Google’s Achilles Heel


Written by Sramana Mitra

Does Google not, like everyone else, have an Achilles heel?

Before I attempt to answer that question, let me just say right up front that when it comes to this topic, I am highly biased. I want Google to have competition.

Biased or not, however, I have found a few vulnerabilities in Google’s relentless march to success. The most significant of those is the increasing verticalization of the web. Or more specifically, in the rise of vertical search engines.

Here’s an example.

You are looking for a software engineer job in Palo Alto, Calif. If you insert this query into Google, you will mostly turn up offers to take you to job boards and job search engines like SimplyHired, Dice, and others that are matched based on keywords.

Google, however, doesn’t know that you would consider jobs within a 25-mile radius — that nearby Menlo Park, Redwood City and Mountain View fall within your realm of possibilities as well.

Now try this query on, a job search engine that collects listings from all over the web. You can specify the radius of your search. The engine would offer to filter by company, city, job type, etc. making your job search experience richer, more precise.

Similar dynamics exist in other major verticals — travel, real estate, auto, health, etc.

Google has so far stayed focused on horizontal, generic search with a simple, one-bar user interface. And it has brought them a remarkably long way.

However, as users get more sophisticated, they are discovering brands that offer richer user experiences customized to the dynamics of the vertical.

Investors have poured a lot of money into these vertical search engines. Within the “jobs” category alone, more than $70 million has been funneled into Indeed ($5 million from Union Square Ventures & NYT), SimpyHired ($17.7 million from Foundation Capital and News Corp.), and Jobster ($48 million from Trinity, Mayfield, Ignition, Reed Elsevier). And the “online jobs” market is expected to be worth $10 billion by 2011, which explains why so much money is chasing it. has over five million unique users, indicating that the dynamics of the entry point to the web are changing. A recent roll-up deal led by Kayak in the travel vertical, which I discussed in my Forbes column, highlights the ambitions of newer players to build independent large companies. Kayak acquired SideStep, bringing together over 12 million unique visitors and $85 million in revenues.

So what is likely to be Google’s response? Build? Buy? Abstain?

According to VC Gus Tai over at Trinity Ventures, “Google will fail if they try to do separate vertical brands,” he said. “It’s like Wal-Mart vs. Tiffany. It’s about a deeper brand experience that Google can never offer.” Gus knows. He was on the board of Blue Nile, an online diamond jewelry brand that took on Amazon and eBay and built a business worth more than $300 million a year.

Conceivably, the verticalization we saw in e-commerce will now get repeated in search. Google will, of course, remain a very large search engine company with a huge market cap. But other $500 million-$1 billion businesses will get built in each of the large verticals and will, within just five to seven years, give Google a run for its money.

I explored the “deeper” brand experience with Gautam Godhwani, CEO of SimplyHired. “We are focused on enriching the entire lifecycle of the user experience,” Godhwani said. “We not only want to help candidates search for jobs, but do an outstanding job in understanding the content of the resume and be able to match it with the right opportunities.”

Imagine a day when you have your resume posted on SimplyHired, and even when you are not looking for a job, highly relevant opportunities are presented to you by your Careerbot. “We are only 10-to-15 percent along the way to our vision,” Godhwani said. SimplyHired powers job search for over 3,000 sites, including MySpace and GigaOM.

Indeed’s CEO Paul Forster likes the idea of a roll-up in the jobs category, but said no concrete discussions have yet taken place. I offered both Gautam and Forster the idea of LinkedIn as an interesting possibility around which to roll up the category. (LinkedIn has already built critical mass with a 2008 projected annual revenue of $100 million.)

At the back of my mind is a vision that is much bigger than vertical search. It is Web 3.0, a summation of context, community, commerce, content, vertical search and personalization.

In the end, new brands able to build deep, rich, highly personalized Web 3.0 user experiences would become Google’s real competition.

I am eagerly waiting for these brands to emerge.


Saad Fazil

In Q1 2009, Google’s revenue was as follows:

(99% from ads)
1.6B Network
~100m licensing

Following are the top Google properties:

1 134M
2 51M
3 48M
4 32M
5 14M
6 13M
7 12M
8 8M

Total monthly unique users ~ 500M

Google Books makes money from ads just as most other Google properties do.

If we were to make a very rough guess from the traffic numbers above =>

Google Books ~ 2% of 3.7B = 74M

Note that I have assumed that eCPM of all Google properties is the same.. a highly inaccurate assumption. However, since Google Books is a “vertical”, we should expect its CPM to be higher than other Google properties. So 74M a quarter (or $300m) seems like a conservative estimate.

Now let’s take Kayak – top travel search engine.

Kayak’s monthly unique users = ~6mm

Annual revenue ~ $150mm
~50% comes from ads.. => $75mm

Two conclusions from the numbers above.

(i) Apparently Google is doing pretty OK on its own. Google Books being an average product at best is getting higher CPM than Kayak, a specialist in travel search.

If Google buys Kayak, it could actually drive up their CPM?

(ii) Online jobs market was ~6B in 2007 ( ) . But most of the pie is coming from subscriptions etc. and not just from ads. So even if Google were to enter a vertical, it would be taking only part of the slice as its expertise is really in search and advertising and not transaction handling.. of course unless it changes it focus.


Coexistence of vertical and horizontal search is fully sustainable on the long term. I hardly believe people would one day cease to use generalist Search Engines like Google to adopt a Vertical Search Engine (VSE) for each one of their daily search purposes (jobs,cooking,music).
People will always keep on using booth and the best.

Horizontal SEs will always have one leap ahead as they remain the main jump points to any VSEs. Even if share of useful VSE propositions will continue to rise, their usage is doomed to be in most cases occasional. Financially, VSEs revenue models are very precarious until critical mass is reachable while Google on the other hand is becoming more and more context sensitive,vertical and profitable.

Ultimately, no VSE could ever pose a serious threat to Google simply because if this was the case Google would diligently buy this contender right way. Missing the opportunity to be powered by Google innovation and financial engine is an offer no VSE could ever refuse!

Surinder Puri

Too much sensational reporting/blogging… If I take the thought to its logical conclusion then simple picture appears… If these vertical searches are successful in the future then there is a good chance they’ll be bought by google. Author likes to sensationalize just about everything without grasping deeper understandings of such issues. We’ve all heard before how IBM was supposed to be dead becuase Microsoft was on the rise. How Microsoft was supposed to bite the dust becuase google ruled the internet etc. etc. They all missed one key detail – CASH. These companies had/have more cash sitting on their balance sheets than many countries. IBM is fine (btw, they are second largest software company in the world, or is it third, annual software revenues app. $18 Billion), they are still selling a lot of mainframes though, Microsoft is doing well, and Google will continue to do well for a very long time to come. What is likely to happen is emergence of a new technology beyond search on the internet, that we haven’t thought of yet…

Google Tutor

great post, but I can’t help but think Google can knock off a lot of these players with a ‘good enough’ automated solution to many of these verticals.


Of all the companies, only is worth mentioning.Jobster will make its way to the deadpool soon. I also ran into an interesting site the other day- Odinjobs( They claim to be even more specialized for IT jobs. Interesting about them is their match engine that reverse matches your resume to all the jobs based on content.

Akshay Jain

While on the face of it the assumption looks proper however I tend to disagee with it

  1. Money would constantly keep on pouring in these vertical search engines but then there would be so many of them and I ofcourse don’t know which one to go to for what. Maybe I would even look for that information on Google

  2. It is quite naive to assume that Google is not doing something in this direction as well !!

  3. With a whole lot of suites and apps that GOogle is bringing affecting our day-to-day lives I wonder how anyone would be able to escape them. I mean I use Windows as my OS and all the other things online seems to be google from Gmail to iGoogle to Notebook. Why do I need to go and signup at various places, remember various usernames etc.

I really feel Google will be even bigger in time to come. Internet has only started penetrating to developing and under-developed countries and Google would be the #1 place where every Internet User Goes to. There apps are very simple to use and works great !!


ahem… check your facts – I went straight to , switched to “find businesses”, typed “software engineering jobs” in left field, and “Palo-Alto, California” in right (location) field, and clicked on search. Guess what I got…


The revenue made in the online recruitment market will shift from the job posting/advertising model as job postings become more of a commodity to charging a lot more to access a resume/candidate (active or passive) database.


I can see there are some none-believers comments (like Gregory above).
Users are finding destination sites and foregoing Google.

People used to use Google for simple navigation of the web, now they use it for more eclectic searches.

I posted on this topic last week and have a few graphs to show Google’s growth slowing and verticals growing. There is a relationship that started happening in early 2006.


that is no achille’s heel, it is just the flow of innovation through time

used to be five bottled water choices at the market, now there are fifty, same with tea or salsa, and that says NOTHING about the original brands

your post has no substance

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