“Google, which performs 23 million searches each day, has a
rabid following among computer geeks, who rave about its amazingly
accurate results and clean looks — uncluttered by banner ads. In
short order, the company has captured 25% of the search-engine
market, says consultancy Gartner Group. And it has some brawny
backers in Silicon Valley venture-capital notables Kleiner Perkins
Caufield & Byers and Sequoia Capital. That potent duo has
collectively bet $25 million on the still-private company.”
“But how will Google ever make money? There’s the rub. The
company’s adamant refusal to use banner or other graphical ads
eliminates what is the most lucrative income stream for rival
search engines. Although Google does have other revenue sources,
such as licensing and text-based advertisements, the privately held
company’s business remains limited compared with its
competitors’.”
“Northern Light (www.northernlight.com), which matches Google in
many search-engine competitions, sells archived articles from
hundreds of publications and builds intranet portals for companies.
AltaVista (www.altavista.com), another competitor, has integrated
its search engine into a broader portal strategy. “There isn’t
really good evidence, frankly, that companies focused purely on
search, as Google has been, can support themselves with that
model,” says Northern Light Chief Technology Officer Marc
Krellenstein.”