Google, Microsoft in Search Showdown: A Must-See for 2005

Google will continue to acquire companies involved in presenting reference data to users. A good example of this is Keyhole, which has developed a neat viewer for satellite images and aerial photography.

Want to see what your neighborhood looks like from above? For $29.95 a year, you can see this and pretty much everywhere else. For most people, this is a parlor game, but Keyhole has dramatically lowered the price and improved access to overhead images. Is this enough to propel Googles success? Only a little, but add enough of these together—as Google has the bankroll to do—and it can really add up.

Its e-mail service gives Google more places to sell ads, but the service needs to better contribute to the overall goal of managing users online information. I can imagine a desktop Google application or Web service, capable of indexing the users desktop and stored files, appearing during 2005. I am doubtful that social networks or blogging will become huge revenue sources for Google or anyone.

I never really expected Google to do a browser, and the companys CEO, Eric Schmidt, has denied the rumor. I do, however, expect Google to create one-stop searching from a user interface that supports more types of searches than Google does today.

This could prove to be a critical error, however. Googles success has been built upon simplicity and functionality, two qualities easily lost when a company sets its sights on "bigger things."

It will be interesting to see how Googles revenue mix at the end of 2005 compares with how the company earns its money today. Im sure it will remain predominately advertising-driven, but Ill be watching for the contributions that premium services and non-ad-supported businesses make. Google must find significant non-advertising revenue if its to remain a Wall Street darling.

If I had to guess right now, Id expect that a year from now, Google still will be on top, but that Microsoft will be closing in. But the battle between the two will doubtless make searching at the end of 2005 both more interesting and more useful than it is today.

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