Google’s domination of desktop search is unquestioned. But in mobile, Google has run into an unexpected competitor: “there’s an app for that." It turns out that Apple’s bounty of iOS apps is a substitute for search.
Google finds itself in a conflicted position. On the one hand, it must cultivate an app ecosystem for Android or else Apple will run away with the smartphone market. On the other hand, apps cut into search volume, so Google is cannibalizing what was its primary reason for building Android in the first place, mobile search. In the long term, Google must be rooting for the mobile web to replace apps.
Many like to frame the competition between the mobile web and device-native mobile apps as a clash between “open” and “closed.” Ironically, there’s a role reversal back on the desktop. Through the Panda algorithm updates, Google has been steadily tilting its search algorithm towards brands. Presumably this is because consumers want brands and/or brands offer consumers superior experiences. While this seems quite reasonable, it belies the logic supporting search and the open web (mobile or desktop) and the common criticism of Apple and the closed approach.
Open vs. closed isn’t always an either/or proposition. It seems that app stores and search are on a path of convergence, towards a meld of curation and algorithm.
Horizon Partners is a boutique financial advisory firm serving companies in digital media, software, and related growth sectors. Horizon provides advisory services to help companies raise capital and execute mergers and acquisitions.