The Financial Times published an article today exploring the chances of Microsoft pulling a "Netscape" on Google. I spoke with author Scott Morrison earlier this week about the issue and thought it might be worthwhile to expand on the reasons why I believe Microsoft has a legitimate shot at unseating Google.

We all know that Google is currently the public and media darling of the search world, going so far as to become a verb meaning "to search." Google has earned that position by creating results that surpass most other major engines in terms of quality and relevance. Early adopters of the engine quickly turned into brand evangelists and the media soon joined the Google love train. Google currently captures the majority of online search activity, but Yahoo! and even Microsoft aren't far behind.

Microsoft unveiled the beta version of their new proprietary search algorithm this summer, and critics were unimpressed. A small index combined with clustering problems led to search results that were almost useless. There's no reason to believe that the beta version of the engine in any way resembles the final product that Microsoft will release later this year, but it does call into question whether or not Microsoft can truly go head to head with Google in terms of quality. Most likely, they can't.

Many have tried to outwit, outplay and outlast Google's impressive team of engineers and a few have come close. AlltheWeb delivered an impressive set of results and the potential to compete before it was gobbled up by Overture and then Yahoo! and relegated to the sidelines. Teoma is still recognized within the industry as delivering strong results, but the marketing and brand recognition simply aren't there to carry it over the top. Yahoo!'s new algorithmic search engine is a worthwhile entry to the field, but even it has yet to seriously challenge Google.

That leaves Microsoft and their upcoming entry into the game. While most within the industry, myself included, don't expect Microsoft to mount a true challenge to the quality of Google's search results any time soon, the reality is that they may not have to.

Microsoft isn't launching a new search engine from scratch. They already own the third most popular search destination on the Internet, which means they have a target audience and brand recognition already built in. Much like Yahoo!'s switch from Google results to their own proprietary results, the change to a new MSN powered search isn't likely to get much notice from the everyday Internet users that search there. After all, how many MSN users are aware that the results they get currently are a modified version of the results at Yahoo!?

When Microsoft released Internet Explorer to compete with Netscape in the 90's, they didn't release a superior product and capture the browser crown by winning people over. They stormed the market with power and dollars that Netscape couldn't dream of competing with. Sure, that led them into federal court on charges that they were a monopoly, but once the competition has been decimated, what's a court battle really accomplish?

So how can Microsoft pull the same kind of victory off against Google? Easy...they play the money game. Google is not yet a company with diversified income, the majority of their earnings comes from advertising. A large portion of that advertising revenue is generated via the small, independent content sites that syndicate their AdSense content. This program provides increased ad inventory for Google's advertisers and increased profit for Google's bottom line. The primary complaint about AdSense has been the lack of information from Google on how it divvies up profits and the sometimes frighteningly small revenue share that it produces for sites running AdSense.

Microsoft is sure to have recognized this problem and it wouldn't be unheard of for them to launch their own PPC syndication program somewhere down the line. With pockets deeper than Google can even imagine, Microsoft could offer a revenue share that is two, three, even four times higher than that of Google, thus prompting thousands of Web site owners to ditch AdSense in favor of a Microsoft based advertising partnership. The loss of profits that would be associated with a mass exodus of AdSense partners could have a strong impact on Google.

The future certainly hasn't been etched in stone, and I for one am cheering for Google as they prepare for battle, but the reality of the past still looms heavy in my mind. I remember the days when I swore by Netscape and loathed Internet Explorer, yet here I sit, browsing the Web with IE 6 and my trusty Google toolbar. Netscape has long been relegated to a secondary testing environment on my machine. Is it really so far fetched to believe that in another year or two, a Microsoft toolbar will replace the Google one in my browser? Only time will tell.
July 29, 2004

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

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