Microsoft Increases Competition, For A Change

When Microsoft and the word ‘competition’ come up in the same sentence, somebody usually has to call a regulatory agency. Not this time. With the official announcement that Microsoft will launch a new search engine later this year, it seems that we can all look to Redmond and give thanks.

Google has been WAY too powerful. They earned their dominance by building a better product and winning customers on the merits. And I’d say they’ve been pretty responsible with their power. Good thing for us they started make a lot of money at it. Because it was this money that has brought Yahoo and now Microsoft into the game, and soon instead of one provider controlling 80% of all internet search, we’ll have three major players each controlling around 30% of search. Let’s hope AOL somehow makes a break and the field spreads even wider.

This is good news for a lot of reasons. The first is that as we saw in November (via the ‘Florida’ update), it isn’t healthy for any company to have 80% of their revenue coming from one place that they don’t control. Now if one of the engines decides to change 10 of their top 10 results, people won’t have to starve or jump off of bridges.

Another is that as it becomes harder and less lucrative to ‘game’ the system, maybe less people will do it. I’m not sure about this one, because the available reward might still justify the means. Today lots of people ‘do what they gotta do’ to get top rankings for high value ‘money words’. I don’t believe in the whole ‘black hat/white hat’ school of SEO whining, so let’s just say some of these people are aggressive. When a top ranking on Google means about 50% less revenue than it did before, the incentive for aggressive behavior goes down. Or considered another way, when you’ve got to do 3X as much work to get the same result, some people will think it’s not worth the effort. Again, I may be way wrong about this one.

Balance on the organic side also brings more competition to the paid side, potentially lowering costs and creating tiers and discernable segments. The rise of vertical search engines and more diverse PPC distribution networks is helping this cause too.

Finally, as always this competition will improve the products. Google and the others have a lot of room to improve and weekly internal reviews of market-share charts will motivate them to get there. Who would have ever thought we’d have Microsoft to thank for something like that.

Have any other ideas about benefits of the emerging market competition? Please leave your thoughts in the comments.

Posted by Craig Danuloff at March 22, 2004 10:35 AM