Analyst: Google could disappear in five years

“Google may be on its way out as the dominant player in search, according to one analyst — and could even ‘”disappear’ in as little as five to eight years if the competitive pressures that ultimately claimed other search giants start to take root,” Cadie Thompson reports for CNBC.

“In the wake of a surprisingly weak earnings report, Eric Jackson, Ironfire capital founder and managing member, said Google could easily find itself fending off the woes that eventually took hold at embattled Yahoo,” Thompson reports. “‘They could disappear in five to eight years and disappear in the sense that Yahoo used to be the king of search. Now, for all intents and purposes, Yahoo has disappeared,”‘ Jackson said Thursday on CNBC’s Squawk on the Street.

Thompson reports, “The rise of mobile will lead consumers to want to search in new ways, which may open the door for others to enter the search space. The number one contender may just be Apple — one of Google’s fiercest competitors, he said… “‘I don’t think typing in a blue box is the ideal format for a mobile world. And I think the best opportunity out there to displace Google in this area is probably Apple’s Siri.'”

Read more in the full article here.

MacDailyNews Take: As we wrote earlier this week: “What you are seeing is a paradigm shift. Until mobile ad rates catch up and unless Google can figure out a way to monopolize it they way they did with the desktop (hint, they can’t, thanks to Apple), they are a declining one-trick pony. If they don’t come up with some new, meaningful revenue stream, they are in for a world of hurt. Android isn’t it – they make little or no money from it and the users are cheapskates, so the ad rates Google can command for Android suck. The desirable users – the ones with money to spend and the will to spend it – are on iOS and seeing Apple iAds.”

Google’s going to rue the day they got greedy by deciding to try to work against Apple instead of with them.MacDailyNews Take, March 09, 2010

[Thanks to MacDailyNews Reader “Joe Architect” for the heads up.]

Related articles:
Google results, filed by mistake, miss; shares dive – October 18, 2012
Why does Yahoo CEO Marissa Mayer consider Apple’s Siri the perfect search engine? – October 19, 2012
Apple hires Amazon A9 exec Stasior to run Siri unit – October 15, 2012
With Siri and new alliances, Apple takes on Google search – June 21, 2012

92 Comments

      1. Don’t you think that is already in the works? My guess is one year after Apple’s mobile Maps app works as well as Google’s current mobile maps.

        Ummm, that would be the next upgrade of MacOSX.

      1. No, Apple has never been the dominant player in any field in which they compete, for one thing. And Apple’s moat, OS X integrated with its own hardware, is miles wide and very deep. Google’s is effectively non-existent now. Anybody who wants to can create a search engine.

            1. Do you not think that a 20% drop in same Q profits is a sign of potential problems @ GOOG? There was a drop in revenue from both AdWords search ads as well as YouTube Ads. And this was WITH ad sales actually being UP. The average price paid by advertisers is dropping like a rock. Why? Because clickthroughs are also dropping like a rock. Ad fatigue has set in, and it is mostly Google’s fault, as they stacked the deck too heavily on their search results with their sponsored listings. Most people completely skip the first results on their search results because they have caught on that they are ads.

              And mobile? Over 50% of local searches are now done via mobile devices. And it is expected that mobile searches (and this does not necessarily mean Google mobile searches) will outnumber desktop web searches in 2013. Advertisers are discovering that mobile clicks are worth FAR less than the old Web search clicks were – and guess what? Search has gone mobile, in case you hadn’t noticed. Advertisers are not going to pay what they used to pay for search ads on mobile. The economics just don’t work.

              GOOG’s core business is at risk now, and their attempted moves to try to capitalize on mobile look as if they may actually backfire, with AAPL kicking them to the curb, and MS may possibly end up in 2nd place in mobile – and you know they are no friend of Google’s.

              While I think the 5 year estimate is a bit too soon, I think that in 10 years Google will not be in the position they are in currently unless they can figure out a way to reinvent themselves.

              From what I’ve seen, everything “new” that they try is all aimed at trying to make their now faltering business model continue to exist. They will need to truly change their business model to attempt to survive long term. Nothing they have done so far shows that they are willing to do so.

            2. Apple was near bankruptcy after Steve Jobs left. I think losing it all is damn more significant than a simple reduction in profits. Google also dominates Yahoo and Bing. Siri will improve over time but it’s too early to tell if it will kill Google. Siri only functions with iOS. The vast majority of phones, tablets, and other devices on the plant are not compatible with iOS.

            3. In your opinion, Google, in the face of disaster, irrelevance, and total failure will do nothing to avert the impending collapse and fade into history. Is that what you would do?

            4. @MacFreek No, it is not what I would do. But it is not as simple as it sounds. Ad rates and clickthroughs have been declining for years now. I’m just not sure that Google believes that they are doing anything wrong based on their moves to date. We will see. We’ve all seen seemingly unstoppable companies fail before, haven’t we?

              I certainly don’t know the future, but so far, they seem hellbent on trying to force their existing business model to work. A few more quarters will better tell the tale.

            5. So, if you would not do nothing then it is reasonable that Google will do something and possibly extricate themselves from their diminishing revenue stream. Thanks for agreeing with me.

            6. @MacFreek Well, I for one never thought that Google’s business model was a sustainable one. I was once long on GOOG, but sold all my shares quite some time ago (for a nice profit, admittedly).

              We will see what happens. All I am saying is that so far, everything that they HAVE done to try to deal with their situation isn’t working, and their approach to mobile (alienating their potential biggest partners) is actually currently doing the opposite.

              Do you currently know of some master plan that will “extricate themselves from their diminishing revenue stream”? It doesn’t seem that Google does. If you do, I’m sure that Larry has a very high paying job waiting for you in Mountain View. 🙂

      2. In that time Apple understood and change direction. First, they bought NeXT with Jobs inside and got focused. Later, they widen their business with the iPod, the iTunes Store, then the iPhone and later the iPad, becoming more than a “one trick pony”, mainly because they had the hardware and the software, the skills and guidance.

      3. Google is screwed, MacFreek.

        Their ad business, around which the entire company revolves, is collapsing. Android makes crap for profit. Motorola is a money pit.

        Their search engine could be obliterated by a new upstart just as easily as they obliterated Yahoo when they themselves were a new upstart. This could happen at any moment. Hell, perhaps Mayer’s Yahoo will do this.

        They’re heading full speed towards an iceberg and who is going to save them? They don’t have a Steve Jobs figure to return and get the company back on track.

        What’s going to rescue Google? Wishful thinking?

    1. In one way, yes since then Apple would be the last man standing and possible become a cumbersome giant like MicroSoft. I did say “like”, but Apple as for now has the spirit of Steve Jobs still flowing through the company and will have for many years from now, but all the people working today will eventually retire.

      1. That, plus there are no schools that are teaching that “style” of management. So, unless Apple has a defined internal training program, they will eventually run out of “Apple” thinkers and will end up like other companies.

          1. That ‘style’ of management isn’t something you pick up in a university, or training program. I think that’s the main problem we have, people get hired based on paper qualifications while the real world is where you can learn things that apply in the real world. A course can only show you so much, some basic principles at best, and then only if the people doing the teaching are any good. Most of them aren’t, and we are seeing the results.

            A study by the American Psychological Association reveals the core of the problem, (especially Study 3 (Phase 2): It Takes One to Know One):
            http://gagne.homedns.org/~tgagne/contrib/unskilled.html

            When those who appoint directors are not competent enough to know what is needed, they are unable to appoint through knowledge and rely instead on qualifications, which are insufficient to guarantee appropriateness.

        1. Apple has demonstrated, ad nauseam, that they compete against themselves. As example will suffice: Forrestal team that wanted to shrink OS X to fit into iPhone and other team inside (sorry, I do not remember the name) who wanted to take on Linux and grow from it. They compete and Forrestal won. The other guy left Apple, by the way.

        1. Isn’t it creepy people who willingly choose Microsott even after seeing its flat-footed, bull-in-a-china-shop, bald, tongue lashing CEO in action? Ballmer is about the most cliche example of a disgusting CEO as is possible with a singing voice only a mother could love.

      1. Besides, Google are the best defence Apple has against any allegations of having a monopoly on mobile OS devices. Google gets the user numbers and both the EU and DoJ are happy with the level of competition, whilst Apple takes 80% of the industry’s profits.

        Not that having a monopoly is an issue of course, but you do have to tread a lot more carefully when you have one, lest others complain you are leveraging your position to lock them out.

  1. I have been posting this scenario for months as one of th,e reasons for first,Siri and second the importance of the new iPad Mini….once you strangle Googles ability to make ad revenue….it’s adios.

    1. Edward! What you doing up so late? Tomorrow we have to go visit Uncle Cho and leave early in the morning and you have still not brought the Kimchi in like I asked you to before dinner. Get to bed! Samsung and Google may pay you, but they not own you!

  2. Um, I kinda sorta doubt that Google search is gonna die. There continues to be nothing comparable. MS Boink is a joke. I’ve done the side-by-side-by-side challenge between Google and Bingo and Yahoo. Google wins every time.

    HOWEVER, I can see Google killing themselves off with their CRAP, that being just about everything else they make.

    I can also see Siri kicking Google’s ass to the curb on mobile. I just don’t see a desktop alternative to Google search. Well, until Siri arrives for the desktop!!! IT’S GONNA ROCK! 😀

    1. Supposedly a new and independent alternative is duckduckgo.com. I haven’t used it enough to compare its results against google and others but some say search results are far better than Google’s for many topics.

    2. Derek – Goog’s search patent runs out *I think* in 2015 or 2018… anyway, soon. I didn’t read the article, but I assume the author might mention that – there have been a bunch of articles before that went down this road.

    3. Being the best does not insure survival. Lots of best in class products have failed for one reason or another. Lots of crap products products have prevailed.

      I think the development engine that Steve created will prevail, and do it with BEST in class product.

    4. I recently did a search for a wiring diagram for my furnace in my house. Using Google I got nothing but people wanting to sell me a new furnace. Using Yahoo I finally got a manual for my furnace in PDF format. Google is screwing up their search results by selling favorable placement in search results. I seldom use them anymore for this reason alone, much less that I hate giving data to these evil creeps.

      1. I stopped using Google because I got tired of the first dozen “results” being other search engines, and having to skip to the second, or third, page to start getting something relevant.

    5. I don’t see Siri taking Google down. Actually, I don’t see anything involving voice being a major player in this area anytime soon. I use Siri all the time. But, I have never seen any one else use it, despite being around iPhone users daily (hourly?). Unless there is a major paradyme shift in the direction of dictation and vocal commands, the battle for Siri will be uphill IMHO. But, I hope I am proven wrong.

  3. I hardly see Google Dying anytime in the next ten years, they continue to diversify away from search and are developing new products all the time. I’m an apple fan but have to say there is room for both of them and google is anything but a one trick pony.

    1. Okay I’ll bite. Where does Google make revenue to justify their huge PE ratio and share price other than Ad revenue generated through a search monopoly?

      Would Google even be a 30 billion dollar company if they closed down their search engine and stopped collecting ad revenue?

    2. Don’t underestimate Yahoo in challenging Google. Yahoo was in the process of death throes until it managed to pull a rabbit out of the hat – it snatched Marissa Mayer from the death grip of Google. With Marissa at the helm Yahoo is on the path of rejuvenation. Marissa was a star at Google but was uncharitably sidelined due to the practice of nepotism in Googledoom. Hell hath no fury like a woman scorned. Just watch… as Google crumbles.

    3. The only problem with all of their new products they are developing (or, STEALING, in Android’s case) is that the business model always remains the same as their search engine business – to gather data so that advertisers can target their markets so Google can make money from charging for advertising.

      This is the only reason Google does anything. Anything new they create, and any new service they provide is only to keep you in their systems so they can gather data and target ads. This is why your Google account works across everything, and why Gmail now automatically adds new accounts to Google+. Everything is all done for one goal, to gather data so advertisers can target you better. They also seem to be in a mode where they don’t know what to do next, so they just throw crap at the wall and see what sticks.

      The real problem for Google is that ad rates are WAY down. People have become immune to AdWords advertising, and Google doesn’t appear to have thought long term about what would they would do once ad fatigue set in and searches went mobile.

      I give them more than 5 years, but I’d think a Google as we know them today would be a huge stretch in 10.

    1. Please ignore my last post. Apple is the king of hardware, but has a long way to go before they can knock Google off the pedestal as the best services provider (I do think Apple maps is a damn good start). It’s true that most of their revenue comes from ads, but it’s also true that most people do their web searches on Google. This means that they have a large audience to which they can advertise. Honestly, I’d love Google to stay in the game if for nothing else but offering competition. This will keep Apple on its toes. At least until Microsoft can get their stuff together.

      1. If Windows8/RT/whatever is any indication, MSFT doesn’t have a clue about the future. Watch its desktop business falter in the next three years.

        MSFT knows it, too. That’s why they have hedged their bet with mobile Office (coming soon to an iOS device near you).

        Google may own desktop search, but it relies on Windows dominance of the environment (see above).

        IPad and Mac computers are eating Windows share for lunch, and we are fast approaching the point where Windows (and all of its derivatives), will be the main course for dinner as well.

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