Search Engine Optimization

Google offers very financially attractive deals to search competitors convincing them to share and monetize Google’s market power. This eventually leads to long term migration from the host, to Google, and creates financial as well as strategic dependencies.

• Google holds ~60%+ search engine market share. It holds 14% more from distribution deals with AOL, Myspace, Ask, Craiglist and Amazon, giving it a total of 74%.
• If Yahoo deal was to happen, Google would have 92% market share control.

The deal would lock Yahoo in Google dependence on profits, potentially eliminating Yahoo’s innovation in the advertising space.

Ask.com, Amazon, AOL and eBay are dependent on Google for monetization of their content. They all have their own unique business models, but when it comes to content and search – Google is the ultimate market leader. Without Google none of the companies would be able to replicate revenues delivered with their content, making them financially reliant on Google. This shows power that Google wields over the internet.

Most Search Share = Largest Ad Distribution Network

Online market works on the principle: more eyeballs = more money. Google understands this, and pays partners to ensure that it has the largest audience. Google guaranteed Myspace $900 million over three years, but admits its very challenging to monetize social network. On the other hand, by exposing its brand to millions of Myspace users Google gains long term mindshare and traffic, which will eventually cover losses and create profits.

Strategic Buy Outs of Potential Competitors

Companies that pose a potential threat to Google are bought out.

YouTube, one of the biggest online innovations (at the time), was swallowed for $1.6 billion without any clear monetization strategy. To this day Google is having trouble making money from You Tube, but that was not the real cause of this purchase. You Tube showed immense innovation (for the time), which if left to itself could pose a threat. Google also bought the “first mover” advantage, capturing more that half of all online video streaming market share.

Another example is Yahoo / Microsoft, which both compete more with Google than with each other. Google knows that combined Yahoo market share with Microsoft’s cash reserves can pose a much larger threat than those companies alone. It made everything in it’s power to stall the deal, including proposed pay per click partnership with Yahoo.

Despite Google child like brand image, its a tough, smart company with big guns.