| May 12, 2004 |
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There are only a few ways people log onto the Internet, and an even more limited way in which they search for information. You are being managed from the time you turn on your computer, and Google proposes to be one of the greatest manipulators of all time. It already is. There are only about five places to start a search online - three portals - Yahoo!, MSN, and AOL, and two search engines - Overture and Google. That's a pretty small funnel to distribute the millions of daily online visitors. Google has sprinted past its rivals, Yahoo!, MSN, and AOL , in market share already. In the U.S., according to comScore Networks, Inc., Google accounts for 34.7 percent of Web searches, Yahoo!, powered by its own paid search engine Overture, has 30 percent and MSN has 15.4 percent. Google blew the doors off of tradition by capitalizing on searches in a new way - by selling the keywords to guarantee results to advertisers. It is this introduction of paid search listings - text ads that appear alongside algorithmically-obtained search results from keywords inputted by consumers - that made Google profitable inside a year of introducing its paid search strategy. According to one news report, in 2001, Google "took in $86.4 million in revenues for a profit of $7 million. By 2003, revenue reached $961.9 million and its profits rose to $105.6 million." Now, the paid search market is expected to grow to $4.3 billion in 2008 from $1.6 billion in 2003, according to Jupiter Research. Some predict that advertisers, pleased with increasingly targeted results, will influence Google to become more of a portal like MSN or Yahoo!. Then it will not only be the largest search engine, it could be the largest entry point for consumers to get on the Web, which means that Google can manipulate the public to go any direction it or its advertisers want. Now Google is inviting the masses to an IPO share auction which will allow the masses more individual buying power. Normally, small investors are kept outside the gate in order to supply insiders with early profits when they are finally let in the door. In an unprecedented stock option auction, anyone who can ante up will be able to own shares of Google at IPO levels. Google has more mass appeal than ever, hence the term "Google it," and it will use that goodwill to get users of its search engine to become investor-owners of the company. Unlike most companies in the IPO stage, Google is profitable and far from an embryo, one of the few companies powerful enough to dictate terms to Wall Street. Small investors are already hoping for a cleaner, less stacked-deck experience which will be welcome after years of watching a parade of corporate leaders compound greed with felony. What does this mean to Realtors? Over 71 percent of homebuying consumers search for homes online. Most consumers who use keywords to find homes never click past the first page of results. In addition, Google's revenue model means that advertisers will attempt to steer consumers to their own companies. As Realtors find themselves moved further and further back in the search results, they will also find themselves increasingly outbid by larger companies, including lead management companies that promote themselves as consultants in finding Realtors, property, loans, and other services associated with homebuying and selling. One of the few ways to be found for free on the Internet will get a lot more expensive, especially if Google raises even close to what the founders and underwriters want - $2.7 billion. Then, like every other publicly traded company, it will answer to its investors who are certain to want ever-increasing revenues. |
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