Google Under Fire: Four Ways Search Giant is Vulnerable

Google stock is soaring back toward $500 — double from a year ago — even though it faces new resistance and competition in online media, advertising and tech. While it remains the dominant search engine with nearly 60 percent global market share, Google is confronted by growing risks elsewhere. The concern is not one giant rival , but many chipping away on all sides of Google’s existing and emerging businesses.  Here’s a glimpse:

• Google is still struggling to win over advertising-dependent publishers. There is resistance to Google’s DoubleClick Ad Exchange, a real-time auction for Internet display ads promising to boost publishers’ online revenues. Google’s Checkout micropayment platform offers a way to charge for online content (not unlike the new rival Journalism Online turnkey service). Google is offering a rare  ad revenue sharing arrangement for its new Fast Flip, an online news hub that provides magazine-styled story browsing online. Such initiatives are designed to win over publishers who begrudge Google and other aggregators retaining most of the ad revenues generated by search links to their content. Google failed with Print Ads, which sold advertising for paper and ink publications, but continues with AdSense, which links search queries to relevant text ads. Speculation persists that Google may seek to strengthen its hand by acquiring its global partner, Salesforce.com , which provides key internal support to Google’s new Wave as well as to  Cisco and social network Facebook and Twitter.
• Google’s Gmail is under attack.  As if its recent email disruptions weren’t enough of a concern, IBM’s new LotusLive iNotes is going after Google Apps Premiere with cloud email, calendar and contact management for a less expensive annual subscription aimed at business users. The new IBM cloud service is capitalizing on enterprise users’ concerns about email safety and privacy on wireless remote devices. LotusLive iNotes avoids spam and intermingling with consumer email accounts.  ”There’s no question that Google may be vulnerable following well-publicized Gmail outages. And large enterprises may think twice about Google, observes ZDNet Editor in Chief Larry Dignan. ” IBM says ‘there is zero tolerance in the big leagues for frequent outages or doubt about the sanctity of business data.’”
• Google is going to the mat over freer access to wireless networks. Google has been joined by Amazon, InterActiveCorp., EchoStar and the Open Internet Coalition to fight telecommunications firms for wireless turf and better open-access rules. Billed as “the mother of all political battles,” Google is seeking to crack open the nation’s $200 billion wireless network to assure the likes of Verizon and AT&T cannot block universal access to entertainment, communications and information across all digital platforms and devices. Both sides are lobbying hard in Washington on for their preferred net neutrality rule revisions, which could include radical change in how telecommunications players provide high-speed Internet access and device applications. Google and its allies  stand to lose plenty if net neutrality regulation fails to go their way.
• Google’s search rivals are cropping up everywhere. It isn’t just Microsoft’s Bing or IAC’s Ask.com. Wolfram Alpha provides a more academically focused search engine, while Facebook (with 300 million monthly visitors) and Twitter (with 55 million monthly visitors) are in the process of developing branded search tools unique to their social network users. One of the biggest looming opportunities is video search, although Google has yet to make much strides with its YouTube streaming video platform. Google needs to accomplish with video search what it has in its core search business: matching advertising to its results. As search becomes more refined, Google is working to stay ahead of competition and to prevent its bulk word search from going the way of former Internet portal giants like AOL and Yahoo. Google increasingly is making applications part of the mix as another way users can organize and make sense of information, according to CEO Eric Schmidt.

With its advertising-dependent revenues taking a mighty hit from the recession — up only three percent in the second quarter from 31percent growth rate in 2008 — Google is a maturing Internet behemoth seeking a second act. In his forthcoming book, Googled: The End Of The World As We Know It, Ken Auletta contends that still could mean becoming a $100 billion media company — of all advertising-supported mobile, online, TV and print — a bold promise Schmidt made back in 2007. By the looks of things, there will be no shortage of rivals.