Search Engines in the UK - Industry Market Research Report

The search engines industry in the United Kingdom is the perfect example of a concentrated market structure, with just three companies controlling in excess of 90% of the market. Their success is based on the ability to search more efficiently and accurately than any competing search engine, which attracts more users. Search engines that are preferred by the market have a larger user base, which attracts advertisers that want to maximise exposure of the products they market. Given that some 95% of industry revenue is generated from advertising and paid clicks, it is evident why the likes of Google, Yahoo and Microsoft dominate the market.

With the internet becoming an increasingly popular way of advertising and greater internet connectivity around the globe, the industry has grown over the past five years. More internet users and the ability to more directly reach target consumer markets have meant that industry revenue has grown as online advertising has become more prominent. Although the financial crisis had caused many corporations to cut back their advertising budgets, the industry continued to grow, albeit at a slower pace. Over the five years through 2012-13, the industry is expected to grow at an annualised 3.4%. In 2012-13, however, revenue is expected to contract by 2.7% to £358.5 million.

The long-term outlook is expected to hold a very new, very different structure for the industry, integrating with all sorts of music and video content that will be delivered straight to the lounge room. However, revenue is forecast to grow by only 3.0% per annum over the coming five years, to reach £415.9 million in 2017-18. This will occur as many of the emerging markets, or the direction the industry appears to be taking, are still in a stage of infancy. More and more of the advertising budget is being devoted to online ads; however, until search engines and other portals have better established and segmented themselves, the big three players will continue their dominance and keep advertising prices low.

Report Scope

This industry covers the operation of search engines and other websites that act as portals to the internet. Typically these platforms provide a means of searching and filtering information available on the internet. Revenue is generated with the sale of advertising space made available in the portal, or with the sponsoring of search results presented to portal users.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.