Every month, web measurement companies such as Hitwise, Comscore, and Compete post search engine rankings that show Google gaining in share of search queries. Every quarter, Google posts rapid gains. In his keynote at the Search Insider Summit last week, Jordan Rohan stated that Google was appropriately valued at $700 per share, and it's time to buy if it falls down to $600.
Google's revenues are partly dependent on hundreds of thousands of AdWords customers, but large SEM firms like Efficient Frontier control a significant share of search engine spending. How we allocate client spend across the search engines is determined in large part by performance. So if users are are migrating toward Google, as the metrics firms indicate, search engine spend must move toward Google in order for advertisers to achieve the volume of impressions and clicks that will result in conversions. Even if conversion rates are high on other engines, as they have been on MSN, the volume of searches may not be high enough to increase spending.
The share of Efficient Frontier's total search engine spend on Google increased from 71% in November 2006 to 77% in November 2007. Yahoo Search dropped from 23.5% to 18%, while MSN dropped from 4.9% to 4.1%. Incremental spend grew on all the engines during this period as we added new clients and legacy clients increased spend, but a disproportionate share of that growth has been on Google.
I don't mean to sound like a broken record with all these blog posts about Google's growth, but watching the company grow over the past 3 years that I've been in this industry is sort of like watching a shuttle launch over and over again - it's amazing and slightly shocking. We can't take our eyes off of it part of us and wishes we were on it. Even if we don't work for Google, we actually are the rocket that powers the shuttle, since so many of us have businesses and livelihoods that depend on and profit from Google's growth. I think it's fun. Do you?
Google is the king of search and the search engine wars are over . We have a winner now we all should work at lowering their ppc cost.
Posted by: Joseph Salamone | September 17, 2008 at 09:30 AM