OCTOBER 5, 2006

News Analysis

By Catherine Holahan

A Gaggle of Google Wannabes

Ask.com and other challengers hope to pull share from Google with new search methods, but it won't be easy to unseat the market leader

In the race for Web-search share, Ask.com is the tortoise. The search engine formerly known as Ask Jeeves still handles less than 6% of U.S. searches, though it's been in the industry since 1996, more than a year before front-runner Google. Google controls roughly 51% of searches, including queries conducted on Time Warner's (TWX ) AOL and News Corp.'s (NWS ) MySpace.

But IAC/Interactive's (IACI ) Ask.com and other tortoise-like Web-search rivals are hoping they'll gain advantage in the long run by coming up with new, clever methods of searching for information on the Web, as Google ramps up efforts to expand beyond search. "Google's strategy has shifted from trying to get you to information on the Web to trying to capture more and more of your time," says Doug Leeds, Ask.com vice-president for product management. "We are focused solely on getting people to their information faster."

EXPANDING TERRITORY. During the past year, Google has turned its attention to territories controlled by Yahoo! (YHOO ), Microsoft (MSFT ), eBay (EBAY), and others. It has launched a finance site to compete with one of Yahoo's leading products, an online payment system similar to eBay's PayPal, and spreadsheet software aimed at stealing some of Microsoft's Excel business (see BusinessWeek.com, 7/10/06, "So Much Fanfare, So Few Hits"). It has also been busy bringing the world's libraries online (see BusinessWeek.com, 9/7/06, "Google Seeks Help with Recognition").

Google views the new projects as part of a mission to make all information accessible with a few keystrokes, and says they're closely related to Google's main search franchise. In no way is Google taking its eye off search, says Matt Cutts, a core quality engineer at Google. "We have more engineers working on core search technology than ever before," says Cutts, adding that most employees spend about 75 percent of their time tweaking Google's main search algorithm to make results faster, more relevant, and more comprehensive for users. "There are always changes going on behind the curtains, and changes happen weekly or faster than weekly."

NEW FORMULAS. None of that's deterring Ask and its ilk. Google's algorithm, known as Page-Rank, was developed by co-founders Sergey Brin and Larry Page in the mid-1990s. Unlike other search formulas of the day, which showed results based on the number of times a particular search word showed up on the page, Page-Rank orders links based in part on the number of times other pages link to them.

Ask.com's algorithm, on the other hand, retrieves and ranks results based on the number of times groups identified as related to the topic reference the site. Company executives say the method is superior because it theoretically avoids displaying generally popular sites that are not frequently referenced by other sites on the topic.

Under that scenario, if a blogger who typically writes about Paris Hilton suddenly decides to delve into string theory, the site wouldn't necessarily show up in results—unless other string theory–related sites refer to the celeb site's new-found interest in physics. Ask's algorithm also lets it suggest related queries from within the topic group. So, for example, a search on John Lennon would also bring up related searches about the Beatles and Yoko Ono.

TOPIC COMMUNITIES. Clusty.com, a smaller search engine that has six to seven million searches a month compared with Google's 2.9 billion searches, also uses topic communities to separate it from Google. On Oct. 2, the search engine released a new feature called a "clusty cloud" that retrieves a list of topics related to the query, rather than a series of page links. Clicking on the topics reveals the related links. Clusty CEO Raul Valdes-Perez says that users appreciate not getting the "usual dump of results that you get at Google."

Microsoft's Live Search, launched in September, also employs the idea of topic communities to enhance search, says Justin Osmer, senior product manager at Live Search. MSN is currently the No. 3 search engine, with 12.5% of the market. It hopes some of Live's new features—such as the ability to customize different homepages related to particular queries and then share those pages with users—will win it market share.

"We have intentions for first place, so we are definitely in it for the long haul," says Osmer. "We think we are bringing something that is unique and differentiated that can compete on the basis of search results but then adds this new layer to the search experience."

SOCIAL SEARCH. An oft-discussed new layer to traditional search has been the inclusion of social search sites that help answer queries through user-supplied answers or links. Both Microsoft and Yahoo have entered the social search arena with the inclusion of question-and-answer sites, but Yahoo has been a particularly aggressive player since acquiring bookmarking site del.icio.us 18 months ago (see BusinessWeek.com, 10/2/06, "Yahoo's Strategy: Growth by Acquisition").

Yahoo, the No. 2 search engine, also sees social search as a complement to its core search technology that will eventually help it gain on Google. "Web searching can be frustrating for a lot of people," says Tomi Poutanen, Yahoo's director of product management for social search. "Search does a very good job if you are searching for something factual or doing research. It is not as good when searching for experiential knowledge—such as what is a good sushi restaurant in New York—where a person's experience would count in having that answer."

Eurekster, a nearly three-year-old search engine, sees so much promise in social search that it has based its whole business model on it. The engine allows users to build mini search engines, called swickis, that aggregate information on particular topics from sites they choose. "We completely agree with Yahoo that social search is the next generation of search," says Eurekster CEO Steven Marder. He uses the example of a teenager searching for skin care. On a swicki for teens, the teenager can find information relevant only to his age group. A general search would bring back results on wrinkles.

As hot as social search may be, Eurekster and Yahoo both acknowledge that it isn't enough to replace text search—Google's bread and butter. "Our play is not to have a destination search engine," says Marder.

AN ISSUE OF TRUST. Another major way that search engines have tried to compete with Google is by creating a more visual interface. Rather than just return a series of links, both Ask.com and Snap.com have features that allow users to see an image of the page as they scroll over the link. The capability enables users to better judge the content of their results without clicking on the links and loading individual pages.

Snap co-founder and CEO Tom McGovern says his company is hopeful that its image and text interface will become the future model for search. However, he says it would be a mistake for search engines to think that their new features are enough to oust Google as the market leader. "I do think that if you fast-forward five years, most of the search engines will have embraced the graphical interface," says McGovern. "That doesn't necessarily mean that all of a sudden the market shares will be dramatically different. I don't think that will be the case."

Indeed, neither do analysts. Many say that despite the ease of switching to a new search engine, the new technologies are not different enough to draw users away from Google. "People don't just go to Google because they can get the best search results," says Safa Rashtchy, a managing director at Piper Jaffray (PJC ). "They also go there because they trust it. The technology would have to be massively more useful than the existing one to get people to switch. Theoretically it is possible, but realistically it is unlikely."

GOOGLE STILL GAINING. That may explain why Google keeps gaining share in the face of newly launched capabilities on other engines. In August, Google sites gained 6.8 percentage points of search share from a year earlier, according to researcher comScore Media Metrix. Meantime, Yahoo lost 1 percentage point, Microsoft's sites lost 3.3 percentage points, and Ask.com lost one-half of a percentage point. Meanwhile, Amazon's (AMZN ) A9 search engine scaled back features on its search engine, signaling it could not compete with search titans Google and Yahoo.

And ultimately, Google could easily acquire or replicate any search method that makes significant headway, says Jefferies & Co. (JEF ) analyst Youssef Squali. "If it is really attractive, I fully expect Google to just add the technology or copy it," says Squali. "In terms of text search: Good luck trying to compete with Google."

That's just what they told the tortoise.