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By Ben Charny  |  Posted 2006-02-27 Print this article Print

Whats at stake is billions of dollars in revenues. Advertisers in the United States were on track to spend $4.2 billion on paid search in 2005, a 35 percent increase over 2004 spending, according to JupiterResearch. Radar Research and IntelliSurvey found U.S. and Canadian advertisers spent $5.75 billion on search engine marketing in 2005, a 44 percent increase over 2004.
The paid listings market is expected to increase from $4 billion in 2005 to $7 billion in 2010, resulting in a compound annual growth rate of 12 percent.
Internet research firm Nielsen/NetRatings reported the total number of Internet searches in the United States grew this year by 55 percent, with nearly 5.1 billion searches performed across approximately 60 search engines during December 2005. The last time the market supported the emergence of a top-tier operator was about eight years ago, when the first of Googles data centers, built inside founder Larry Pages college dorm room, went into operation. Read more here about Googles data center upgrade. Google soon turned heads because it was easy to use, something taken for granted nowadays, but in 1998 it was a major chore to use a search engine. Over the next six or so years, Google would enjoy the kind of market build-up and success thats been experienced by only a few companies. While Yahoo hung tough—it trails Google by only six percentage points—MSN, AOL and Ask Jeeves lost much of their market share and fell from top-tier contention. When the dust settled, three companies—Google, Yahoo and MSN—emerged to dominate the market. As of 2005, these three firms controlled 81 percent of all Internet search. AOL and Ask Jeeves rounded out the top five, with single-digit percentages. And with that, came lots and lots of cash in the hands of just a few. But Googles fallen out of favor in some circles, following a series of uninspiring new features, public relations blunders and customer service fallout. Yahoo and MSN have suffered the same kind of blows to their integrity, mainly after their practice of turning over search terms to federal agencies was recently disclosed. Theres also been an innovation lull. While the top providers were matching each other feature for feature, or expanding into new areas like blogging, RSS feeds and instant messaging, startups and others have been focusing purely on search. Check out eWEEK.coms for the latest news, views and analysis on enterprise search technology.


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