Industries: Web Search Engines, Videogame Players, Portable

¶ … industries: web search engines, videogame players, portable music devices, bicycles, energy drinks, cell phones. Identify major firms industry, extent, determine market share firm. Explain firms compete.

This paper discusses the web search engines market, and will aim to analyze the main players in this industry, how they compete and what their market share is. The paper will also briefly look into the history of web search engines and will investigate some of the public policies that affect the firms that operate in this industry.

The web search engines appeared in the early 1990s, as the Internet began to grow and more and more pages, on different topics, became available for the users. Up to 1993, however, there was no web search engine in existence, most of the information on the Internet was stocked in catalogues, but there was no electronic indexing of these catalogues and these could only be consulted manually. In 1993, the first web search engines appeared, such as W3Catalog, which is still active today.

A big revolution came the following year, with the apparition of text-based search engines, primarily Webcrawler. The great advantage of the Webcrawler was that it indexed the text on Web pages, as it is done today, which allowed the user to type in any search query and obtain page results. The search engines started to become more and more commercial, with the creation of businesses such as Lycos, Yahoo! Or Altavista. Google started in 1998 and by 2000, it was already gaining on the other search engines, including through innovations such as the Page Rank, as well as a better search algorithm based on this.

Google has not relinquished its strong dominance on the market since 2000. By August 2013, with some small ups and downs that will be presented further below, Google had 67% of the market. Yahoo has 11.3% of the market, while Bing, the search engine that Microsoft has created as a competitor to Google, has 17.9%. These three large search engines dominate the market, having over 96% of the total search engine market. Other smaller competitors include Ask (with 2.7%) and AOL (with 1.2%)

Google's market share has, however, decreased over the last years. Its market share in December 2010 was 84.65%, while in May 2011, it was 82.80%

. The market share for Yahoo! At this time was just about 6%, while Bing only had about 4%. Over 2013, the market share for Google seems to have fluctuated in t he 65-68% range, with Bing around 17% and Yahoo! around 10-14%.

From this, it seems obvious that Google remains the consolidated leader on the web search engine market. However, the yearly analysis from the previous paragraph points out to an interesting trend: other competitors are gaining on Google, particularly Bing, which, funded and promoted by software giant Microsoft, including as part of its Internet Explorer and Windows packages, has accelerated its market share gain.

Another interesting note is that there are also regional influences to the way market share evolves. In Russia, the most popular search engine and the one that has the largest market share is not Google, but local player Yandex, with 60% of the market. Google has only about 25.9%. A similar situation can be seen in China, where local player Baidu has 61.6% of the market.

Competition in the industry has become more and more complex, as search engines attempt to provide additional services that will help their core area of activity, namely that of "connecting people with information on the web" and "providing them with relevant advertising"

. So, search engine companies have expanded their services beyond simple search engines to include social networks, mobile applications, online products and services and search engines that link the user directly to e-commerce websites.