Clearly Google's success started with its vastly superior search algorithm. This search algorithm encouraged Yahoo! to invest in the fledgling firm and license the technology for Yahoo's own search site. From the user's perspective, the higher quality search results got the user to the info they sought quicker and eliminated the "noise" common place in the search results of competitor sites. When Google stood up its own search site, google.com, it was an extremely simple site that lacked any form of advertising. The site did one thing and did that one thing well. Any visitor to the site would instantly recognize the purpose of the site and how the site works. Given there were/are no real switching costs for users of internet search engines, it took very little time for search engine users to recognize the superiority of the Google search and switch for good.
Following the fundamental algorithm, the creation of AdWords and AdSense helped Google monetize their algorithm in ways competing search engines could not. The combination of the powerful search algorithm and the unique approach to advertising based on that algorithm provided an insurmountable differentiating factor during the first decade of the 21st century.
Switching cost issue is very interesting - very true, there were no real reasons for people not to try something different and there was no harm done and then people stayed with Google. I guess - same very reason could backfire Google if better search engines or different way of doing search evolve (i.e. facebook?)....?
ReplyDeleteI also found the switching cost aspect very interesting and true and it turned out that I was not the first to recognize that. Jigar, you had the first-mover advantage :)
ReplyDeleteI've been using other Google products and become a very loyal user. Note that several Google products such as emails, calendars, docs, photos etc. have high switching costs. Furthermore, "habits stick", so if you get used to google search, know what you really need to search (this needs skills!) then you almost always find more results than you need. Then, what else do you need from a search engine? This means that other current and potential competitors find it extremely hard to attract users of google search.