Internet has been the prime source of information, news, libraries, on line banking, e-commencing and web based application. As a result it has been the focus of advertisement industry by any means and several methods have been deployed i.e. search-based or banners. Google strategy was based on search-based advertising. But in order to gain popularity and attract users, they by deploying the best searching method to provide the more correct and reliable search results, tried to gain this market. However since this advertisement market is and will be attractive, the number of competitors in this area is enough to put some force on rivals.
“Competitive forces are never the same from one industry to another (Thompson, Strickland & Gamble, 2010, P.60). However in order to identify competition forces in the search industry and distinguish the strongest one, we need to look at each of five forces one by one:
Threat of New Entrants
Since the search industry is growing and offer attractive profit opportunities for advertising companies, Microsoft with higher capital although has been in this market before, but it intends to enter to this market aggressively by introducing new initiatives in search industry like Bing. But since Google has high degree of user’s loyalty, it is harder for new entrant’s i.e. Face book, Twitter or Microsoft to enter to this market easily. Also Google’s sophisticated infrastructure makes difficult for other rival to enter to this market easily.
Refer to one of Goggles 10 principles: “By always placing the interest of the user first, Google has built the most loyal audience on the web. And that growth has come not through TV and companies, but through word of mouth from satisfied user to another, (Gamble 2008, C262).
Threat of Substitutes
Social media i.e. face book, Twitter gives more concern for search engines like Google, Yahoo. Social networks have employed real time searching capability which makes competition harder...
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