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For a general search engine, no, there isn't. The upfront capital investment, in terms of the data center capacity necessary to make a modern scraping and sear
by stupidcar 10y ago
For a general search engine, no, there isn't.
The upfront capital investment, in terms of the data center capacity necessary to make a modern scraping and search infrastructure, is immense. And since the ad-word business model does not scale linearly with market share – e.g. the market leader collects a disproportionate share of the available profit – you will be losing additional money for a long time.
Since the market leader is good enough that it isn't possible to disrupt the market purely through result quality (as Google did), you will need to rely on bigger and more effective marketing spend. Not only will you have to outspend and outperform Google, but also Microsoft/Bing, who have tried to do the same thing for years, with only limited success.
Even if you have the funding necessary to do all of this, then you would be better off either buying shares in an existing search engine company, or starting a business in a different market, one with lower upfront costs and less dominant incumbents.
- dri_ft 10y ago> the ad-word business model does not scale linearly with market share – e.g. the market leader collects a disproportionate share of the available profit Why is this so?
- AznHisoka 10y agobecause it is a waste of time optimizing/setting up campaigns for such a miniscule return.
- always_good 10y agoBecause the market leader has all the publishers. If you have space for a single banner ad, you're going to use the network with the highest payout, which is the one with the most competitive bidders.
- dredmorbius 10y agoEssentially: network effects, efficiencies of scale, and costs of managing multiple small relationships (from the advertising buyer's PoV). Google's real monopoly at this point is ad-side.
- Animats 10y agoAlong with Facebook, yes. About 65% of online ad spend is to Google and Facebook.[1] The remainder is to a bunch of little guys, mostly selling to bottom-feeder sites. Except on mobile. Banner ads on mobile are growing. [1] http://fortune.com/2017/01/04/google-facebook-ad-industry/ http://fortune.com/2017/01/04/google-facebook-ad-industry/