Friday, April 21, 2006

Search Fragmentation: Chances are Against It

Gord Hotchkiss, head of search agency Enquiro, writes today about the likelihood of a future where consumers use a portfolio of different search engines and tools. His analysis is "not freakin' likely" (OK, that's a paraphrase).

But he points out some key ideas: online patterns are well-worn and the vast majority of people are not built to be tuned into the latest new online gizmo. Gord is in a good position to know. His group has performed a significant amount of research into consumer behavior.

I tend to agree. Watching the Web 2.0 space (as we can generally call it), you see a steady flow of new ideas. The question, though, is whether or not any of these companies have a high enough perceived value to crack out from the insiders to the mainstream.

Rather, I see a lot of these new companies as having value propositions that are not hugely dissimilar from one another. A ton of companies are somehow situated in the space between content, search, feed-aggregation and contextual advertising. The question isn't necessarily which of these companies has the most compelling offering. It's if the category itself is compelling enough.

The one thing that we can say is that we really don't know. The emergence of one offering may actually kick-start the category. That can probably be said about YouTube. But right now, there's a whole lot of activity and not much outlook. That's a good scenario, if you like Chaos Theories. Somewhere is a winner. But the problem is that there's a lot of investment behind each of these players: this is not a simulated model. Right now, the investment risk is not to be ignored.
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