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BusinessWeek: Will Google's Purity Pay Off?

Dec 13, 2000, 01:17 (6 Talkback[s])
(Other stories by Kalpana Mohan)

"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."

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