The Google Monopoly

• Google is the world’s biggest internet player
• They have monopolies with numerous products and services and are growing in other areas
• This article outlines different areas of monopolization and growth by Google

Google this, Google that. It seems everywhere you go on the web, Google is already there.

What was once just an innovative search engine has now become the master of the internet. Further, Google has proven that offering services for free can be very profitable. This business model has created a new business and internet environment where the consumers and businesses prosper without a negative correlation.

This article will examine different areas of the internet in which Google has either dominated or will begin to dominate. I call this the Google Monopoly.

Search Engine

Before Google, Yahoo, Altivista and AskJeeves dominated the internet search engine market. But in 1998, that changed as Google launched its Google search engine. Google’s popularity grew exponentially for many years.

As of January, 2011, 90.1% of  worldwide online searches use Google. Google’s next biggest rival for January has been Bing with 4.31%, followed by Yahoo at 3.96%. Microsoft launched Bing in attempts to cut into Google share of online searches, however, this has not been the case. Instead, Bing has basically just been cutting into Yahoo’s searches to the point that Bing overtook Yahoo as Google greatest ‘rival’. That being said, there is a 84.79% difference between Google and its greatest competitor.  Further, Google’s share of online searches has hovered around the 90% (+1 or -1) mark for the past three years, despite this competition from Bing. That’s what I would call a monopoly. FYI: AskJeeves (now called Ask.com) now contains only 0.36% of share of searches.

Source: StatCounter Global Stats – Search Engine Market Share

Email

Not too long ago, it seemed like every teen had Hotmail or MSN, every young adult had Yahoo, and the rest used an ISP supplied email account. Today, the email environment does have it’s differences and similarities. WindowsLive (formerly MSN and hotmail) has remained the top email provider in the world, and YahooMail still dominates the US. In addition, Gmail is becoming a larger player. ISP provided emails are still popular, but web host based emails are also becoming very popular.

According to Experian Hitwise, YahooMail is the fourth most visited site in the United States with 3.41% of all visits. This is compared to 1.03% for Windows Live Mail and 1.00% for Gmail. It is important to keep in mind, Yahoo and Windows Live have been around for over a decade where Gmail has been around for less than 7 years. Further, in the United States, Gmail has recently edged out AOL as the third largest web based email provider in terms of accounts. The table below illustrates how Gmail compares to YahooMail and WindowsLive in the US and the world.

Source for world stats: Nov 2010, comScore
Source for US stats: Aug 2009, comScore

Based on these stats, it becomes apparent that Gmail is destined to take over as the leader in web based email since they have been continually gaining on YahooMail and WindowsLive despite having been around for half the time or less (7 years compared to 14 and 15 respectively). This trend will be accelerated by the fact that Gmail provides users with added functionality such as Google Calendar and Google Docs. Yahoo and Windows also have Calendar functionalities, but not to the same extent and comprehensiveness as Gmail. Further, Google has its own line of online office suite software that is comparable to MS Office or Open Office. With these documents, you can share them among other Gmail users so that you can all edit the document simultaneously. This is changing the way students and small businesses do business. WindowsLive has a similar feature called SkyDrive, but once again these apps do not have the seamless real time capabilities of Gmail.

As these features become more popular and evident, Gmail’s popularity will continue to grow and eventually become the leader although a complete monopoly is unlikely.

Directions and Mapping

Poor MapQuest. Before GoogleMaps, MapQuest was the site to go to for directions. Unfortunately for them, they failed to keep up with web technologies and Google capitalized on this. As a result, according to Experian Hitwise, Google Maps is the top visited travel related website with 14.78% of all visits. The next closest rival is poor old MapQuest at 5.75%. These statistics include all travel related websites includes Expedia and Trip Advisor, thus this dominance by Google is even more impressive.

The use of GoogleEarth secures Google’s dominance for mapping and directions as it provides even more functionality.

GoogleMaps and Earth provide an abundance of unique features that MapQuest simply cannot compete with and as a result, Google has a virtual monopoly here.

Internet Browser

Microsoft ended Netscape’s streak of leading the internet browser market by having Internet Explorer pre-installed on its Operating Systems. Due to this advantage, IE’s control of the market increased dramatically at Netscape’s expense despite IE offering an inferior product. This luck began to change with the introduction of Mozilla Firefox. Its popularity quickly increased until recently leveling off at around 31%. Opera also cut into IE’s market but it never really took off like Firefox. What prevented Opera from Firefox like growth was Google Chrome. Chrome was launched in 2008 and its popularity, like all of Google’s products, sky rocketed. This rise in Chrome popularity likely is the reason for Firefox levelling off, and more importantly, IE’s demise. Google entered the very competitive market, and yet was able to increase its market share dramatically in just a few years. By the 4th quarter of 2008, Chrome had just 1.07% market share. Now, Chrome has 15.82% market share. In the same time, IE’s market share has gone from 67.99% to below majority at 45.9%. When comparing these numbers, you can see that IE’s decline nearly imitates Chrome’s rise. This trend is even more interesting when comparing IE’s market share from Q1, 2010 to Q1, 2011. IE went from 54.67% to 45.9% whereas Chrome went from 6.79%  to 15.82%. Thus, you can clearly see the roughly 9% loss in IE went directly to Chrome. This trend will likely continue, especially due to Firefox’s recent crash rates.

It would be of no surprise that within 5 years, Chrome will overtake IE as the browser of choice. It is even possible that when Google releases it’s own desktop operating system, and it will, that Chrome will be pre-installed similar to how Internet Explorer is with Windows. This will quite possibly put the nails in the coffin for IE.

As a side note, it is important to note that Chrome does have some serious issues with over caching  which results in website changes taking longer to be recognized. The reason why Chrome does this is to make web browsing quicker.

Source: StatCounter Global Stats – Browser Market Share

Online Advertising

For all of you people who have been banned from Google AdSense, I know it can be difficult to find another contextual pay per click ad network. There are many alternatives, just not any good ones. AdBrite and Clicksor have proven to be inferior to Google AdSense to most (although some people swear by them), Yahoo Publishing Network has been discontinued, and MSN Advertising is now only by invite.

In the past year, GoogleAdSense went from being on 16.5% of all websites on the web to being on 17% in February 2011. The next closest rival was Double Click at 1.5%. Oh wait…Google owns them. Nevermind. The next biggest rival is Commission Junkie at 0.9%, followed by Infolinks at 0.8% and then AdBrite at 0.5%.

To further prove Google’s dominance, Google’s market share for advertising networks is 80.9% compared to 7.0% for Double Click and 4.2% for Commission Junkie. Thus, Google’s greatest ‘rival’ is owned by Google and even that company isn’t even worth considering as competition.

Source: W3Techs

Yup, it is safe to say Google AdSense most definitely has a monopoly on online advertising. Therefore, if you do get banned from GoogleAd Sense, your alternatives for CPC advertising are incredibly limited. Inline advertising offered by Adbrite and now more so Infolinks may be one alternative, but now affiliate programs are becoming a more viable alternative. Although these are difficult to convert into earnings, when they do convert, the payouts are far greater. Linkshare is a great resource to get access to many affiliate programs and Amazon is of course always a good choice.

It is safe to say, Google wins this one.

Cell Phone Operating Systems

SymbianOS has long been the most common operating system for phones and it continues to be. However, the percent of mobile phones sales with SymbianOS has dropped recently, particularly due to rise of iOS (Apple) and BlackberryOS (RIM) and increasingly Android. The operating system with the greatest growth rate however has been Android despite  gains from iOS. These gains by Android are due to the fact that large mobile manufacturers such as Samsung, Motorola, Sony, and even Nokia (the creators of Symbian) have moved towards Android OS.

According to a new report by comScore,  28.7% of smartphone subscribers use Android, compared to 31.6% for RIM and 25% for Apple.  This has been the third consecutive month that Android has gained 2% and RIM has lost 2%. This is an alarming trend signifying that Android may very well become the dominant smartphone OS. Thus, Google might go from 0% market share to the market leader in just a few years, just like many of its other products. Scary.

Although Blackberry, Apple, and Nokia have greater market shares of mobile OS, the inevitable trend of moving towards smartphones (60% gain from Q1, 2010 to Q1, 2011 in the US) will make it even more likely that Android will even replace Symbian as the mobile OS leader, and not just the smartphone OS leader.

What’s next?

The examples above don’t even do Google’s dominance justice. They also own YouTube, have other desktop software such as Desktop and Picassa, Google Images, along with its increasingly popular online translation services (that exceed the quality of other free online translation services), blogging tools, social networks, and a slew of other awesome web services.

Based on the review above, Google already has a monopoly on search engines, will eventually become the leader in web based email, already has a virtual monopoly for online mapping and directions, will soon become the leader in internet browsing, has an effective monopoly of web advertising possibilities, and will soon become the leader in smartphone operating systems.

What seems to be our only hope for internet competition is Facebook. Facebook is still limited in the scope of their products and services, but this is likely to increase and perhaps may signal a new internet giant that could rival Google. This rivalry could lead to some very cool innovation and might save us from being reliant on Google. I won’t go into too much detail about Facebook’s potential though as that is another article entirely.

Do more than just read and just use Google: whatever that may be.

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Posted by Alex Dorward on Tuesday, February 8th, 2011. Filed under Real World, _Index. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry