Indian Search Industry to experience stronger competition

Despite the search market in India being very small and amounting to less than $40 million in a year but the market is growing rapidly at about 33% yearly and so the Microsoft-Yahoo! deal is significant to India, Praveen Bhadada, engagement manager, Zinnov Management Consulting.

Speaking on the Microsoft-Yahoo! deal and its impact on India, Bhadada said, “Google is the dominant search engine in India and there are about 15 plus local search engines that have emerged in the last 2 years, for e.g. asklaila.com, justdial, guruji.com, mapmyindia.com, tolmolbol.com etc. covering niche areas. Unlike Baidu (search engine in China), they do not directly compete with the global giants such as Google, Yahoo or Microsoft.”

With presence of more than 35 million SMBs in India, and some of them relying heavily on search engine marketing to push their products across the globe, the

Microsoft-Yahoo partnerships can provide them a better second alternative, he said.
The rapid pace of broadband penetration in India will help both Google and Microsoft-Yahoo in the long run and help them gain larger share in markets such as India and China.

The deal will help both Microsoft and Yahoo! put a strong battle against Google, which currently enjoys more than 65% market share in the $25 billion plus global market for search engine marketing, said Bhadada.

In fact, Yahoo! globally accounts for close to 20% while Microsoft, with its new Bing search platform enjoys about 9% market share.

In the exclusive agreements, Microsoft will acquire a 10 year license to Yahoo’s core search technology and Bing will be the exclusive platform for all Yahoo! sites.

According to the official statement, Microsoft will compensate Yahoo! at an initial rate of 88% of search revenue generated on Yahoo!’s sites during the first 5 years of the agreement.

He said Microsoft will guarantee Yahoo!’s revenue per search in each country for the first 18 months following initial implementation in that country. “Complete integration may take anywhere between 18-24 months.”

The two will continue to compete in other common business areas such as email, web products, messaging etc.

However, dominance of Google may or may not be hampered, he said. Search major Google may be less worried with this agreement with Yahoo and Microsoft Google enjoys a big share in the market and the customer confidence is high on Google as compared to Yahoo and Microsoft. “Unless the actual number of searches increase for the user, this deal may not bring in any fruitful results for the two and the complete integration will only happen by 2011-2012 timeframe,” he said.

But some believe that the Bing platform for advertisers is relatively inferior to that of Yahoo and but alternatively, users will now have a stronger alternative that will provide them scale and if the combined search can provide users a better experience, then they may potentially eat up into Google’s share in the future.

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Guruji to take on Google, Yahoo in the search engines space

Guruji.com, Indian’s Internet search engine, focused on providing better search results to the Indian consumers is eyeing to emerge among the ‘Top 3’ search engines by 2011. The search engine major is presently growing at 20-30 percent per month and is eyeing one million searches in the future.

According to Internet and Mobile Association of India (IMAI), the search engine market in India is presently worth $50 million in 2007 and is expected to grow to $100-$200 in the next 5-6 years time. However, China is far ahead of India and has already touched the $100 million mark.

Anurag Dod, founder and CEO of Guruji says, “we want to emerge as a dominant player in the search engine space and for this we are leveraging on proprietary algorithms and content for the Indian consumers.”

Guruji.com was founded by Anurag Dod and Gaurav Mishra, two Indian Institute of Technology, Delhi graduates in 2006 by the backing of venture capitalists Sequoia Capital. “It is the first time that India is seeing a "desi" search engine,” he said.

As per the latest Commscope report, the English search engine market is dominated by basically by six players namely – Google, Yahoo, ASK, MSN, and Guruji among others. In fact, Aaidu.com, a search engine in Chinese and Daum and Naver are the dominant search players (Korea) and are more prominant than Yahoo, Google in these countries. So is Yandex in Russia. “We are now focusing on the Indian consumers and so have extensive searches on cricket, music, images, city focussed seaches like movie tickets,” says Dod.

Even though, we are catering to the English speaking market, still 80 percent of the traffic comes from India while the rest 20 percent is spread across US, Middle East, UK etc.Dod says Yahoo was initially a portal site and in December 2003, that bought Inktom followed by three more companies Overture, which has bought Alta vista followed by Fast. So Yahoo’s search engine is a combination of these three companies. MSN is mainly a portal site player and less of search engine, ASK acquired Teoma, while Google that has a 80 percent market share in the search engine space is the only pure search engine player.

We initially started with web search, city search in 2006 and moved to local laungages –Hindi, Tamil, Telugu, Malayalam in 2007. Later on we added cricket and music that has a large customer base in India. So will be offering live match scores updates and historic cricket database that is good for data mining, says Dod.

. “We are looking at raising funds but are presently adequately funded and will sail through this global recession.” Guruji secured an investment of $7 million from Sequoia Capital that is the same venture capitalist firm that initially funded Google as well.

The company claims that they remain unaffected by this global recession. “Our organization the attrition level is 0 percent for the past two years and will grow from the present employee strenght of 63 to 100 over the next 1.5 years. Besides we have also opened an office in Mumbai.”

The salaries we offer is very competitive to any product design company like Yahoo, Microsoft, Google, Sun, Cisco and much above service companies like TCS, Wipro and Infosys, Dod claims.

Earlier search engine companies like khoj.com focused on subscription based unlike Guruji that is focused on news, features, e-commerce, education, music, cricket, technology that are free.

Over the next few years, the company shall focus on entertainment, which is a big category besides music, images tickets by enhancing the capabilities. The company has invested majorly in the web crawlers software that was locally developed,” Dod adds.