Since its launch in the late 1990s, Google has grown to become the dominant leader in Internet searches. The name has even entered our lexicon as a verb to describe online searches—as in, “I googled the recipe.” Google—which is owned by parent company, Alphabet Inc. (GOOG)—has only two direct competitors in the United States with substantial market share: Microsoft Corporation's (MSFT) sites and Verizon Media (formerly known as Yahoo and Oath).
However, its most threatening competition may come from search engines within websites and apps that offer more than just searches, such as those of Amazon.com (AMZN) and Facebook (FB).
- In the fiercely competitive and profitable world of online search, Google dominates in the United States with a 62.5% share of the web search market.
- Microsoft sites (Bing) and Verizon Media (Yahoo) come in second and third in U.S. web search market share, capturing 24.7% and 11.5% respectively.
- Google faces indirect competition for Internet dominance from search engines within Amazon and Facebook, especially as people bypass Google altogether and use these sites for their searches.
The Major Players in Search
The market for online searches is golden, representing around half of all online ad spending. Estimates from eMarketer indicate that digital ad spending worldwide will reach $385 billion in 2020 with search ads accounting for a large percentage of that. The profitable nature of search means it is one of the most fiercely competitive arenas in the online world.
Google was founded by Larry Page and Sergey Brin while they were students at Stanford University, and it was incorporated in 1998. For more than a decade, the company has been the leader in online searches. As of October 2019, Google is ranked as the most popular website in the world by web traffic data firm Alexa Internet.
Google boasts a 62.5% share of U.S. web searches as of July 2019, according to Internet analytics company comScore. The company makes money primarily by selling online advertising and is dominant in this area.
Microsoft launched its search engine, Bing, in 2009, competing directly with Google. Bing took over from its predecessor called Live Search, which was launched in 2006. Microsoft invested heavily in promoting Bing, and it was successful in increasing its market share within a relatively short time frame. In 2009, Bing began to also power Yahoo Search.
According to comScore, Microsoft sites had a 24.7% share of U.S. desktop searches as of July 2019. Like Google, Bing makes money from selling online advertising, which currently allows customers to place ads alongside its search results.
Verizon Media (Yahoo and formerly Oath)
Yahoo started out as an online directory in 1994, and by 1998, it was the most popular starting point for web users. In 2001, Yahoo's search was powered by Inktomi. After that, it used Google technology until 2004.
In 2017, Verizon Communications (VZ) announced it had completed its $4.48 billion acquisition of Yahoo. In 2019, the company formed Verizon Media, a division for its online and media businesses, which include Yahoo and AOL. According to comScore, Verizon Media sites have an 11.5% share of U.S. web searches as of July 2019.
Ask Network and Baidu
Ask Network has a modest 1% share of the U.S. web search market, according to comScore. Baidu is the leading search engine in China and is ranked the third most popular website in the world by Alexa Internet as of October 2019. However, since its results are most relevant for Chinese users, it is unlikely to be a major competitor to Google outside of China.
Indirect Competition to Google Search
Speaking in Berlin in 2014, former Google and Alphabet executive chairman Eric Schmidt said, “Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon.”
He pointed out that very often shoppers will bypass Google, saying, “Almost a third of people looking to buy something started on Amazon—that’s more than twice the number who went straight to Google.” Additionally, product searches are naturally among the most lucrative and remain to be highly important from a business perspective.
A tangible threat from Facebook looms with a socially powered search drawing from the company's treasure trove of data. With over 2.4 billion users in 2019 and a deep understanding of their interests and relationships, Facebook has the ingredients to make a formidable search alternative.
Speaking at a TechCrunch Disrupt conference, CEO Mark Zuckerberg articulated how Facebook could use its assets to compete in searches, stating, “Facebook is uniquely positioned to answer questions that people have, like, 'What sushi restaurants have my friends gone to in New York lately and liked?' These are queries you could potentially do with Facebook that you couldn't do with anything else; we just have to do it.”
The Bottom Line
Arguably, the U.S. Internet search industry has become a duopoly controlled by Google and Bing. Combined, Bing-powered searches make up 24.7% of the U.S. market, while Google accounts for 62.5%. Although it seems unlikely that Bing will overtake Google, the search engines within Amazon, Facebook, and other sites could contribute towards a paradigm shift in online searches.