Google Is Shrinking
According to the latest data from comScore, Google's (Nasdaq: GOOG) share of the search market fell four-tenths of a percentage point in August just as Bing partners Microsoft (Nasdaq: MSFT) and Yahoo! (Nasdaq: YHOO) gained share. Thus, the headline: Google is shrinking.
Except that it isn't true. Let's take a closer look at Google's average search market share for the first and second quarters of 2010, and then compare the findings with the average revenue growth of the top three search contenders:
Search Sites
Q1 2010
Q2 2010
% Point Change
Google Sites
65.3%
63.6%
(1.7)
Yahoo! Sites
16.9%
18.3%
1.4
Microsoft Sites
11.5%
12.2%
0.7
Ask Network
3.8%
3.6%
(0.2)
AOL Network
2.5%
2.3%
(0.2)
Source: comScore.
Company
Q1 2010
(in billions)
Q2 2010
(in billions)
Sequential Change
Microsoft
$14.503
$16.039
10.59%
Google
$6.775
$6.82
0.66%
Yahoo!
$1.597
$1.601
0.28%
Source: Capital IQ, a division of Standard & Poor's.
Google isn't shrinking it all. Sure, Bing's success seems to have created a tailwind for Microsoft, but that could just as easily be due to Windows 7.
What's important here is that The Big G's search market share doesn't correlate with revenue growth as neatly as the bears would like to believe. In simpler terms: Google isn't as dependent on search share as international peer Baidu (Nasdaq: BIDU) is.
Google has Docs, Gmail, Apps, Android, Maps, and several other hit products that help drive revenue. The Big G's Big White Search Box is a small part of its story.
