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Get Four
|  | JUNE 11, 2004
 SPECIAL REPORT By Scott Kessler Search Users Weigh In on Google An S&P survey finds that while the leader clearly has a loyal following, many users would switch if something better comes along In anticipation of an IPO announcement by Internet search giant Google, we at Standard & Poor's Equity Research Services wanted to have a better understanding of how search engines are used -- and perceived -- by the Internet population (see BW Online, 6/11/04, "Putting a Value on Google"). That's what motivated us to commission from market research outfit InsightExpress a proprietary online survey, which was conducted during the second week in April, 2004. (This article is an excerpt from the full report. Subscibers to Standard & Poor's Advisor Insight can get the full versions of the Google Pre-IPO Report and Search Engine survey in .pdf format; Adobe Acrobat is required. Full .pdf versions of those reports can also be purchased directly at http://sandp.ecnext.com/ipo). The survey was completed by 1,000 respondents nationwide, a sample consisting of respondents from all age groups (18+) and household income levels.(The margin of error is approximately 3%, plus or minus.) GENERALLY SATISFIED. What did we learn? The survey's results confirm Google's significant leadership in the search-engine arena. Google dominates the minds and desktops of Internet users. Yahoo! (YHOO ) is a distant second. However, we were surprised that a large proportion (over half) of users call on multiple search engines, although the perception that not all search engines are the same is widespread (see BW Online, 6/11/04, "Google: What Lies Beyond Search?"). Consumers are generally satisfied with their search engine of choice. They seem to be quite loyal and are somewhat reluctant to switch -- unless a better product comes along. The results of this survey indicate that "search-engine inertia" is quite pervasive -- a vast majority is likely to use the same search engine over the next year. Most of the respondents said they don't pay much attention to advertisements that accompany search-engine results. Interest in free e-mail services with targeted advertising is also unlikely to be a hit among consumers. PREDOMINANT POSITION. Now for some greater detail on the survey results. The poll found that search-engine usage varies widely. Almost half (49%) use search engines from 1 to 10 times per week, while just over one-third (35%) turn to them more than 10 times per week. The remainder (16%) don't use search engines. Approximately two-thirds use a search engine to find information about products and services, to locate Web pages. Nine in 10 said their use of search engines has either increased (42%) or remained the same (48%) over the past year. Google occupies a predominant position among users, enjoying the highest top-of-mind awareness. When asked to recall search engine names, half the survey sample (50%) mentioned Google first, followed by Yahoo (24%) and MSN (6%).
Search Engine Used Most Overall...
Consistent with industry data, Google is the most widely used search engine among the survey population, followed by Yahoo, MSN, and AOL. Almost half the respondents (48%), said they use Google most overall, followed by Yahoo (20%), MSN (14%), and AOL (7%). Heavy users of search engines -- whom we define as those who use search more than 10 times a week -- are even more likely to use Google most overall (57%).
The primary reason for using a particular search engine is the relevance and accuracy of results. This is especially true for heavy users. One-quarter use their search engine of choice because of the relevance or accuracy of its search results. Another 25% because it's their home page or is on their home page. Those using the AOL and MSN search engines the most (14% and 8%, respectively) do so largely because it's their home page or it is on their home page. Other top reasons for why a particular search engine is used are simplicity of layout, speed, and habit. Search engine user satisfaction is quite high. A large majority (83%) is extremely pleased with the service they use. This is particularly true for those who use Google the most. Two-thirds of consumers have been using their search engine of choice for more than two years, and even longer for heavy users. Use of multiple search engines is quite common. A little more than half of the online population (56%) generally use more than one search engine. Light users -- those using search engines 10 times a week or less. -- are less likely to use more than one search engine.
Likelihood of Continuing to Use Current Search Engine of Choice...
Until a better search service comes along, many consumers expect to continue using the same search engine. Over the next year, more than 80% of consumers expect to keep using their current search engine of choice. Four in 10 said they would switch if they became aware of a search engine that better suits their needs.
Using a scale of 0 to 10, with 0 being not at all likely and 10 being extremely likely, please tell us how likely you are to continue using [current search engine of choice] as your primary search engine over the next year?
Generally, users have strong opinions about search engines. More than 8 in 10 consumers think search engines aren't all the same -- some are better than others. Three quarters generally don't pay much attention to advertisements that accompany search engine results. Less than half (42%) think Google is by far the best search engine now available. Consumer reaction to potential e-mail offerings from search engine companies is mixed. Four in 10 respondents would be very likely (17%) or somewhat likely (24%) to sign up for and regularly use a new personal e-mail service if it offered unlimited storage and the capability to search old e-mails. Just over 2 in 10 respondents would be very likely (8%) or somewhat likely (15%) to sign up for and regularly use a new personal e-mail service if it offered unlimited storage and the capability to search old e-mails, and would search your e-mails to target advertising to you. Just 14% said they would provide their e-mail address in order to receive automated search results updated daily or weekly.
Favorite Internet Company...
Search engine toolbars have yet to become standard. Almost two-thirds (63%) do not use one. Those who use the AOL search engine most overall are more likely to use a search engine toolbar (51%).
There's no stand-out when it comes to a favorite Internet company. Just over one-third (35%) have no opinion on the subject. Yahoo is mentioned most (18%) as being a favorite Net outfit, followed by AOL (12%) and Google (9%). Note: Scott Kessler is a Standard & Poor's Equity Analyst. He has no affiliation with any company discussed in this article. He has no ownership interest in any company discussed in the article. Regarding Microsoft (MSFT ), Time Warner (TWX ), and Yahoo (YHOO ), affiliates of Standard & Poor's Securities Inc. received noninvestment-banking compensation from each of these companies during the past 12 months.  Analyst Kessler follows Internet software and services stocks for Standard & Poor's Equity Research Services Val Srinivas, PhD., director of market research, and David Bilgoray, market research manager for Standard & Poor's, contributed to this report All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
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