Competition In Search Engine Market

Abstract

Google has been very successful in becoming the dominant search engine platform
in the US and Western countries. In contrast to its success in the US and Western
countries, Google does not have much luck in some Asian countries such as China
and Korea. Google is far behind in terms of search market share in China and Korea.
In this paper, we model the search engine market as a two-sided markets model and
analyze the industry structure and competition of the search engine market. First, we
present a mathematical model for a general search engine two-sided market. Then we
use the model to analyze the search engine history and explain why multiple search
engines could co-exist in the early days of the search engine history. We also explain
how Google, a latecomer in the search market, could become the leading search engine,
and how Google has strengthened its leading position. Next we apply the model
to China and Korea’s search markets and analyze how Google could lose the game to
local search companies. In the end, we propose some strategies on how search engine
market leaders could maintain and strengthen their leading positions.