Niche Search Engines Scratch Out An Opportunity

Smaller search engines have surfaced to reduce the combined market share of Google, Yahoo , MSN and America Online from 88 percent in 2004 to 83 percent this year.

The five percent drop might not seem like much until you realize that Google is the only search engine with growth in the past two years, increasing market share from 31 percent in 2003 to 41 percent in 2005, according to Forrester Research Inc. "MSN's share dropped from 17 percent to 10 percent in the past year alone, putting it just ahead of AOL, while Yahoo! held steady in second place," the report said.

Although the first page that Web surfers see when they open their browser is a major advantage, nearly two-thirds of the people with Yahoo as their default home browser page use a competitor for primary search. MSN lost nearly "one-fourth of its home-page share this year to Yahoo and others." Forrester also said only 9 percent of the people who use Google's search engine weekly set it as their home page.

Effective search capabilities and the speed in which the search engine can return results is very important, according to the report. Google leads in most information-related search tasks such as returning relevant search results topic research with 85 percent, while AOL trails for all 11 search tasks from finding a specific product at 57 percent to finding video content at 42 percent to finding local businesses at 54 percent.

Yahoo was the most popular home page in 2005 with a little more than 20 percent market share, followed by MSN, AOL and Google. Yahoo!'s recent acquisition of del.icio.us, the social bookmark and tag service, demonstrates a commitment to personalized service, something Web surfers are looking for.

Search engines continue to add tools to gain loyalty. But it's not clear that the strategy is working. Google has the largest market share in search, but it has "significant loyalty issues" among users. Sixty percent of Google's home page users use it as their primary search engine, which Forrester Research calls "strikingly low, considering that 41% of all online consumers use it as their primary search engine.

The lack of search loyalty is bad for the Google, Yahoo, MSN and AOL, but it means opportunity for niche players. Small search engines should "optimize their pages through organize search and leverage keywords with paid search to guarantee their present in major search engines," Forrester Research said. "Business-focued search services, such as Kellysearch and ThomasNet, use the large search engines and still provide unique services the major search engines can't match."