Google Inc. (NASDAQ:GOOG) has been around for quite a while; it is the most used web search engine to date. However, Google was once invincible but not anymore as it is gradually losing its monopoly; the process will take some time, but it has started. The market of digital advertising has gone down in the recent times and according to IAB, US digital ad spending increased just 14% in Q2. Although 14% is not bad but what is alarming is the fact that it is the lowest growth rate in 2 years. Search ad shares for digital marketing are declining since 2011 and that is a matter of concern for Google.
Although Google is still by far the most used search engine in the world despite the growing competition, but lately it has seen a slight decline in its search ratio. A small dip in numbers would not have any impact on a company as huge as Google, but the question is how long it will remain that way. There will come a time when Google will start losing big numbers and eventually the numbers will start affecting the company.
Google is generating revenues from its own sites like YouTube, which are way higher than other competitors in the market but when it comes to the search it’s another story. In the recent quarter Google generated 20% growth from its other sites and only 17% from Google search. Google search, which was the fastest and most reliable source for generating revenues, has now fallen into the “others” category. Google’s ad shares are dropping and on the beneficiary end is Google’s rival Facebook. On one hand Google Inc’s digital add shares fell 38% in 2014, on the other hand Facebook’s market shares are expected to increase from 8% to 11%.
The switch from laptop and desktop to mobiles is a main catalyst in the declining popularity of search engines. Although people use search engines on smartphones but the search ads do not work as successfully on mobiles as they do on laptops and desktops. Facebook on the other hand is more cell-phone friendly and its ads are ideal for smartphones.
Other search engines like Bing, Microsoft are also pulling in traffic from Google. Although none of the other search engines have gained as much popularity as Google, but everything combined together has now started to have an impact on Google’s over all monopoly.
Mobile advertising is getting really popular and the concerned companies are aware of this change. Different apps like photo sharing etc and companies like Yahoo are trying to hit the mobile market by offering mobile ads. Although Google Inc. (NASDAQ:GOOGL) will always have a top hand as far as search engine is concerned because the search business rely mainly on revenues and monopoly but advertising business needs more than that. For ads Google sooner or later might have to lose to companies like Facebook that are more mobile friendly. Google has its hands full at the moment; it best hope and pray that Apple doesn’t decide to enter the search engine territory.
