Top search stories - November 2007

By Greenlight | 09 Nov 2007

After much speculation in recent weeks about the launch of the 'Google Phone', search giant Google has now unveiled its plans for the mobile space and it goes far beyond a simple handset. In a far more ambitious bid to realise the potential of mobile, Google, along with more than 30 of the world's biggest tech and mobile companies, including HTC (a handset maker), Motorola, T-Mobile and LG, has formed the Open Handset Alliance. The group plans to develop a single open platform for mobile devices named Android, which will bring multimedia applications, browsing and telephony services to the 3 billion strong global mobile community. Crucially for Google, Android presents multiple advertising opportunities enabling the company to continue its current rate of growth and move beyond its reliance on PC driven internet; after all, there are more mobile phones than internet users in the world. Android-based phones are expected to go on sale in the second half of 2008.

Meanwhile, etailers are getting ready for the seasonal rush. With online shopping growing 20 times faster than offline, it's no surprise that Christmas 2007 will see a massive rise in online shopping compared with last year. Despite higher interest rates and recent credit restrictions, the Interactive Media in Retail Group (IMRG) says that online spending for Q4 2007 will pass £15bn. This will be largely driven by the growing number of retailers offering pre-Christmas delivery guarantees and the growth in the number of retailer sites becoming transactional.  Findings from a ComScore research study also back this up; according to the measurement group, UK etailers generated 23% more visits to their secure web pages in the third week of November, compared to the whole of October.  This trend is expected Europe-wide as ComScore also forecast that 36% of Europeans will spend more on Christmas shopping online than they did last year. The role of search in this trend is significant as many users researching Christmas gifts and wish lists online are now being driven to e-commerce sites through increasing numbers of targeted ads and more aggressive natural search campaigns on the part of etailers.

Google's proposed acquisition of DoubleClick has come under closer scrutiny as the EU announced an extended review of the merger. EU executive body, the European Commission has expressed concerns that the combined influence that these two online powerhouses would hold may go against competition law. In theory the entire deal is at stake since the Commission has the right to veto the merger and prevent any kind of deal taking place. However, it is unlikely that this will be the outcome according to experts who expect modifications to the existing terms of the deal will be required. Google CEO Eric Schmidt said the company was "disappointed" but will continue its work with the Commission to prove that the merger "will benefit publishers, advertisers, and consumers."  The European Commission's Competition Unit will conduct an in-depth second-phase review, following its initial market review which raised the initial concerns. The Commission has a deadline of 2 April 2008 by which time it must decide whether or not the deal can go through.

It seems Google's not the only one taking big steps in the mobile world this month. AOL UK has launched its new mobile portal, which delivers internet pages to phones. The portal gives users access to the main products from AOL's online site including search, content channels and email. The search facility will retrieve web pages straight from the internet in a transcoded form for mobile. AOL claims that this technology has been tested on thousands of websites. The launch follows the revamp of AOL's US mobile service where the mobile search capability also now returns paid listings as well as natural ones.  In the UK, however, the search results shown do not yet include paid listings although the platform will display banner adverts. Auction site Ebay is the first confirmed advertiser for this service.

Maurice Levy, Chairman and Chief Executive of Publicis, has predicted that Web 2.0 will crash. Speaking at Monaco Media Forum earlier this month, Levy warned that there is not enough online ad spend to support the new media market. He claims we may be heading towards another dotcom bust after recent boom years which have seen several Web 2.0 success stories hit the headlines - YouTube, Facebook and MySpace among the most talked about. Levy voiced concerns that although the various social media sites offer massive audiences and vast amounts of data on members, there simply is not enough budgets for each and every social media platform to bring in healthy ad revenue. He went on to say that over optimism is being created by the high valuations of online businesses which could lead to a similar situation as experienced by the online sector in 1999 - 2000. Despite these comments Levy said that online advertising would continue to rise even in the face of an economic downturn. This view echoes those of Barry Diller, head of US based digital company InterActiveCorp, who labeled Microsoft's $15bn valuation of Facebook as a "False valuation".