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How Google (GOOG) Would Benefit From Gmail, Search Integration

 August 11, 2012 02:00 PM
 

(By Mani) Google, Inc. (NASDAQ:GOOG) is linking its search engine and widely used Gmail service. The search giant is testing a new feature that would show relevant Gmail messages when a user searches for a particular information.

The upcoming improvements would generate more personalized search results for the users, who will now able to use the search platform for both Internet searches and email. For instance, if a user is planning trip to New York, then they might see relevant emails about the best hotels, or great places to eat on the right hand side of the results page.

"Sometimes the best answer to your question isn't available on the public web—it may be contained somewhere else, such as in your email. We think you shouldn't have to be your own mini-search engine to find the most useful information—it should just work," Amit Singhal, SVP Google Search, said in a blog post.

If these testing becomes successful, Google could witness an increase in revenue per search as the effort would augment more Internet searches in a PC, which in turn would be used to provide more targeted ads.

This assumes more significance as Google's search engine absolutely dominates the web search market with 66 percent share and handles two-thirds of all web queries on any given day.

California-based Google makes most of its money from keyword advertising that is shown based on the type of search a user conducts. Advertisers on Google bid for keywords to display their advertisements on the Google search page.

The pricing of keywords, the inventory of keywords available, and the frequency of user search impact how much money Google makes on search.

Moreover, the timing is perfect for the integration of Gmail and Google Search as web penetration increases across emerging markets and users are expected to increasingly become more familiar and comfortable with using web search as the flagship tool to look for information.

In addition, Google's web browser Chrome commands a bigger market share and putting a head-to-head competition with Microsoft's Internet Explorer. Since, Chrome waives the need to open a separate page to type search queries should increase web searches for every PC via Google.

However, Google should face privacy concerns by clubbing email information into general search results. For this reason, Google is showing Gmail results in a minimized format in the search page.


Rich
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