are increasingly going to use this to structure their queries. It moves search one step closer to be coming a true discovery engine. One of the overwhelming characteristics of search user behavior is that we’re basically lazy. We want to expand a minimal amount of effort but in return, we expect a significant degree of relevancy. Search suggestions allow us to enter a minimum of keystrokes and the search engine obliges us with a full menu of options. This brings me to my other story. Earlier this year we did some eye tracking research on how Chinese citizens interact with the search engines Baidu and Google China. After we released the preliminary results of the study, I had a chance to talk to a Google engineer who worked on their search engine. In China, Google does provide real-time search suggestions right from the query box. They found that it’s significantly more work to type a query in Mandarin than it is in most Western languages. Using a keyboard for input in China is, at best, a compromise. So Google found that because of the amount of work required to enter a query, the average query length was quite short in China, giving a substantially reduced degree of relevancy. In fact, many Chinese users would type in the bare minimum required and then would scroll to the bottom of the page, where Google showed other suggested queries. Then, the user would just click on one of these links. Hardly the efficient searching behavior the Google was shooting for. After introducing real-time search suggestions for the query box, Google found the average length of query increased dramatically and supposedly, so did the level of user satisfaction.

Search query suggestions are just one additional way we’ll see our search behavior change significantly over the next year or two. Little changes, like a list of suggested queries or the inclusion of more types of content in our results pages will have some profound impacts. And when search is the ubiquitous online activity it is, it doesn’t take a very big rock to create some significant and far reaching ripples.

Originally published in Mediapost’s Search Insider, October 4, 2007

Planning for Personalization

Gord Hotchkiss — Thu, 07 Jun 2007 21:04:54 +0000

I should have known as soon as I saw the speaker roster. Matt Cutts, Tim Mayer, Danny Sullivan, Michael Gray and myself on the same panel. Guess who got the lion's share of attention in the Q&A and after session scrum? Michael and I might as well have checked out early and hit the Google Dance before the crowds.The title of the panel at the inaugural SMX in Seattle was Search Personalization: Fear or Fear Not. As Danny often does, he set the panel up to generate a little debate: Michael Gray vs Google, Yahoo vs Google. I was like Switzerland, in neutral territory. Danny did get his conflict, with Michael taking a few shots at Google and Tim Mayer throwing down the gauntlet about the lack of transparency on Google's personalized search results.

Guess What? SEO's are not your Average Search User!

To be honest, I was a little taken aback that the audience didn't jump all over how personalization was going to change SEO. Most of the questions from the crowd centered on how you opt out of personalized search and why personalization wasn't good for them. I have some issues with that, which of course I'll share in this column:

- First, this crowd was trying to argue from a user's point of view. Okay, they're SEO's (this was the organic track) and most of them have been using search since Lycos was a little baby spider. Just how typical do you think these users are?

- Secondly, I question their motives. Do they hate personalization as a user, or as an organic optimizer? My guess is the later, but it just doesn't seem to be very noble to joust with Google because they're making your job harder. Far better to cry foul as a user than as a PO'd organic optimizer. Like somebody said to me after, do you really think Marissa Mayer is losing sleep because the Google user experience for SEO's isn't all they want it to be?

- This was a perfect opportunity to start planning for the new world of SEO, post personalization. There's a ton of value we can add, as smart, pro-active practitioners, but I didn't see anyone take the opportunity to delve into this. Perhaps the really smart ones were keeping their mouths shut, content to let their competitors bitch about the inevitable while they plotted their take over.

- I found everyone fixated on the current threshold of personalization on the page, taking comfort in the fact that it's only impacting a small number of searches. I reminded them that this threshold is a totally arbitrary one set by Google, and could (and will) change at any time.

- Everyone taking a siloed view of personalization, looking at the organic results in isolation. It's almost like they're assessing the amount of damage control required. I'm not sure they realize the import of personalization. This is a rule changer, a paradigm shifter. This is the new generation of search functionality. It changes the game dramatically. Whatever happens on the organic side will roll over to the sponsored side. It will drive universal search. It will drive everything.

- Finally, this is not just happening on Google. Microsoft's recent comments made it very clear they're thinking long and hard about personalization. Tim Mayer cautioned me not to make the mistaken assumption that just because Google was first out with personalization, they're the only ones working on it. In fact, Matt was quite delighted when he found an article in the Times Online where Yahoo VP Tapan Bhat confessed at the Next Web conference in Amsterdam that Personalization was the future of the Web, including search. You can define personalization in a number of different ways, but however you do it, it dramatically changes our online experience.

So, I leave you with this. I went into the SMX session with four fundamental changes I see emerging from personalization that SEO's and SEM's have to think about, right now. No one asked me for the slide deck after the session. There was not one question about strategies for leveraging personalization. Everyone was more interested in grilling Matt on why the opt-out link disappeared from the results page. Although I'm tempted to join the smart and silent search marketers, I think I'll make one last attempt to share this with the SEM/SEO community. Perhaps in a white paper, perhaps a future column. But I'm only going to do it if you're serious about pushing the envelope into this new opportunity. Drop me an email (gord@enquiro.com) and let me know. Otherwise, I'll just shut up and nod my head while you bitch about the fact that it's too hard to opt out of personalized search. You'll excuse me if I don't answer; you see, my mind is on something else.