Search Wars

M & A activity in the ‘Search’ space continues to grip global investor interest.

The two big plays at present are Google’s proposed acquisition of Double Click and Microsoft’s tilt at Yahoo! Are these just the short-term realignments and positioning of major market players, or a signal of more significant developments ahead?

Ask the owners of traditional news and published content. Working with Google, Yahoo! and Microsoft (MSN) has in the past provided these content owners with some legitimate monetising of their IP. That was the basis of the relationship. Are times changing however?

Google, in particular, has been aggressively moving into the content space; text-based, mobile-based and video-based. YouTube, its video sharing arm, is currently facing potential legal action on a number of fronts for the unauthorised display of third party content on its site. Facing a $1 billion lawsuit from Viacom over copyrighted material, Google has claimed it is protected by the Digital Millennium Copyright Act. According to Google, by hosting content provided by others, the law's Safe Harbor provision protects it from liability so long as they act fast to remove copyrighted content once the owner notifies them. Viacom has rejected this claim.

The question surely being asked is: ‘When does an online search partner start to become an online competitor?’ Traditional news and content publishers have already seen some historic revenue streams cannibalised by online portals. Think Craiglist in the States or Trademe in New Zealand.

My own view is that the current M & A activity is the prelude to a much bigger play. The control of content and its dissemination is an end game with potentially huge rewards going to the victor. I suspect that battle has just been joined.

Mobile Search is Hot and its Here

The ‘Mobile Search’ space was one of the big plays of the week at this week’s Web 2.0 Expo in San Francisco. When asked in one of the sessions, what technologies are the most intriguing to Google, Chief Executive Eric Schmidt said during a question-and-answer session, "The biggest growth areas are clearly within the mobile space”.

ABI Research forecast global mobile marketing and advertising to increase six fold to $19 billion by 2011, from an estimated $3 billion by the end of 2007.

Mobile search is clearly a potentially major disruptive technology for existing market leaders, Google, Yahoo and Microsoft. Not only is the platform different, but a whole host of new industry partners come into play as do different business models.

From a platform position, improved voice-recognition technology and the inclusion of global positioning system chips into mobile phones open the door for new applications to help users find relevant information wherever they find themselves. In addition, improvements in handset technology make today's cell phone capable of doing almost as much as computers of a decade ago.

The potential that Mobile Search offers is evidenced by the huge growth and usage of mobile devices, particularly in developing markets such as China and India. Expect this to be a ‘hot’ sector for some time to come.