Returning Results: Search Engines in the US Industry Market Research Report Now Available from IBISWorld

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The Search Engines industry has cemented itself as one of the most innovative businesses in the United States. Although most search engines are entirely dependent on advertising revenue, the industry emerged from the recession relatively unscathed. Search engines continue to pull revenue away from other advertising media due to the lower costs and quantifiable efficacy achieved through search engine marketing. Search engines will also garner strength from innovative technologies that allow advertisers to determine which terms, ads and websites are most effective. After experiencing substantial growth over the five years to 2012, revenue will remain stable in the next five years. The rising penetration of the internet and location-based services will support demand over the period. For these reasons, industry research firm IBISWorld has added a report on the Search Engines industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

With advertisers attracted by search marketing, firms will absorb spending from other media

The Search Engines industry has cemented itself as one of the most innovative businesses in the United States. Over the five years to 2012, industry revenue is expected to grow at an annualized rate of 3.4% to $17.4 billion. “Although most search engines are entirely dependent on advertising revenue, the industry emerged from the recession relatively unscathed,” says IBISWorld industry analyst Kevin Boyland, with revenue contracting only 3.0% in 2008. As consumer spending declined and advertising expenditures plummeted, advertisers scaled back their search engine marketing campaigns without completely cutting them. In 2012, the industry is expected to grow 2.4% as search engines continue to pull revenue away from other advertising media due to the lower costs and quantifiable efficacy achieved through search engine marketing.

Over the past five years, the market dominance of industry giant Google has prompted cooperative agreements between its next largest rivals, Yahoo and Microsoft. In 2009, the companies signed a 10-year agreement that replaced Yahoo's search and ad-serving technologies with Microsoft's. In exchange, Yahoo will receive 88.0% of the resulting ad revenue through 2015. According to Boyland, the agreement has largely tied Yahoo's success to that of Microsoft's search engine, Bing, and vastly expanded the amount of data that Microsoft has available to analyze and use to better the technology behind it. In fact, in 2012, Bing market share surpassed Yahoo for the first time. Competition in the industry is quickly evolving into a battle between technology giants Microsoft and Google. The Search Engines industry naturally tends towards higher levels of concentration. Concentration has increased steadily during the last five years, primarily driven by Google's growth and the decline of smaller search engines like Ask.com and AOL. A large user base attracts advertisers and provides a large data set that can be analyzed and used to improve search results. As the quality of search results improves, a search engine's user base tends to increase, creating a cycle that reinforces the dominance of large, well-established search engines. Consequently, IBISWorld expects industry concentration to remain high over the next five years.

Over the five years to 2017, advertisers are expected to increasingly turn to search engine marketing because of its cost effectiveness and accountability advantages over traditional media. With proper analytics software installed, marketers can track which terms, ads and websites are the most effective, allowing for incremental improvements in advertising campaigns. As mobile devices with broadband internet connections continue to proliferate throughout the United States, the scope of the industry is rapidly expanding. Although Google currently dominates the mobile search engine market, innovation from Microsoft could take away market share from Google in the future. For more information, visit IBISWorld’s Search Engines in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes enterprises that operate search engines and other types of search-based websites that display advertisements. These search engines typically provide search services for free and earn income when a user clicks on an advertising link, known as a "paid click." Websites may attract users to their search engines by offering a range of additional free services, such as e-mail, news, social networking, entertainment and other information.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
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Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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