Google seems unstoppable. The company IPO’d in August 2004 at $85 dollars per share, and today trades at close to $400. Investors earned almost 5x their money, enjoying an annual return of over 35%. Google’s market share in the U.S. core search market is similarly impressive. comScore announced April’s market share numbers today, and to no surprise, Google is once again taking share away from its competitors. Google’s market share increased to 64.2%, an increase of 0.5 percentage points over March. Its closest competitor, Yahoo, commands a measly 20.4% market share, after having lost 0.1 percentage points in April (see http://www.comscore.com for list of rankings).
So what is it about Google? Can it become more powerful as more and more people use it? Do its search capabilities become more refined as more people rely on it, as it draws from more datapoints to deliver the “perfect search result?” And if this is the case, why don’t the other search engines bow down and accept their fate as dying stars? Google’s competitors must be convinced they can regain some of the market share they’ve lost, or maybe the economics remain compelling as their market shares diminish period over period.
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