Can anyone really compete with Google (Nasdaq:GOOG)? The most valuable brand in the world, Google easily claims the lion's portion of search engine traffic with 65.4% of the market share. In contrast, Yahoo (Nasdaq:YHOO) and Microsoft (Nasdaq:MSFT) site searches account for only 16.1% and 13.6% respectively, according to data provided by comScore. Google even has the lead for smartphone platforms, outpacing both RIM (Nasdaq:RIMM) and Apple (Nasdaq:AAPL). And not surprisingly, in terms of online video, Youtube, which was purchased by Google in 2006 for $1.65 billion, has approximately the same number of monthly unique visitors as the cumulative amount of the next three top competitors.

TUTORIAL: Managing Risk And Diversification

Because there are a number of potential problems with Google search, such as content farms finding their way into the top search engine results pages and poor travel search results, a number of small engines have been popping up to capitalize on the growing concerns. Gogobot, for example, focuses on optimizing travel searches, Duck Duck Go is concerned with improving privacy settings and Blekko is actually attempting to create an all around better search. Despite the ever increasing number of search engines, Google is unlikely to become the next Altavista. Cuil, a smaller search service provider that claimed to host the largest index of web pages, once hoped to topple Google. However, after raising $33 million in venture capital in 2008, its operations ceased in September of 2010.

With such a dominant online position and a superior product, does any search engine ever have even the slightest chance of gaining top spot? Perhaps. Facebook is currently the internet's most visited site, topping Google for the first time in 2010. DoubleClick (owned by Google) estimates that as of February 2011, Facebook has 770 billion page views, while Youtube, the internet's second most visited page sits at 85 billion. In recent months, as rumors continue to surface that Facebook is planning to go public, suggested valuations of the social networking giant have been surging. In February 2009, Facebook was valued at an estimated $3.7 billion, 5 months later it was valued at $10 billion. It hit $50 billion by February 2011 and $79 billion in the beginning of March. By end of March Facebook is valued at a staggering $85 billion. Facebook has also made progress toward being a dominant player in online video content. The company is in the testing stages with Time Warner (NYSE:TWX) of a movie rental service.

Facebook Search? Not Yet But Maybe Soon
On March 24, users submitted Facebook screenshots of a web search box on top of the homepage. Although, a spokesman claimed that the search bar was caused by "unknown actions of third party targeting" and Facebook is not currently in the process of adding search functionality to the website, many are speculating of a potential Facebook-Bing deal. Whether or not Facebook pursues adding search capabilities either independently or through a joint venture, this addition just makes sense to the growing business model. With more than 500 million active users, 50% of whom visit the page daily, Facebook has already immense traffic flow going through its pages. Furthermore, it has access to what users "like" and thus consider relevant online information. Utilizing this information and leveraging on its traffic levels, Facebook can potentially one day develop a search algorithm to compete with Google's. Blekko and Bing have already begun integrating such a strategy. (For related reading, take a look at 5 Signs That Social Media Is The Next Bubble.)

Bottom Line
As Google executives and programmers continue to shift over to Facebook, the social media site may eventually pose a real threat to the search giant. (So you've finally decided to start investing. But what should you put in your portfolio? Find out here. Check out How To Pick A Stock.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  2. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  3. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  4. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  5. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  6. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  7. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  8. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  9. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  10. Investing News

    Corporate Bonds or Stocks: Which is Better Now?

    With market volatility high, you may think it is time to run for corporate bonds instead of stocks. Before you do take a deeper look into which is better.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!