With new advertising systems launched by both Yahoo! and MSN, the war is afoot now. The counterattack on Google has started. It remains to be seen if these efforts -- which may be too late -- can take away some of that lucrative revenue Google enjoys and drop it into the coffers of Yahoo! and Microsoft. To put this into perspective, this article from BusinessWeek mentions a stat from eMarketer that is quite an eye-lifter about those small Google text ads that show up every time a search is performed: "These tiny text ads, usually no more than a dozen words in length, generated more than $10 billion last year and are expected to top $14 billion in 2006." Whoa. Those little text ads are worth more than many S&P 500 companies.What can Yahoo! -- which has feverishly worked on a similar product to Google's, and was helped tremendously by the Overture acquisition a few years ago -- do to capitalize? It was there with Overture at the same time Google was using search to monetize its business model. But Google's model of bidding and relevancy won the day -- and garnered the lion's share of the market (and the money). The keyword here is relevancy -- apparently customers don't mind Google's text ads since they are so relevant to what they are seeking -- not simply another non-targeted ad that gets blown off.
This model has worked incredibly well for Google , and I think it the main reason people continue to use them over all the rival services. The rule that has won is, "give the people the most relevant results to what they're looking for, make the ads unobtrusive, and provide the information in a non-threatening way". For example, just one look between Google's Gmail service and Yahoo!'s email service (both free services) will show a stark difference in usability -- and these aren't even core search services. Gmail is simple, elegant and very quick to use, where Yahoo! Mail (the free version, again) is not so elegant, stuffed with incredibly annoying advertising, and is slower (at least to me).
Can Google continue to win customers be designing systems and interfaces that work in advertising that's incredibly successful and ensure defections to the competition stay very low? If they do, the sky's the limit.
Can Google continue to win customers be designing systems and interfaces that work in advertising that's incredibly successful and ensure defections to the competition stay very low? If they do, the sky's the limit.
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