While Microsoft is busy trying to catch Google in the USA, Google is building a potentially huge business in China. I'm reminded of the swashbuckler spoofs where the champion uses one hand to fight and the other to sample from the fruit bowl.
Friday, August 07, 2009
Microsoft just inked a deal with Yahoo. To "buy" control from Yahoo, Microsoft will give Yahoo about 90% of all search revenues for the next 10 years. Microsoft has spent billions of dollars re-engineering its search engine a dozen times. By all accounts, the latest iteration is about as good as Google search. The trouble for Microsoft is that search is sticky; consumers will not switch unless they have a strong incentive.
Baidu, with the huge advantage of Chinese government support, holds a dominate 75.7% share in China. Google has fought hard to achieve a 19.8% share. All others combined hold 4.5%.
The hype in the USA about Microsoft's Bing search engine tends to focus on the US market only. When one looks at the global market, one realizes that a three-way battle is heating up. The worldwide search share numbers are: Google 68.9%, Baidu 6.9%, Yahoo 6.5% and Microsoft 2.3%. Combining Yahoo and Microsoft into one gives us Microhoo at 8.8% but Baidu only recently took second place from Yahoo, so its growth rate is clearly faster. Furthermore, Google is about to take a significant leap forward in China. Two of the major Chinese cell phone providers have announced Android based phones. The use of Android software does not assure the use of Google search but, again, while Microsoft is battling so hard in one place, Google is surging forward in another.
The most wonderful feature of Android phones is that they do not force the owners into proprietary services. Last week, Apple suddenly decided to ban the Google Voice app. While Google will do a web page workaround, this action by Apple (surely backed by AT&T) confirms my opposition to buying an iPhone.
Billions of dollars have been spent by Americans on text messaging. What a shame? The cost of text messages to the phone companies is incredibly close to zero and getting closer to zero daily. Indeed, the cost is probable negative in the sense that text messages use up much less bandwidth than the phone calls they replace. Google and other are giving consumers the ability to send free instant messages via the web rather than $5 per month and more text messages. It is easy to see why consumers around the world are increasingly opting for Android based phones. See Here.
The service that will explode over the next several years is text to voice and voice to text translation. Have you ever wished you could remember the details of a phone call? Perhaps a customers order was not exactly clear upon reflection. Perhaps you even forgot the customers full name! Was it Jim's nephew or uncle that should be added to the prayer list? Google is not running around talking about recording your phone calls for you. The reason is obvious. People are already paranoid about Google knowing "too much". There are multiple fears exerting influence here. One of them is the good old basic fear of change, kainotophobia. About 5 centuries before the birth of Christ, Nehemiah battled a strong case of kainotophobia. Link.
We fear the new but when we realize the benefits overwhelm the risks, we move forward. One of the Google Voice features that will grow in popularity until it becomes the new norm, is the recording and transcribing of phone calls. In the future, you will routinely search your phone records as easily as you search the web today.
Yes, Google is growing in China, but, more importantly, Google continues to offer new, free services to you, your friends and your neighbors. Google is in business to make money, but while it invites customers to come for a visit and to stay awhile, Microsoft is busy trying to bully or buy its way into more relationships. Microsoft now owns a small piece of Facebook and a small piece of Yahoo. Microsoft is not going away, but the most dramatic growth will continue to be achieved by Google.
Posted by Jack Miller at 8/07/2009 09:40:00 AM