Google's Real Rivals: Yahoo, MSN, And Amazon

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August 24, 2004 (6:00 PM EDT)

Google's Real Rivals: Yahoo, MSN, And Amazon

By Gregg Keizer ,

Google has an almost insurmountable lead over search engine rivals, but will face its stiffest competition from portals like Yahoo and MSN, and mega-online retailers such as Amazon.com, according to a new customer satisfaction study of e-business Web sites released Tuesday.
"Google retains its status as the industry leader, not surprising for a site that has entered the lexicon as a verb," said Larry Freed, the chief executive officer of ForeSee Results, a sponsor of the American Customer Satisfaction Index (ACSI), a quarterly measurement produced by the University of Michigan.
In the latest ASCI numbers, Google ranks number one among search engines with a satisfaction score of 82, far ahead of the second place finisher, Ask Jeeves, which rated a 71.
"Google is a star performer, but other search engines are not its only competition," said Freed. In fact, its main rivals will come from portals, aggregate sites like Yahoo and MSN that yearn to be users' home pages.
"These other players -- MSN and Yahoo and Amazon -- are after Google and will compete with it in the search space," said Freed, pointing to Amazon's A9 search engine, Microsoft's renewed focus on search, and even entrepreneur Mark Cuban's investment in IceRocket, another search engine firm.
In part, the competition from portals is only natural, said Freed, since the two categories -- search and portals -- are blurring. "Google's saying 'We're gonna sell products with Froogle, we're gonna have e-mail that will compete with MSN's Hotmail, we'll have a news service that goes up against portals like Yahoo."
On the portals front, Yahoo continued to lead rivals MSN and AOL by a margin of 78 to 75 and 67, respectively. AOL's relatively poor showing, however, disguises the progress it's made in recent years; according to the ASCI numbers, it's increased by 3.1 percent since last year and by 19.6 percent since it was first measured in 2000. "AOL is back from the dead," said Freed.
No news site, however, is substantially stronger than others in user satisfaction, a problem that plagues providers like the "New York Times" and MSNBC.com. "These sites have no personality and no real differentiation," said Freed. "Loyalty is relatively low compared to search engines, and they're doing next to nothing to give users a preference."
The spread between the high (MSNBC, at 74) and the low (New York Times, at 72) is small, and thus the competition fierce. But news outlets aren't doing enough to keep users loyal, or even attract them in the first place.
"News organizations create incredible loyalty in broadcast and in print, but they haven't been able to trade in on that at all in online," said Freed. "Most people, in fact, don't get to a news story direct through the provider's site, but through a portal or a search engine. They don't see them as destinations in their own right."
Overall, said Freed, the ASCI ratings show that Americans' satisfaction with search engines, portals, and online news sites is edging upward, but that there's plenty of room for improvement.
The average of the three went up slightly since 2003 -- increasing from 71.4 to 72.5 -- but still lags behind the cross-industry average of 74.4 and is way behind the average of e-commerce, which holds a satisfaction rating of 80.8.
The numbers should improve, however, as search engines, portals, and news sites learn how to keep users happy. "Many of the things we do online we do offline, like banking and buying. Those businesses know what they have to do. But portals and search engines are new, and they're still trying to figure everything out," Freed said.
"If nothing else, the scores will go up as those portals and search engines with lower scores simply go away."