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Home » » Google says Apple's Siri threatens search

Google says Apple's Siri threatens search


Google [GOOG] chairman Eric Schmidt has admitted his company may have bitten off more than it can chew in its war with Apple [AAPL], and is running scared of the serious search threat posed by Siri.

From the horse's mouth
I can already hear the Android fans argue against this claim, but it's not me who is saying this, but Google. "Apple has launched an entirely new approach to search technology with Siri, its voice-activated search and task-completion service built into the iPhone 4S," said Schmidt in a written submission to the Senate's antitrust subcommittee.
Schmidt is attempting to argue that Google's huge slice of the search market doesn't mean it dominates search. He sees Siri as a big threat, and argues that social networking services such as Twitter and Facebook also threaten the Googleplex.
Last month I argued that Siri opens a new front in Apple's battle with Google. I argued that Siri search and services will lower people's dependence on browser-based search.
At present, Apple's (beta) offering is unique -- no one else has something as capable as Siri at this time. Since my report, Forbes has even called Siri a "Google killer".
Paying close attention
This stuff matters. When the U.S. Senate Judiciary Committee  began asking Schmidt questions in September, Minnesota Democrat Al Franken  observed, "Google's unprecedented growth and success is... one of the reasons we need to pay attention to what you're doing. As you get bigger and bigger I wonder what that means for the next Larry Page or Sergey Brin who are building the next product."
It is interesting to see Schmidt tell the Senate that Apple now threatens Google's search business. "Google has many strong competitors," he said, though he declined to describe the company as dominant in search, and added the firm, "has none of the characteristics that I associate with market power."
Defining market power
I would argue that such characteristics could include:
  • Google owns 65.3 percent of the search market;
  • The company holds 43 percent of the smartphone OS market;
  • It retains 43.5 percent of the US online advertising market.
In my opinion,  a 65.3 percent share of the now mature search market is dominance. Unlike smartphones, search isn't an emerging market which furnishes the occasional statistical blip.
I'd observe that revenues raised from this commanding search engine/ads position are used to finance forays into other industries, including the Android OS. After all, who else could develop a mobile OS in-house and  give it away for nothing?
It is open to question how serious a threat Apple's beta Siri technology really is to the Google empire. However, I expect it -- and other future Apple technologies, including Maps, will take a chunk out of its former ally. And Schmidt seems to agree.
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