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Google Faces Stiffer Competition From Portals Than Search Engines

Staff Writer
Published: 2004-08-24

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Analysis by ACSI E-Business Sponsor ForeSee Results Says Google Faces Stiffer Competition From Portals Than Search Engines, News & Information Sites Fail to Establish Personality or Loyalty.

Americans' satisfaction with search engines, portals and online news and information sites is edging upward, according to the annual e-business update of the American Customer Satisfaction Index (ACSI). Search remains the clear standard-setter among the three e-business sub-categories measured with an aggregate score of 80 on the 100-point ACSI scale, with portals (71) and news/information sites (75) lagging well behind.

The overall e-business category score increased to 72.5 from 71.4, still behind the Index's cross-industry average of 74.4. The category level of success in satisfying users is below average, not only compared to the ACSI aggregate, but to the ACSI e-commerce score of 80.8. The ACSI is produced by the University of Michigan, in partnership with American Society for Quality and CFI Group. ForeSee Results, an online satisfaction measurement firm, is the ACSI's e-business sponsor.

Google is by far dominant in the search engine category, with a strong score of 82, holding steady from last year despite the potential strain of brand extensions and other changes. While Ask Jeeves has increased its score by a remarkable 14.5 percent in the past three years, at 71 it is still a very distant second.

Google's real competition may be coming from the portal category: Yahoo!, which earned a 78, and MSN with a 75 have significantly higher satisfaction scores than the closest search engine competitors, and both are focusing on improving search within their websites. Today's release includes a special analysis by ACSI e-business sponsor ForeSee Results, which indicated that the lines between search engines and portals are blurring with each sub-category competing by increasingly taking on characteristics of the other.

"Google is a star performer in the search field, but other search engines are not its only competition," said online satisfaction expert and ForeSee Results CEO Larry Freed. "Google and other search engines likely face future competition for retail-driven search from companies like Amazon, an absolute customer satisfaction machine. It's not always easy to keep people with you while you extend your brand. That Google has been able to do so is a testament to the brand's value though they have bigger hurdles ahead.

"As the web expands, the job for search gets tougher," said Freed. "The issue is not how many matches the search engine found for me in 2.4 seconds. The issue is whether you can prioritize those matches. That is a big challenge. People have become comfortable with sponsored links, technology is better, and valuable content to connect people to businesses continues to grow--that's the good news. Patience with two million matches may run out, that's the bad news."

ForeSee Results' ACSI analysis revealed that the search-engine category registers high loyalty from users, 15 percent higher than for portals or news and information sites. News and information sites' loyalty levels, by contrast, are low--and their scores indicate a below-average ability to deliver a satisfying experience to customers.

News and information sites' scores have changed little during the three years in which they have been measured. This year, the category scored 75, up a point from last year, and the sites included ended up roughly equal--with ABC, CNN, and MSNBC all earning 74, and NYTimes and USA Today tied at 72.

"These sites have no personality and no real differentiation," said Freed. "Loyalty to news sites is relatively low for the category compared to search engines. They're doing next to nothing to give users a preference."

"AOL is back from the dead, and that is the striking thing among portals," said Freed. "It seems AOL's content-heavy approach and partnerships have real appeal." He cited their improvement from a dismal 56 five years ago to their latest score of 67--still well behind rivals but a remarkable improvement. Yet AOL's performance trails category leader Yahoo! by a substantial margin.

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