9/19/2007

Powerset to Take on Google

There is a new search engine company that is discussed here that is planning to take on Google. They claim that they have a competitive advantage in user interaction for search because it is more user friendly. Their angle is to allow users to type actual sentences about what they are looking for instead of using keywords and boolean operators (like you do now in Google).

I am all for competition in the market, and hope Powerset does well, however, I do not think that they will be able to beat out Google in the search engine market. Google is too big, too powerful, has too many resources, and is too far entrenched in the market to be truly be booted out of the market (as Powerset is claiming they will do).

What is keeping Google from offering the same feature of allowing you to type "How old is Steve Jobs?" instead of "steve jobs age" in the Google search term entry field? With their vast resources, it is entirely possible that if Google felt threatened by this ability that their competitors have, they will offer it themselves.

In order for Powerset or any other potential competitor in this market to overthrow Google, they must have a tremendous branding strategy, marketing campaign, and broad range of phenomenal free services like Google currently does. Otherwise, there will not be a noticeable shift in the market toward Powerset and away from Google because there is not enough marginal benefit for the substitute.

9 comments:

Dr. Tufte said...

I wouldn't be so sanguine about Google's future.

Once upon a time, Google was the newcomer that nobody used, and AltaVista was the search engine that would never be displaced.

The argument you are making is very common, so you shouldn't feel bad about it. Having said that, a point you should get out of managerial economics is that the success of Google is the signal that turns potential competitors into actual ones. In some sense, the "publicness" of Google's success will be their undoing. Maybe not by Powerset, but by someone.

Sophie said...

There is no argument that Google is an extremely powerful company, but to basically say that no one will ever give it any form of competition is an overstatement. Companies and business in general are based on life cycles. Google has put in the time to get through the beginning stages of the development and growth life cycles, but as the company starts to mature, it opens up the door for new comers to enter the market. Whether or not Powerset is going to be the company to truly give Google a challenge, only time will tell, but there are companies out there that either today, or in the near future, will give Google a run for its money.

Logan said...

If I sounded like "no company will ever overtake Google" then I apologize, for I do not feel that way at all. My point is that Google is SO far entrenched and has SO many resources that it will take a company with serious resources and a solid differentiation campaign and a clear competitive advantage that cannot be copied (or easily copied) by Google or any other competitors.

An example would be Microsoft's live.com. Microsoft clearly has deep pockets, and tried to present a more user-friendly, classier looking search engine tool. But it did not have the impact on the market that they were hping for. Google still offered too many other services and was too deeply entrenched to make enough users want to switch.

AltaVista was mentioned as a predecessor to Google, but I would argue that Google is much more innovative and progressive. I propose that Google is very interested in the future of technology, and want to always be on the cutting edge. In fact, they often introduce new technology, or better ways to do them.

Offering these services for no cost or at a limited cost may be the downfall of the company long-term, but as long as they can stay ahead of the competition, Google will maintain a strong position in the market. I don't feel that Powerset is prepared to deal with these issues.

Dr. Tufte said...

-1 on Logan for a spelling error.

For the most part, I agree. I would not say that it will necessarily take a company with a lot of resources.

As for Alta Vista, in the mid-90s it was the one that was most innovative, most progressive, and backed by the deepest pockets.

Hayden said...

Although Google may have more resources, market power, and a competitive edge over the new search engine company, Google is not invincible. I am surprised that Powerset is so bold in claiming that they can compete with Google, but it may also be a strategy.

If Powerset is able to get the attention of the public by making such a bold statement, Powerset may be able to get the public to look at their search engine and try it. Also, Google may ignore the comments and think that they are too powerful and innovative for an unknown company. If Google wants to continue to be the best, it better not overlook other unknown companies. Powerset is probably not going to overtake Google, but it is not impossible.

Dr. Tufte said...

I think Hayden has a point: bravado can be a successful marketing policy in some situations (and this probably is one).

William said...

Dr. Tufte,
I agree with you in the fact that at one time Google was a no-name company and has been able to rise to the top. This too could be the fate of Powerset however, I think there are some disadvantages for Powerset: 1. the market seems to be a lot more saturated then it was when Google first started 2. There is a lot more competition. For instance AsJeeves.com offers the service of asking full sentences. 3. They will need a lot more advertising, marketing, and differentiated strategy which is not impossible, but harder to come by.

I also agree with you Dr. Tufte that Google's potential fall is if they are unable to be innovative and continue to find ways to compete. Google must continue to improve on their product and not rejoice in their current victory in the market. If they do not continually improve, then there is the chance that a new competitor will come in and dominate the market.

Reagan said...

Dr. Tufte-Extra Credit

I also agree that a powerhouse like Google could eventually be displaced by another company. We don't know what technology will come up in a few years and it could completely change game. Something that Google has started is moving into different markets. Occasionally you see a company lose focus of who they are and alienate their customers. Google could possible end up with goal diffusion and compromise their position in the market. Google entered the credit card processing industry over a year ago, they are working on several other financial products, and they are trying to take over your desktop with their customizable Google homepage. Entering these other markets may take them away from what they do best and give another company an opportunity to make a splash in the search engine market. Several good things that Google is doing related to online searching is "Pay Per Call" similar to pay-per-click except the advertiser is not charged unless they receive a call from the person searching. Google newspaper ads was recently started, and the very impressive Google analytics used for web traffic conversion. I don't think we can say Google is not working on new innovative ways to stay on top. However, in my opinion it will take a change in technology that Google overlooks and some very deep pockets to make a run to overtake Google at the top of the search engine market.

Dr. Tufte said...

-1 on William for a couple of spelling errors.

Not much to say on this, except that 6 months down the road no one is talking about Powerset.