Feature Article

January 09, 2013

The Mobile Revolution Rapidly Changes Search Behavior

Last week, the mobile revolution played a key role in Federal Trade Commission’s (FTC) decision to close its antitrust investigation of Google without charges. In this decision, the FTC agreed with Google that the speed of change in the technology made it impossible for regulators to impose restrictions without stalling future innovations.

A NYT report indicates that the rapid changes in technology have significantly impacted the consumer behavior. Consumers have slowly drifted from desktop computers to mobile devices. As people adopt mobile devices, existing technology companies’ business models are being overturned and new companies are emerging.

University of Iowa antitrust law professor Herbert Hovenkamp, told the NYT, “This is a market in which new competitors come in a week’s time.” Hovenkamp has been a paid adviser to Google.

In fact, as per the NYT report, the FTC started investigating Google’s dominance in the search business prior to the introduction of Siri in iPhones. Also, Apple did not offer any mapping service and Yelp’s mobile apps had no ads when the investigation started. The competition for Google in mobile ads was insignificant.

 “By the time the inquiry concluded, all of that had changed,” wrote Miller in an NYT article. The report shows that new competitors emerged from all sides in a short period of time, making a dent in the mobile search and advertising business and taking away Google’s dominant position.

Despite new competition, Google continues to grab a big percentage of the world’s mobile search market. In fact, media reports suggest that Google search is more popular on mobile phones than it was on desktop computers.

Market watcher StatCounter’s report indicates that Google accounts for some 96 percent of the world’s mobile search market. eMarketer’s study shows that the search engine giant gets about 57 percent of mobile ad revenue in the United States, and its nearest competitor Facebook gets just nine percent.

But, the market watchers warn that peoples’ search habits on mobile devices are changing rapidly. If people start bypassing Google and go straight to Yelp’s mobile apps, Google dominance could fade in the future, warned Miller.

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