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Google’s Dominance of Internet Advertising and Search May Not Last Much Longer

Woman laying on her bed surfing the internet on her laptopThe internet has brought many formerly unknown conveniences to business owners, from ordering stock and supplies over the web to the efficient online bookkeeping and payroll services offered by PADGETT BUSINESS SERVICES®. Even more exciting for a small business, however, are the opportunities that the internet creates for connecting with potential customers.

Through search engines, online directories and internet advertising, small businesses are able to reach or be found by a targeted audience full of people who often are ready to buy. Compared to newspaper and television ads, online advertising and marketing can be much more affordable, and some small businesses have found themselves expanding into new markets for the first time in their existence.

For several years now, Google has been the giant of internet search and advertising. The company is so dominant that today it’s virtually the only game in town. With rivals Yahoo! and Bing getting only negligible slices of internet search traffic, Google is the place to launch and maintain an online marketing campaign, both for national companies and for small, local businesses.

History shows, however, that no company, no matter how big or dominant, is safe from the forces of competition if it can’t adapt. To re-purpose a popular phrase, even Google isn’t “too big to fail,” and some commentators think that the company could lose its vaunted position within a few short years because of changes sweeping the wired world.

Google’s stock price suffered a big drop last week when it released an unexpectedly poor third-quarter earnings report. There are various reasons why Google’s net income dropped by more than 20 percent compared to this time last year, but the company’s looming problem is the fall in the average price it can charge for “pay-per-click” (PPC) advertising. Companies that buy these ads pay Google each time an internet user clicks on them, and by and large advertisers are simply not willing to pay as much for ads that run on small-screened mobile devices such as smartphones, rather than on the larger screens of desktop and laptop computers.

The problem for Google is that use of mobile devices is growing at incredible rate. An ever-increasing share of internet traffic is going to these devices that, from an advertiser’s point of view, are less desirable platforms for drawing potential customers’ attention. Likewise, the search paradigm that worked for Google when it first started – having searchers type what they’re looking for into box, which is incredibly tiny on the screens of mobile devices – might not be so successful going forward. Another company could step in with a more viable search method and quickly erode Google’s position. Shortly after Google’s earnings report fiasco, a Christian Science Monitor postulated that voice search could be the wave of the future, and that a Google rival – Apple – is the best positioned to compete in that arena, with its Siri voice recognition system.

Even as the business world changes and evolves, at least one thing remains constant – the dedication of the professionals at PADGETT BUSINESS SERVICES® to the success of small businesses in North America. Since 1966, Padgett has helped its small business partners by taking care of the details while they focus on the important things. Today, we offer a full range of financial services for small business, including financial planning, consulting, bookkeeping, financial reporting, tax preparation and payroll processing. 

Do you have the support you need to manage your small business bookkeeping? Schedule a 30-minute appointment to speak with a local small business adviser.

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