While The Google US Marketshare Slides, The UK Dominance Continues

At the turn of the year during a presentation on the future of search, I showed a slide featuring Google's current marketshare in key global territories which had been recently pulled together by Search Engine Feng Shui (see above).

The point I went on to make was that despite intense efforts to diversify their business, Google's revenues - and profits - were still hugely driven by their core search advertising business. For Google to best deliver business success in their company - as they are obliged to do for their shareholders - their obvious opportunity lay in increasing their search marketshare wherever they could.

The best way to do that, it seemed to me, would be to double down their focus on search quality & speed - the core attributes that built their commanding global position in the fist instance.

There are a number of markets where Google has an almost total dominance of search – the UK, Netherlands, Germany, Poland, France, Switzerland, Spain, New Zealand and Australia for example – and as such continued efforts to promote growth would result in lower marketshare returns.

However a number of very valuable markets still offer plenty of room to grow: The US, Brazil, Russia, South Korea and, controversially, China, chief among them.

Concerted efforts to deliver best in class service and flag up the many valuable search features offered exclusively by Google in those territories, along with exploring further localised changes to the interface to reflect local search preferences, could result in significant uptick of overall searcher numbers.

There are also peripheral benefits to improving marketshare and that is the opportunity to stem the brain drain of key employees who had been jumping ship to faster growth companies with attractive share option packages - principally Facebook & Twitter.

However, the news this week that Google's marketshare in a key opportunity area - North America - is slipping rather than improving, suggests that we may be at the tipping point of Google's much predicted transition into another Microsoft or IBM: i.e. a slow growth technology behemoth which once drove the industry forward but subsequently lost key talent along with any ability to innovate, resulting in cautious product releases.

In search, the ability to innovate has always been key, and the slowly grown dominance of social is a real threat to the existing mechanics of search on which Google relies: it is a transition from context and relevancy to real world relationships and subjective value judgements, an area of advantage for those who hold the most data, which is, with 750 million users, clearly Facebook.

Any talk of a real threat to a company as huge - and as cash rich - as Google is of course nonsense, but to not reverse the trend of slipping marketshare would be a painful blog for Google's position as a leader in its field and the first real sign of stagnation in their underlying business.

That stagnation, of course, would have a dramatic long term effect on their business valuation and seriously hamper their ability to hire the very best and attempt to turn things around.