Wednesday, January 04, 2006

Google & Yahoo Speak at Consumer Gadget Show

This week, the Consumer Electronics Show (CES) is being held in Las Vegas. The CES is where makers of consumer gadgets and home electronics showcase their latest products. So what are the heads of Google and Yahoo doing there?

CNET News reports that Larry Page (co-founder of Google) and Terry Semel (Yahoo CEO) will offer separate keynote addresses at the CES this week.

Google is still ahead of the pack when it comes to the search engine market with about a third of all searches. Yahoo follows at #2 with just under a quarter of all searches. MSN is #3 and Ask Jeeves is #4. AOL is in fifth place with a little more than 12% of all searches. Of course, the new agreement between Google and AOL may change this dynamic in the coming year.

CNET News speculates about the reason why Page and Semel are interested in the CES. "[A]s consumers increasingly access the Internet through devices other than the PC, it makes sense that the two companies should follow their customers onto those devices. The question, of course, is just how they plan to do it. They're already working on search technologies for video, television and music. It wouldn't be a stretch to drop that technology into some sort of device."

The article suggests that "it's highly unlikely that two companies that have found high-growth and big profits in Internet search will stray into the low-margin hardware business."

Instead of Google and Yahoo wandering into the hardware business, CNET postulates that it would make more sense for the Internet giants to partner with hardware companies to provide search engine functions. At a minimum, Page and Semel are expected to present arguments that their respective companies are best suited to provide search technology for televisions, PDAs and cell phones. It is not beyond the realm of reason that one or the other will announce such a partnership during the keynote address.

This line from CNET is worth repeating: "Make no doubt, the high-tech and consumer electronics industries are converging, and Semel and Page's presence at CES underscores that point."

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