Tomorrow Today: Google Universal Search – Part 3: What it means for MS and Yahoo!

Bob Cringely contends that the battle for search is over, with Google emerging the clear winner. With Google Universal Search, Google has put so much distance between itself and numbers two and three, that the incremental return on additional investment into search by either Yahoo! or Microsoft will be negative. Both firms will be better off putting their money in other lines of business.Why has GUS ended the search wars? Apart from standard Web Search, Google’s also ruled vertical search – maps, books, images, and video. (The only exception was news, where Y! did a better job.) So if Y! and MS were to follow suit with their own integrated searches, the top video (or book) results would be on Google’s properties. In fact, the better they made their searches, the more traffic they’d drive to YouTube or! Not only does Google do the best job with vertical search, today it also owns the properties where this vertical content resides!

So where does that leave Microsoft? Simple. Microsoft should get out of search. And out of online advertising altogether.

Surprised? Read on.

Microsoft is a company that, after having led consumer computing for a generation, is now finding itself playing follow-the-leader. Over the last few years, its strategy has been plainly, reactive. Its Live initiative (Windows Live Search, Windows Live Mail, Windows Live Messenger, Office Live) was a poor attempt to match Google’s online portfolio, pitting application service against application service. But it didn’t work out. Today, the Live initiative is an acknowledged damp squib.

Why? Because the New Web is not central to Microsoft’s business model. It never has been. In the mid-to-late nineties, when it “woke up to the Internet”, it reacted. And made Internet Explorer integral to Windows 98, added TCP/IP support and made it easy to connect to the Internet (it also bought Hotmail, launched the MSN portal and tried to play ISP). These didn’t seem to me, either then or now, to be part of a concerted strategy to leverage the opportunity the Internet presented. Cut to today. With Ray Ozzie’s “leaked” memo in 2005, the company once again found itself waking up to the New Web. Once again we find a set of ad hoc tactics that don’t collectively define a web strategy. It seemed crazy that a person with the sagacity and vision of Ozzie would talk drivel like “online advertising is the next big revenue opportunity, and therefore we must move everything – Windows, Office, Mail – online, and make money out of ads”. It is almost as if with each generation, the Web is being retrofitted into Microsoft’s business strategy.

In contrast, Google is a company that has been built from the ground up to leverage the “Internet opportunity”. The firm realised that first public, then private data would find its way to the web. It first created tools so that it would have access to all of this data (either by crawling or by hosting this content). Simultaneously, it created applications that people could use to access the information they needed from this data. And it monetized this access.

Microsoft is a desktop applications company. From 1975 to 2007, repeat, it has been a desktop applications company. Further, though it may have had a profound effect on consumer computing, its revenue has come from enterprise customers. Finally, its largest selling products are not its search service, or its MSN portal, or Hotmail, or Messenger. Its largest selling products are its Windows Operating System and Office Application Suite. The mandarins at Microsoft have to consider these facts before running around like confused chicken.

The Enterprise does not “get” the Internet. It gets the network, or, more precisely, the intranet, but it does not get the Internet. There’s just too much data that needs to be kept within the walls of the organization. Two paragraphs ago, I said that Google’s essence is to have access to data, either by crawling or hosting. No large firm is willing, either now or in the forseeable future, to let that happen. This Enterprise market has been growing for two decades now, will continue growing. This is where Microsoft faces virtually no competition from the likes of Google.

How can Microsoft enter a new phase as an enterprise software company? How can it create better applications using the Network? That’s another Tomorrow Today in itself, coming up soon after this series is done.

And Yahoo! ? The Google of the late nineties is foundering. Brad Garlinghouse’s “Peanut Butter” memo seems to have done little more than cause a rearrangement on the company’s board, but I don’t see a strategy shift in the least.

Yahoo should also get out of the search and Pay-per-click advertising space.

What is Yahoo! as a company? As Terry Semel himself stated several months ago, Yahoo! is primarily a media company that is technology-heavy. An online media company, to be precise. Now think of the online advertising world in terms of the Long Tail. Yahoo’s customers were in the “head” of the Long Tail graph – a few thousand advertisers, but each one worth big bucks. Google instead targets the “long tail” with its AdWords model. In fact, AdWords is not effective for large advertisers, but then it was never intended to be.

Yahoo! needs to realise that there is much more to the online marketing world than simply advertising, especially when compared to the sophisticated offline marketing campaigns that professional marketing and PR firms run. Yahoo! would do well to induct that kind of talent onto its rolls. I’m thinking an acquisition of a respected marketing/advertising agency. Being able to use more media like video, audio, images and maps willl increase the richness of future campaigns, With regard to video, having traffic driven to Google’s properties (YouTube) won’t seem so bad once the videos on that website have been created by Yahoo! (PR videos, video ads, videos with embedded ads, the works!)

Online PR, viral and buzz marketing, social network marketing and affiliate marketing are areas that are currently a fishmarket of small fragmented firms, none of whom have the scale or the expertise to cater to truly large clients. They’d be cannon fodder should Yahoo! choose to muscle into these spaces.

Finally, mobile is one area where I believe Yahoo! already has a lead over Google. Its widget-oriented OneSearch service proves that the mandarins at Yahoo! have the right idea. The company recognises that the mobile web is different. Although more intent-based than the PC Web, mobile web is subscription-driven instead of search-driven. OneSearch is a large step down that road. Mobile online communities could be a massive revenue-earner. Google has Orkut and Dodgeball in its armory but isn’t doing a thing with them. Will Yahoo! grab this opportunity instead?

In summary, both Yahoo! and Microsoft have forgotten their company DNA in their zeal to show Wall Street that they’re wise to every Google trick. They don’t have to be. In fact, as we’ve seen in this rather detailed Tomorrow Today, they’re three very different companies operating in three different spaces, playing to their different strengths. The sooner Redmond and Sunnyvale realise this, the sooner they’ll be able to drag these companies out of the morass they’re sliding into.

Tomorrow we’ll wind up by examining what GUS means for Google itself, and where the company could go from here.

Tomorrow Today: Google Universal Search – Part 2: What it means for the SEO industry

It means everything. It means a massive opportunity and a massive threat. It means a period of flux in the SEO space for the next six months. Why?

Until today, everything – everything – in the SEO industry was to do with optimising web pages. Firms in this space have fine-tuned the art of Optimization into a science over a decade. Pagerank was all that mattered, and SEO firms knew what worked and what didn’t.

But it was all page optimization. Meaning, web pages with textual content. Because the default, vanilla Web Search dwarfed other vertical searches – image, news, map, book, video search, they didn’t even register on an SEO firm’s radar. After all, if no one’s searching for my client on Google Book Search, why do I even bother optimizing his/her website for it? What’s changed is that results from those same niche searches have found their way onto the hottest property on the web today – Google’s web search results page.

To optimize for GUS means optimizing for a whole host of data types. It also means several paradigm shifts in thinking. Fundamentally, “news” is not a different data type – it’s also text on a web page. But one, the way in which its relevance is measured is definitely different. For instance, recency is probably much more important here. Two, it’s tough to simply “generate” news, when compared to how quickly a business can “generate” content on static or dynamic web pages that are *owned* by the client. Maps is another example. Providing location-based data is something that has never been done before with text, at least not in the spatial sense. Video presents similar challenges. How does Google rank videos based on relevance? And what kind of video content can you create for your client? Maps deserves an entire post to itself, but I’ll leave it to your imagination for the present. The indsutry will enter a phase where SEO firms will have to work much more closely with their clients to optimize for them than they do today.

Paid Search Engine Optimization (which is currently almost entirely Adwords/Overture campaign) is set to change dramatically. Marissa Mayer, VP Search Products and User Experience at Google, commented during the launch of GUS, “For us, ads are answers as well…. And so I was hoping that we could bring some of these same advances in terms of the richness of media to ads.” Consider location-based ads. Today, searchers in different countries see different sponsored ads based on their location. Maps can take that to an entirely different level. Consider a search for “sports shoes”. Apart from other results, you could, on the right pane, have a map of your region showing you stores with sell sports shoes. Which stores are shown will depend upon a bid-based mechanism similar to Adwords. Video ads are more or less a given. Travel advertisers, for instance, could optimize videos displaying cruise line offerings or hotel amenities, while financial firms might focus on promoting educational videos rather than straight text articles. How GUS will embed these ads in the company’s traditional unobtrusive manner remains to be seen.

In summary, SEO firms will spend the next few months taking stock of how much their business has changed with GUS. Those that do find a compelling strategy for GUS will be able to put miles between them and their competitors. Think about it – with GUS, the battle for Search is all but over. Having defined Search 2.0, Google has left other engines in the Search 1.0 era. Those SEO firms that declare that they can now optimize for Search 2.0 will not only be able to scale up, acquire larger customers, but also win over significant accounts from their competitors. In other words, they will have won the SEO wars.

Tomorrow, we’ll see what the mandarins at Microsoft and Yahoo are thinking about GUS, and what they ought to be thinking instead.

Tomorrow Today: Google Universal Search – Part 1: Industry Disruption

About a week ago, Google took the lid off a project that had been brewing for several months. The company calls it Universal Search. In a nutshell, it “will blend listings from its news, video, images, local and book search engines among those it gathers from crawling web pages.”

For ordinary web searchers, the change is hardly noticeable. In fact, a lot of ordinary surfers I’ve spoken to since Google Universal Search (GUS) went live have given me the “Duh” reaction. And therein lies the genius of this innovation. This subtle, almost invisible new search is a disruptive innovation; affecting the entire SEO industry, Microsoft, Yahoo! and Google itself.

This week’s Tomorrow Today is a four-part series where we’ll examine just how GUS has changed the rules of the game for all stakeholders.

Part 1: What people are saying about GUS
Part 2: What it means for SEO
Part 3: What it means for Microsoft and Yahoo
Part 4: What it means for Google and the future.

Part 1: What people are saying about GUS

Google’s had plenty of “vertical”searches in the past – its bread-and-butter web search, image search, blog search, local search, video search, even book, map, news and email search. Google Universal search unifies these previously siloed searches. Now, a search for a term will return a list of results that span all of the above. The most dramatic change as of now seems to be the video search integration. As an example, the results to the search request ”I have a dream” will include an actual video showing Martin Luther King Jr.’s famous 1963 speech along with the usual assortment of Web links (Associated Press). Now you begin to get understand how significant this little change is, and begin to think up of other scenarios. Imagine a search for “apple store”. This could lead to (apart from normal web results), a map of Apple stores throughout the state where you’re located, new results about apple stores, images of the glass Apple Store in Soho, and so on.

The real technical smarts with converting siloed searches into GUS have to do with “finding the best answer across multiple content types“. How do you rank an image search result in comparison to a web search, or a video search result? Previously, comparing a news result for a search term with a maps result for the same term, and ranking them relative to each other was like comparing apples and oranges. No longer.

Danny Sullivan demonstrates how news, maps and book results now form part of the standard search results set. Admittedly, these results did show up on the first page of the Web search results, but they were placed separately, out of the top 10 search results. That, ironically, reduced their relevance. Consequently they were hardly clicked on.

Tomorrow we’ll see what this means for Seach Engine Optimization firms who, for good reason, are quite shaken up by this new development.