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Porter's 5 Point Analysis on Web Search Engines

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Submitted By Skag55
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Competition from Substitutes: High * Google may have a competitive advantage over the rest of the search engines, however being so easy to select a different search engine and with Microsoft trying to forward its own product through its operating system, might change the figures in the future.
Threat of Entry: Medium-high * New search providers might concentrate on localized search and succeed into getting a niche in that area, however when it comes to global search there is a high entry barrier due to the large scale of information and infrastructure already acquired by the biggest companies.
Rivalry between Established Competitors: Medium * Currently the four biggest search engines are Google, Microsoft’s Bing, Yahoo, and AOL. However, Google has the largest piece of the market and seems to be ahead of the others with Bing being on the rise and the rest three very close to each other. Smaller ones such as Altavista, Lycos and Excite do not seem to pose a direct threat to any of the biggest four.
Bargaining Power of Buyers: Low * Advertisers recognize that the biggest providers together concentrate the largest number of searches, around 95% of the total. Therefore there is no room for negotiating advertisement prices. Also, even if a few users change search engine, it is unlikely to have any effect.
Bargaining power of Suppliers: Low * The essence behind the search engines is their computer infrastructure. The biggest companies have such wealth that they can keep acquiring as much infrastructure as they want.
Sources http://valuationacademy.com/porters-five-forces-in-action-sample-analysis-of-coca-cola/ http://www.smartinsights.com/marketing-planning/marketing-models/use-porters-5-forces/ http://searchengineland.com/market-share-bing-continues-small-gains-yahoo-stabilized-google-flat-162915
Competition from Substitutes: High *…...

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