Rising Clout of Google Prompts Rush by Internet Rivals to Adapt
Google, a clever online search service with a silly name, has already transformed the way people use the Internet. Now it's shaking up the strategies of companies all over the Web business, from Microsoft Corp. to Yahoo Inc.
To its rivals, Google is gaining a strategic position that could give it too much influence over Internet commerce. Its dominance of online searches means it can reach Web users from the moment they start browsing, and steer them to anyone with a product to sell or advertise. Of roughly four billion Internet searches conducted in May, 32% were conducted directly through Google, compared with 25% for Yahoo and 19% from AOL Time Warner Inc., according to comScore Networks, an Internet market-research firm.
Google long ago realized something that is only dawning on many other companies: Searching isn't a Web sideline -- it's the Web's strategic heart. While Amazon and other sites try to position themselves as the central place for online shopping, thousands of shoppers are simply Googling for sandals or curtains and whatever else they want.
This week Yahoo fired a loud shot back at Google by agreeing to buy Overture Services Inc., a company that pioneered the concept of letting advertisers bid for higher placement in the pages of Web-search results. Google has developed a similar service, though it is better known for search results that aren't influenced by advertising.
Yahoo agreed to pay $1.63 billion in cash and stock for Overture, months after buying another search-technology specialist, Inktomi, for $235 million. The moves will let Yahoo reduce its dependence on Google, currently the primary search engine for Yahoo searches.
Microsoft is also waking up to the power of Google and racing to protect its turf. The Yahoo deal has ripples for Microsoft, since the software giant has been a big Overture customer. Yahoo says it will continue serving other Overture customers, and Microsoft says the deal won't immediately change its relationship with Overture.
But early this year Microsoft's MSN online group launched a project to develop its own search engine, with the goal of using search to increase MSN subscribers and advertisers. That could be a big threat to Google, given Microsoft's history of patiently eyeing new markets, then using its grip on PC software to dominate them.
"Each of these guys is trying to own a bigger and bigger part of the start positions for e-commerce, that's the battle," says Venky Harinarayan, a venture capitalist who once sold a shopping search-engine company to Amazon. "Anyone who gets between you and the consumer can control the start point."
What worries other companies is that Google has wedged itself into that "start" position and could prove very hard to dislodge. Google ranks the Web sites users see after searches, based on how many other Web sites provide links to the sites. It's a novel concept that delivers fast and relevant results, though Google has to be vigilant against attempts to game its system.
Google increasingly collects fees for delivering short text ads -- with links to the advertisers' Web sites -- that appear when users search for certain words or terms. Google won't let advertisers affect how it lists search results, though it does give some ads choice real estate above the results list.
The system has proved a good way for many online businesses to draw customers to their sites. It also has become a big business. Google, which doesn't disclose its finances, is expected to have almost $1 billion in revenue this year and is profitable, according to people familiar with the matter. There's been much speculation about an initial public offering by Google, but it says it hasn't any immediate plans for one.
Some industry executives think its technological lead is precarious, vulnerable to moves into its turf by the likes of Microsoft and Yahoo. Dominant market positions in technology tend to endure only if customers face a high cost of switching products, as with Microsoft's operating systems and Intel Corp.'s microprocessor chips. But Web users, while they do tend to stay with favorites, can switch about as easily as changing channels on television.
Google declined to comment on its growing clout or what its rivals are up to. People at the company have privately acknowledged the competition from other Internet companies, including Microsoft, Yahoo and eBay.
Some rivals, particularly Yahoo, can blame themselves for helping Google take off. Three years ago, Yahoo picked Google's search engine to provide search results on Yahoo's network of Web sites, replacing a service by Inktomi.
Yahoo had started by providing Internet searchers with information from its own directory, functioning like a giant Yellow Pages to the Internet organized largely by human editors. If this couldn't provide the information, Yahoo would use Google's search technology. Increasingly, though, users went directly to Google's Web site for results.
It was a classic case of underestimating a high-tech jewel and giving it away, similar to when International Business Machines Corp. gave the business of supplying PC operating systems to a little-known company called Microsoft. Although IBM thought it was just subcontracting a part of the PC, Microsoft's Bill Gates saw that operating systems would someday control the lion's share of profits and strategic influence in PCs.
Executives at Yahoo gradually realized they were losing their leadership in Internet search. The Google threat to other Yahoo businesses didn't sink in until last year, when Google unveiled a Web site that automatically collected summaries and headlines of top news stories from the Web and displayed them.
Google News shook Yahoo. On the day it appeared, Yahoo Chief Operating Officer Dan Rosensweig grilled employees about what it meant for Yahoo, says someone familiar with the matter. Worried Yahoo executives began calling industry contacts to see if they thought Google News signified a threat, say two people who received calls.
In contrast to the editorial team of up to 16 who supported Yahoo News, Google had built its news site with three people. It was one employee's personal project, built over a weekend on a whim, according to the company. After a test version wowed employees, the brass set up a team to develop it for the public.
Last fall, Yahoo restructured the deal with Google to let Yahoo have partnerships with other companies. And in a step many believe will lead to the end of its ties to Google, Yahoo bought Inktomi.
Acquiring Overture could give Yahoo another lift. Overture's paid listing service is highly profitable. Overture has been on a buying spree of its own, snapping up search pioneer AltaVista and the Web search unit of Norway-based Fast Search and Transfer.
Though he declined to comment directly about the company's competition with Google, Yahoo Chief Executive Terry Semel said, "Simply put, search is an important aspect of what we do."
As for Microsoft, it for years largely ignored Google and the search business, offloading the search function on its growing MSN online service to Overture, Inktomi and LookSmart. But in a broad study of Internet usage by the MSN group over the past year, Microsoft discovered that search was just behind e-mail and instant messaging as the most-performed task on the Internet.
Google was also becoming a central point connecting Internet users with online merchants and services, a role that Microsoft wanted MSN to fill. Microsoft saw that Google and others were proving that search could draw huge amounts of traffic to a Web site, which in turn could attract advertisers, says Lisa Gurry, group product manager at the MSN unit. At a February meeting of the MSN group last in Arizona, managers hashed out "every range of option" for building a "complete search" service for MSN, said Yusuf Mehdi, a Microsoft vice president, in an interview earlier this year.
Soon after, Microsoft decided to kick off its own search-engine development, getting final budget approval for the project in June. Around then, MSN launched an Internet "crawler" that collects Web-site addresses that will be used with Microsoft's future search engine. Ms. Gurry calls the search-engine development a long-term project and won't say when the service will begin.
Mr. Mehdi downplayed any looming head-to-head competition with Google. He said Microsoft saw a strong search engine as one of a key set of features essential for MSN's long-term growth. One possible use of search: to drive growth of subscription services. As Ms. Gurry explains, a search on "Madonna," for instance, could direct the Internet user to a Microsoft online music service.
But search is also shaping up to be a central piece of Microsoft's next version of Windows, code-named Longhorn. Slated to be available on PCs from 2005, Longhorn is expected to enable PC users to search for information across all of their PC applications, such as Word and Outlook, as well as the Internet. A search engine built into Longhorn could pose a strong challenge to Google. Microsoft won't comment on plans for Longhorn.
AOL Time Warner's America Online has also helped Google become big. After two years of using Overture's paid search results, AOL switched to Google's service for its U.S. customers 14 months ago. AOL says the relationship has paid off in greater customer satisfaction with search results and a one-third rise in search traffic.
Certainly, AOL has treated Google well. Google is the only outside brand name AOL displays on its Welcome Screen, And unlike Microsoft, AOL hasn't moved to develop its own search technology.
With Yahoo and Overture linking up, AOL may be more dependent on its relationship with Google. In a "multi-polar" world with a Yahoo camp, a Microsoft camp and a Google camp, says AOL spokesman John Buckley, "For America Online to be aligned in the Google camp is a very good place to be."
But analyst Youssef Squali at First Albany Corp. sees Google's growing importance as a potential threat to AOL. The reason: As search revenues become a core part of AOL's business, AOL won't be able to afford to have those revenues controlled by a third party. At some point, he says, "AOL will have to make a move."
According to someone familiar with the matter, America Online chief Jonathan Miller has mused about buying Google but hasn't seriously considered it because AOL couldn't afford it. At the same time, AOL is loath to antagonize Google by working with a competitor, given that revenue from Google is about the only bright spot in America Online's ad picture.
Meanwhile, Google is starting to move onto the turf of online shopping companies such as Amazon and eBay Inc. Google has already begun testing a more formal online shopping site. Late last year, it created a Web site called Froogle, which lets users search for books, apparel and virtually any other product for sale online. Google's software automatically identifies Web pages that offer merchandise for sale, and Froogle searches the pages when users enter the items they want to find.
The ex-CEO of PayPal, an electronic payment service that was acquired by eBay, says Google and eBay are now competing for many of the same customers. "They're not totally head-on competing, but there are a lot of areas where there is overlap," says the executive, Peter Thiel, now managing member of investment firm Clarium Capital. He says competition from Google is "probably the main thing that's kept a constraint on eBay raising prices." An eBay spokesman says Google hasn't affected the company's ability to raise prices, which it has done several times in the past.
Amazon, too, could see trouble from Google. Best known for selling books and other items, Amazon is becoming a virtual marketplace for goods sold by other merchants -- from used CDs listed by individuals to jeans from Gap Inc. Analysts believe this is one of the most profitable areas of Amazon's business. Google, as a central starting place for shopping, could cut into Amazon's traffic.
Like eBay, Amazon has chosen to work with Google. Amazon recently began letting users do Google searches directly through the Amazon site. If looking for something Amazon doesn't sell, such as concert tickets, people can click on links provided by Google to other merchants. So "at this point we see Google as a very valuable partner," an Amazon spokeswoman says.
But Amazon may be hedging its bets. It has hired a number of specialists in developing sophisticated calculations, or algorithms, used in search software. Among them is Udi Manber , a former Yahoo executive and professor from the University of Arizona, who joined Amazon last year as "chief algorithms officer."
Google风光无限，对手穷于应付
Google，这个听上去傻乎乎，但实际上聪明无比的网络搜索服务供应商早已改变了人们使用互联网的方式。如今，从微软公司(Microsoft Corp.)到雅虎公司(Yahoo Inc.)，网络世界的各家企业的商业战略都被Google震撼了。
与竞争对手相比，Google已取得了一种战略优势，能对电子商务施加非凡的影响力。Google在网络搜索领域具备的主导地位意味著，从网站用户开始上网浏览那一刻起，它就能发现并把他们引向某种产品或广告。从事互联网市场调查的公司comScore Networks称，在5月份约40亿次的网络搜索活动中，有32%是直接通过Google进行的，而通过雅虎和美国在线时代华纳(AOL Time Warner Inc.)的比率分别为25%和19%。
Google在很早以前就意识到搜索功能不是互联网领域的副产品，而是网络的战略核心，但许多其他公司现在才慢慢明白这一点。当亚马逊(Amazon)等网站试图成为网上购物霸主时，成千上万的购物者们只是通过Google来寻找凉鞋、窗帘等想要的物品。
上周，雅虎同意收购Overtune Service Inc.，给了Google一个有力的反击。Overtune Service曾率先提出让广告客户进行投标竞价，以决定他们在网络搜索结果清单上的前后次序。Google也推出了类似的服务，但它以搜索结果不受广告影响而著称。 雅虎将以价值16.3亿美元的现金和股票收购Overtune。就在几个月前，该公司刚以2.35亿美元收购了网络搜索领域的另一个行家─Inktomi。上述举动将使雅虎减轻对Google的依赖，后者目前是雅虎主要的搜索引擎。
微软公司也逐渐认识到Google的威力，于是赶忙保护自己的势力范围。雅虎的并购交易震动了微软这个软件业的巨擘，因为它一直是Overtune的大客户。雅虎表示将继续为Overtune从前的客户服务。而微软也表示，雅虎的交易不会立即改变它与Overtune的关系。
但在今年早些时候，微软旗下的MSN网络集团推出了一项旨在开发自己的搜索引擎的计划，希望利用搜索引擎来增加MSN的用户和广告客户。鉴于微软一向善于静静地观察新市场，然后利用自身对个人电脑软件领域的控制来垄断这些市场，MSN的举动可能会对Google构成较大威胁。
"这些家伙都想在电子商务领域占有更大的先机，这是一场战争，"维奇?哈里那瑞安(Venky Harinarayan)说。他是风险资本家，曾向亚马逊出售了一家提供网上购物搜索引擎的公司。他说："任何介于企业与客户之间的媒介均可获得这个先机。"
令其他公司感到担忧的是，Google已取得了先机，而且很难被赶下台。Google根据某个网站有多少网站链接来排列该网站在搜索结果中的次序。这是个新颖的创意，能提供迅速而相关的搜索结果，虽然Google得警惕有人试图做手脚。
Google允许客户刊登插入网站链接的文本广告，并藉此收取越来越多的费用。这样一来，当用户在Google上输入某些词汇时，广告客户的网站就会出现在搜索结果中。Google不会让广告客户影响搜索结果的排列顺序，尽管它让一些客户排在搜索结果的前列。
对于许多通过网络做生意的公司来说，上述机制不失为吸引顾客浏览其网站的好办法。这种机制也成了大买卖。虽然Google没有透露它的财务状况，但知情人士预计该公司今年的收入将接近10亿美元，利润颇丰。有不少传闻称Google将进行首次公开募股，但该公司表示尚未打算立即上市。
一些企业主管认为，Google的技术优势岌岌可危，很容易受微软和雅虎等大公司的侵袭。除非客户在转用其他产品时面临高昂的费用，如不采用微软的操作系统和英特尔(Intel Corp.)的晶片，否则技术上的领先地位难以持久。但对于网站用户而言，虽然他们通常不会喜新厌旧，但他们能像转换电视频道那样轻松地"移情别恋"。
Google拒绝对自己逐步上升的影响力或对手的状况发表评论。而该公司的内部人士私下里表示，他们感受到了来自微软、雅虎和eBay等其他网络公司的竞争压力。 一些竞争对手，特别是雅虎，只能责怪自己当初为Google的腾飞助了一臂之力。三年前，雅虎终止了与Inktomi的合作，转而让Google的搜索引擎为自己的各类网站提供搜索结果。
雅虎起初从自己的目录上为互联网用户提供信息，它的目录就像一本巨大的网上黄页，主要由人力编辑。如果在目录上找不到有关信息，雅虎就采用Google的搜索技术。但渐渐地，人们直接转向Google进行搜索。
这是一个错将宝石当普通石头抛在一边的经典事例，类似于当初国际商用机器公司(International Business Machines Corp., IBM, 简称IBM)将提供PC操作系统的业务给予一个名叫微软的无名小公司。虽然IBM认为自己只是把PC的部份业务转包了出去，但微软的比尔?盖茨(Bill Gates)却预见到了有朝一日，电脑操作系统将是主要的利润来源，并对PC具有战略性的影响。
雅虎公司的管理人士已逐步意识到，他们丧失了网络搜索领域的主导地位。Google对该公司其他业务的威胁到去年终于显现出来。当时，Google推出了一个网站，能自动从网上收集并公布重大新闻的标题和摘要。
这个名为Google News的网站震撼了雅虎。据熟悉内情的人士称，在该网站推出的当天，雅虎的首席运营长丹?罗森斯威格(Dan Rosensweig)详细询问属下此举对公司的影响。忧心忡忡的主管们还致电业内人士，询问他们Google News是否构成了挑战。
与支持Yahoo News的多达16人的编辑队伍相比，Google的新闻网站只有三名成员。据Google称，创建新闻网站起先只是一名员工的个人计划，是他在某个周末的突发奇想。但它的试行版本轰动了整个公司，于是老板组建了一支队伍，推出面向公众的网站。
去年秋天，雅虎重新修订与Google的协议，新协议将允许雅虎与其他公司建立合作关系。雅虎还收购了Inktomi，许多人都认为此举最终将导致它结束与Google的合作。
收购Overtune也会助雅虎一臂之力。Overtune的收费上榜服务利润很高。该公司自己也一直收购不怠，吞并了网络搜索领域的先锋AltaVista，以及挪威公司Fast Search and Transfer的网络搜索子公司。
雅虎首席执行长特利?塞米尔(Terry Semel)拒绝对该公司与Google的竞争发表评论，但他表示："简而言之，网络搜索是我们重要的经营内容。"
至于微软，该公司多年来一直忽视Google和网络搜索业务，并把MSN的搜索功能交给Overtune，Inktomi和LookSmart。但根据一项针对MSN集团在过去三年的网络使用状况的广泛调查，微软发现，网络搜索是仅次于电子邮件和即时讯息的使用最频繁的网络工具。
Google还成了连接互联网用户和网络商家和服务的枢纽－－而微软一直希望MSN能担当此任。微软看到，Google等公司的经历证明，网络搜索能为网站带来惊人的访问量，进而吸引广告客户，利萨?加利(Lisa Gurry)说。她是MSN的集团产品经理。在今年早些时候接受采访时，微软的副总裁尤瑟夫?梅丁(Yusuf Mehdi)说，MSN集团于今年2月份在亚利桑那州召开了一次会议。经理们在会上堆砌了建立"一项详尽的网络搜索"服务的种种方案。
不久之后，微软就决定开发自己的搜索引擎，其财务预算方案最终于6月份获得批准。就在那时，MSN推出了一个互联网"爬虫"，能收集网站的地址，并将用于公司今后开发的搜索引擎上。加利称，搜索引擎的开发是项长期计划。他没有透露这项服务将于何时推出。
梅丁对与Google潜在的正面竞争保持低调。他表示，微软认为功能强大的搜索引擎是MSN长期发展所必备的主要特性之一。搜索引擎的一个潜在用途是：推动收费服务的增长。梅丁解释说，搜索"麦当娜(Madonna)"一词就能直接把用户引入微软的网上音乐服务。
网络搜索正逐步成为微软下一代的Windows操作系统的核心内容之一。新版操作系统名为Longhorn，定于2005年开始用于PC上，预计它将使PC用户能通过所有的电脑软件来搜索信息，如Word和Outlook等，当然也包括互联网。Longhorn内置的搜索引擎将对Google构成强有力的挑战。微软不愿对Longhorn的计划发表评论。
美国在线时代华纳旗下的互联网子公司美国在线也曾帮助Google发展壮大。14个月前，美国在线终止采用Overtune的付费搜索服务，转而让Google为国内客户提供服务。美国在线表示这样做是对的，因为客户对搜索结果的满意度上升了，搜索量也提高了三分之一。
显然，美国在线待Google不薄。Google是该公司在欢迎荧幕上展示的唯一一个其他公司品牌。与微软不同，美国在线并未打算开发自己的搜索引擎技术。
随著雅虎与Overtune的合并，美国在线对Google的依赖程度也许更高。该公司的发言人约翰?巴克利(John Buckley)说，在一个存在雅虎阵营、微软阵营和Google阵营的"多极"世界里，美国在线站在Google阵营一边是很合适的。
但First Albany Corp的分析师尤塞夫?斯考利(Youssef Squali)认为，Google的日益壮大对美国在线是个潜在威胁。原因是：由于搜索服务带来的收入已成为美国在线收入的核心部份，该公司不能让这些收入来源被第三方控制。斯考利表示，在一定的时候，美国在线必须采取行动。
据熟悉内情的人士称，美国在线的CEO乔纳森?米勒(Jonathan Miller)曾想收购Google，但没有认真研究过，因为公司承担不起。此外，由于Google是美国在线广告领域的唯一亮点，后者也不愿意与竞争对手结盟而与Google反目。
与此同时，Google已开始涉足亚马逊和eBay等网上购物公司的领地。Google早已开始对一个更加成熟的购物网站进行测试。去年晚些时候，它建立了一个名为Froogle的网站，能让用户搜寻书籍、服装和其他几乎所有能在网上出售的商品。Google的软件能自动识别拍卖商品的网页，而当用户输入想要找的商品时，Froogle就开始搜寻这些网页。
PayPal是一家提供电子支付服务的公司，已被eBay收购。该公司的前CEO彼得?蒂尔(Peter Thiel)称，Google与eBay当前正在争夺许多相同的客户。他说："他们不完全是正面竞争，但有许多重迭领域。"他认为，来自Google的竞争"也许是限制eBay涨价的主要原因"。eBay的发言人则表示，Google并没有影响公司的提价能力，公司过去已几次提价。
亚马逊也看到了来自Google的威胁。亚马逊以出售书籍等商品闻名，但实际上已成为出售第三方产品的市场－－从个人的二手CD到Gap的牛仔裤，无所不包。分析师认为，这是亚马逊利润最高的业务领域之一。而作为网上购物的中心起点，Google能削减Amazon的访问量。
与美国在线一样，亚马逊选择了与Google合作。亚马逊最近开始让用户直接通过其网站使用Google进行搜索。如果要寻找亚马逊上不出售的东西，如音乐会的入场券等，人们可以点击由Google提供的其他网站的链接。亚马逊的发言人表示："目前，我们认为Google是一个非常有价值的合作伙伴。"
但亚马逊可能留了后路，两面下注。该公司聘请了一些专家来开发用于搜索引擎软件的复杂的运算系统。尤迪?曼比(Udi Manber)就是其中之一，他曾担任亚利桑那大学(University of Arizona)的教授，以及雅虎的高级主管。曼比于去年加入雅虎，担任首席运算长一职。
