1.Discuss competition in the search engine industry. Which of the five competitive forces seems strongest? Weakest? What is your assessment of overall industry attractiveness?
Suppliers are very weak:
Computer components suppliers
Web publishers licensing the search engine
Rivalry among search engine firms is Very Strong:
Rapid growth in online auctions is acting to strengthen rivalry Technology advances from Microsoft is the strongest source of competition Recent entry of capable competitors (MSN) has heightened rivalry substantially Jockeying for position among the search engine competitors is very active. Competing with internet portals & web publisher for advertising dollars Rivalry is centered around:
oName recognition, image
oRelationship with Internet users, web sites, & advertisers oRelevancy of a search results
The threat of additional entry is weak:
The search engine industry has very few legitimate competitors Entry barriers are high which lowers threat of new entry
The major barrier is the marketing/advertising costs needed to attract site users in adequate growing numbers lowering this threat The industry is generating attractive profits which may attract people The pool of likely entry candidates is small lowering the threat The biggest potential threat is for new entry comes from existing online firms (like ISP providers) that expand technology and merge horizontally
Competitive pressure from substitutes is weak:
There are few good substitutes
The number and availability for efficient substitutes are few Competing with internet portals & web publisher for advertising dollars
2.How is the search engine industry changing? What forces seem most likely to bring about major change to the industry within the next 3 to 5 years? Yahoo & Microsoft developing their own search...