When most people talk about what business the iPad is going to destroy, they focus on Microsoft’s Windows monopoly.You never hear Google mentioned, which is odd, because it could end up losing out on a lot more if the iPad takes over the world, according to two Wall Street analysts.
Ben Schachter of Macquarie released a research note on Friday arguing that the rise of the iPad is a long term threat to Google. It’s not because he thinks Apple is going to create its own search engine. And it’s not because he thinks Apple will stop making Google the default search engine in mobile Safari.
He writes, “we think that Apple will continue to push alternative sources such as it has done with Siri and work to deemphasize Google whenever possible.”
Schachter’s not the only one who thinks Google could be in trouble.
Anthony DiClemente of Barclays writes, “Siri could potentially threaten Google longer term by diverting search traffic.” (DiClemente also put out a note on Friday.)
Here’s more from DiClemente:
Why could Siri be a threat to Google? Siri is not a search technology; however when paired with services such as Wolfram Alpha and Yelp, it can circumvent traditional search engines and provide the user with answers that may have originally required a search. Because Siri is a non-visual medium, it does not provide the ability to present users with clickable ad links, an area where GOOG derives most of its revenues. Performics estimates mobile could account for 20% of all paid search over the next 6 months, and Google has said 2/3rds of all mobile searches are on Apple iOS devices.
It’s possible DiClemente and Schacter are overestimating the power of Siri. We’re still sceptical that people want to talk to their computers instead of type. And, for some mystery reason, Apple didn’t include Siri in the new iPad.
But, it seems safe to assume that Apple isn’t throwing in the towel on Siri. The company seems to think it has discovered the next wave of computer interfaces and it will continue to improve Siri over the long stretch.
If Siri does disrupt traditional search then Google will have a problem.
Unlike Microsoft, which is pretty well diversified, Google gets the vast majority of its revenue from search advertising. Anything that threatens search is a big problem for Google.
Even if Siri doesn’t take off, Google still could be damaged by the rise of the iPad.
People don’t use iPads like they use PCs. Apple emphasises native applications over the web. More time spent in the Yelp application, means less time spent on the web searching for restaurants. More time spent in Amazon’s application means less time searching the web for products to buy, which is how Google makes money.
It’s going to take a lot of pieces falling into place for Google’s lucrative search business to fall apart. But, the more successful the iPad becomes, the greater the long term threat.
No wonder Google is buying Motorola. It’s got to do something to stop the iPad.
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