Google has held and continues to hold the largest share (about 92%) of search ad revenue in the U.S., essentially making it a monopoly. Thus far, Google's extensive index that offers the best results has given them a competitive advantage over other search engines.
However, of late, Amazon has been able to slowly chip away Google's dominance in the search engine field and is expected to be able to continue to do so. This is due to people's recent habit of using Amazon's search engine for online shopping. Over the course of the next year, Amazon's search engine market share is expected to grow from 12.9% to 15.9% while Google's share is expected to shrink from 73.1% to 70.5%.
Where countless other search engine companies have failed, Amazon is succeeding because they are already a large, well established and resourced company which allows them to get past the high threshold it takes to compete in the search engine market.
https://www.cnbc.com/2019/10/15/amazon-is-eating-into-googles-dominance-in-search-ads.html
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Interesting Topix my question is whether or not this forces either Google or Amazon to compete with each other for the market share which it obviously does but on top of that are they both going to be forced to create improvements on each search engine and will Google try to cut into the online shopping market?
ReplyDeleteIt's really interesting to think of amazon as a search engine, I really hadn't thought of that before. It's crazy to think that a different search engine could take on google, but it makes sense that Amazon would be the one to do it. But can amazon really be used as a search engine for anything else other than shopping? is that a huge threat?
ReplyDeleteOne nuance mentioned but not highlighted in the source is that Amazon's search and advertisement business is entirely built on their shopping search. This means a few things:
ReplyDelete1. Amazon can't eat into Google's search space beyond Google Shopping, the products are not substitutable. The market is expanding as people do more online shopping; looking only at marketshare is misleading.
2. Amazon is "cheating" in the ad market. While Google only allows clearly-marked ads adjacent to search results, Amazon is literally letting people pay for a higher ranking. This will inevitably degrade results beyond a certain proportion, so growth is only sustainable in proportion with their shopping revenue.
In my view, Google doesn't need to consider a threat from Amazon right now.
I've never actually thought about Amazon as a search engine, so I thought it was really interesting that you brought that up. However, since Amazon is solely a shopping website, how much can it actually cut into Google's profits?
ReplyDelete