Google Facing Increased Pressure From Competitors (NASDAQ: GOOG)

Search is estimated to be a $22 billion industry and is often considered the most lucrative and influential of online businesses. Now the industry is undergoing some changes. Instead of just pointing users in the right direction, the search industry is now trying to develop the knowledge and comprehension to answer specific queries. This has put the industry at its most significant crossroad since its invention and puts Google squarely in the crosshairs of its competitors.

Consumers now want new kinds of customized search, like that on topical sites such as Yelp, TripAdvisor or Amazon. Many of the new efforts that are eating away at Google’s market share are not viewed as traditional search services. Amazon is the current leader in shopping searches, the most lucrative kind because they often lead to sales. On Pinterest and Polyvore, users have marked their favorite things from around the Web to produce results when you search for the things you are interested in. YouTube is often used to search for videos and online maps are used to find local places.

Search is also changing as more people perform searches on their mobile devices. On smartphones, people often go directly to apps, like Kayak or Weather Underground, or choose apps that send information, like traffic or flight delays, before it is even asked for. Shar VanBoskirk, an analyst at Forrester, said, “There is a lot of pressure on search engines to deliver more customized, more relevant results. Users don’t need links to Web pages. We need answers, solutions, whatever intel we were searching for.”

People are also becoming overwhelmed at how crowded the Internet has become, with more than 30 trillion Web addresses currently online. Oren Etzioni, a professor at the University of Washington, said, “What people want is, ‘You ask a very simple question and you get a very simple answer.’ We don’t want the 10 blue links on that small screen. We want to know the closest sushi place, make a reservation and be on our way.”

Even as alternative search options become more popular, Google remains the one to beat. Google has retained about two-thirds of the search market and earns about three-quarters of search ad spending. Danny Sullivan, an editor of Search Engine Land, a blog, said of the alternative options, “They’re the specialty store you’re going into here and there, but they’re not your grocery store.”

The promise of search is so big that Microsoft loses billions of dollars a year on Bing and still has failed to make a dent in Google’s market share. Microsoft says that search is essential to its other products, including the Xbox and its new line of phones. Mr. Sullivan said, “You have millions of people a day saying exactly what they want, and if you’re an advertiser, it’s a beautiful vehicle.”