An analysis of the search engine marketplace

Overview
How have the events of 2012 affected Google’s dominance of the search engine market, and what does the future look like?
Author
Andrew Isidoro
Date

Update 19/08/2013:

We’ve now updated these statistics and made them available as an infographic; you can check it out here: 

The Changing Face of Global Search Engine Traffic: Infographic

The search engine marketplace

2012 was a very busy year for Google with game-changing algorithm updates, growing unrest about them appearing to contradict their “Do No Evil” ethos and pressure from the marketing activity of some of the other search engines, most notably Bing.

With this ongoing disruption, the question is: have these changes and issues caused a shift in the battle for market share within search?

Let’s take a closer look.

The Algorithm

Search engines have been around for decades and are now more advanced than ever. They are still learning and adapting, however, and every year Google makes more than 500 changes to its algorithm to maintain market dominance. While most of these changes are pretty minor, there were several major updates in 2012 that drastically affected the user’s experience.

Venice

“Venice” was the local update which appeared to integrate local search data for local queries giving the user a much more tailored search result depending on their location.

Google now officially says that 40% of mobile queries are related to location, though Microsoft has previously stated this to be nearer 53%. If these figures are to be believed it makes sense to return local search queries that are much more relevant to those on mobile devices. After all, if I search for “Pizza…” I’m probably looking to order some food rather than wanting to see a pizza Wikipedia page. 

Penguin

Known to many as the “over-optimisation penalty”, Penguin was rolled out to help combat webspam in the search results by adjusting link-based spam factors. The Penguin update was easily the biggest of 2012 in a step towards “rewarding high-quality sites”. In an interview Matt Cutts, head of Google’s Webspam team, explained that Penguin was designed to tackle “the stuff in the middle” between fantastic, high quality content and spam. Panda was all about spam, but the need for Penguin arose from this middle ground.

Google Panda and Penguin updates

Search + Your World  

While Penguin was the biggest update of the year, the most radical shift in Google’s search engine in 2012 was towards social personalisation, in the form of Search + Your World.

With their new social platform Google+, Google aggressively pushed social data and user profiles into the search results in an attempt to drive sign-ups. They also added a new, prominent toggle button to shut off personalisation, though there have been rumblings on Twitter that this feature may be on its way out.

Though the most radical in terms of search engine behaviour, it hasn’t exactly been a popular move with users due to the loss of relevance in the search results as Google+ became more dominant. A recent survey by Pewinternet.org found that 65% of people asked considered a search engine collecting information about them to rank future search results as a bad thing.

Knowledge Graph

One change that was met with interest by many was a major step toward semantic search, seen in the introduction of an integrated “Knowledge Graph” in the search results displaying over 3.5 billion facts about 500 million people, places and things.

The Knowledge Graph attempts to provide users with a data-rich search result to help them answer questions and gather facts quickly, though the real strength is the Knowledge Graph idea itself, with Danny Sullivan noting that “if Google can better tag actual web pages to entities, then it can better understand what those pages are about and related to, which might increase the relevancy of its regular results”.

Google’s Business Practices

Don’t be evil” is often quoted as the informal corporate slogan of Google, and they even claim to have made it a central part of their identity and core values, going as far as to include a similar “You can make money without doing evil” statement within their 10-point corporate philosophy.

While User Experience was clearly a consideration in their algorithm changes, it appears the search giant completely forgot about its “Don’t be evil” values. From lawsuits to full blown marketing nightmares, 2012 saw a number of blips in the Google philosophy.

Using research from Barry Adams, below are just a few of the issues Google had to answer for last year:

Illegal AdWords Advertisements

In January, Google was yet again caught selling AdWords space for illegal products. The ads included unofficial London 2012 Olympics ticket resellers, as well as cannabis and fake ID card sellers. This is of course nothing new; Google has already faced a number of expensive legal settlements for earlier offences.

Google AdWords

Unethical Practice

Days after the illegal AdWords fiasco, Google was once again caught red-handed. This time though, things turned a little more sinister – they were found using a Kenyan business’s database to boost its own services.

Though the issue is very complex, the CEO of Mocality (the Kenyan business in question) Stefan Magdalinski sums it up as such:

“Since October (2011), Google’s GBKO (Get Kenyan Businesses Online campaign) appears to have been systematically accessing Mocality’s database and attempting to sell their competing product to our business owners. They have been telling untruths about their relationship with us, and about our business practices, in order to do so. As of January 11th, nearly 30% of our database has apparently been contacted. Furthermore, they now seem to have outsourced this operation from Kenya to India.

Until we uncovered the ‘India by way of Mountain View’ angle, I could have believed that this was a local team that somehow forgot the corporate motto, but not now.”

Invasion of Privacy

In February, the Wall Street Journal wrote an article outlining how Google had been bypassing the built-in privacy settings of millions of people using Safari on iPhones and computers and tracking their browsing habits despite them having requested that kind of monitoring be blocked. When surveyed, 86.4% of respondents were unhappy about Google bypassing browser privacy settings to track web activity.

Google was eventually forced to pay a $22.5m fine to the FTC.

Tax Avoidance

Tax has been a major issue for a number of companies lately with Google no different and, having paid just £6 million in corporation tax on £395 million of UK profit in 2011, it was part of a major media backlash worldwide. Bloomberg later reported that Google has avoided paying over $2bn in taxes by funnelling international revenues to offshore accounts in Bermuda.

When queried about these practices, Google’s chairman Eric Schmidt simply calls it ‘capitalism‘.

Barry Adams, however, sums it up differently (this and all of Google’s 2012 experiences): 

“2012 has been a hallmark year for Google, when the world woke up to the fact that Google is just another profit-chasing corporation. Its products and services are not there purely for the betterment of mankind, but there’s a growing element of commercialisation inherent in Google’s offerings.”

Competitors

It seems that it wasn’t just the media who woke up to Google in 2012, but also their competitors.

Just days after Google announced they would begin tracking users universally across its Gmail, Search, YouTube and other services – sharing data on user activity across all of them in a widely condemned unified privacy policy – Microsoft seized their opportunity.

Google’s biggest threat, Microsoft-owned Bing, launch an anti-Google advertisement and website to help grease the wheels of user discontent. Even smaller search engines such as DuckDuckGo set out their stall to promote their non-invasive product.

Bing, DuckDuckGo

Market Share

With Google having had such a tough year then, what impact have these events had on the search engines in terms of their market share?

Desktop Overall Market Share

When it comes to searches made from laptops and PCs, Google still dominates. According to market data, Google has actually grown over the past 12 months with 83.24% of the market share today, up from 82.68% from January 2012 though down from the January 2011 figure (85.05%).

Bing and Yahoo are both growing steadily. We can see that Bing gained traction early in 2012, possibly due to Google’s invasive inclusion of Search + Your World into the SERPs, given that there is a strong correlation between the rise in Bing and Yahoo’s market share, and a slump in Google’s figures around the time of release and the following few months.

So how has Google managed to grow its desktop-based market share despite hurting its public image? Easy…web browsers.

Chrome, Firefox, Internet Explorer

2012 saw Google Chrome finally dethrone Internet Explorer as king of the browsers. Couple that with the fact that Firefox defaults to Google as its primary search engine and you have yourself a major advantage with non-technical users.

Mobile Overall Market Share

Mobile was a big talking point in 2012, with data suggesting that mobile devices will eventually overtake desktop as our primary method of choice for connecting to the web. Yet it is here that Google has dropped market share. Despite owning the most widespread mobile operating system, Android (with 68.3% of the market), Google fell from 91.47% share in January 2012 to 89.37% in December 2012. This may seem trivial but could be a sign of things to come.

IBM and Asymco have already noticed a correlation, in that Android users do not seem to engage with their browser when using their smartphone. A scary thought for a platform like Android, which depends more on engagement with other Google products than simply monetising its hardware.

Interestingly, Bing more than doubled its market share in the mobile arena from 0.95% in January 2012 up to 2.05% in December, buoyed by the growth of the Windows Phone. It is suggested that by 2016, Microsoft will have an 11% share of the mobile market – a 300%+ increase in just 3 years. Add this to the upcoming release of new Microsoft Surface tablets and the future looks bright for Bing.

Conclusion

2013 will be a very interesting time for search and we’d love to hear your predictions for how you think it will unfold. Do you think Google will continue to dominate or will rival search engines (or even the new Facebook Graph Search) eat away at Google’s market share? Share your thoughts and leave us a comment using the form below.

Comments

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  • 27 Feb 2013 16:07 Box UK Staff

    Thank you Andrew. Brilliant read.

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