Skip navigation
Skip navigation
You are using an outdated browser. Please upgrade your browser.

26 June: The need for effective search engines to locate information on the web, and retrieve information within sites, has resulted in increasing investment into new search technologies. Ovum, the analyst and consulting company, predicts that search vendors will generate over $1.2 billion in revenues this year, a figure which will more than double by 2006 to $2.6 billion.

Next generation search technologies* aim to ensure that searches are more relevant and dependable, and therefore inherently more valuable to the consumer.

The bursting of the bubble has resulted in a consolidation of the web search engine market with the spotlight thrown on the efficacy of vendors’ business models. There is a danger that many of these essential tools could disappear due to lack of funds.
Eric Woods, Director of Knowledge Management Research for Ovum explains:

“Although search technology is the cornerstone for millions of internet users, web vendors are struggling to develop sustainable business models.
“ It costs a lot to develop highly effective search technologies for general use and people can change to other search providers without penalty. We expect a big shakeout in the next three years.
“ This means that many smaller vendors won’t be able to sustain viable business models and companies left in the market will be well placed to capitalise on the resultant opportunities. Companies such as Google and Fast Search are set to grow dramatically.”

There are real opportunities for making money through effective search technology, for those vendors who take a considered approach. Ovum’s research shows that advertising revenues will remain the cornerstone of web-search vendors’ revenues – either directly or indirectly through portals who license the search technology – through 2006.

However, the large incomes from venture-capital funded dot.coms has disappeared, and advertisers are no longer prepared to fund scattergun advertising. The key is highly relevant advertising which is acceptable to Web users. This is reliant on next generation search techniques which can understand the purpose and context of web queries.

As the market consolidates and less effective companies are squeezed out, successful vendors will be able to develop a stable customer base. Through effective global branding and the targeting of advertising revenues, user services and technology licenses, they will be able to develop core services and cross-market standards that benefit all their customers.
Users meanwhile will benefit from constantly improving search products and services giving them real assistance to find what they need, rather than hindering their efforts, as is the case today.
The enterprise search market is also poised to grow, with a strong link to the knowledge management and business intelligence software market worth $15 billion this year.
Enterprise search vendors such as Verity are successfully competing with vendors of content management, enterprise portal and collaboration software.

Ovum research shows that the best chance for success lies with search vendors embedding their technologies more deeply into corporate application infrastructure.
This fits well with the move by companies to maximise information sharing within their organisations.
Eric Woods explains:

“Many organisations have now realised that simply adding search capabilities is not enough to truly exploit the benefits of Web and Internet platforms for internal and external information sharing.
“With the increasing need for personalisation and discovery of information through the web as well as within companies, the search market is poised for rapid growth.
“The next two years will see the market consolidate and the vendors with the most effective strategies, particularly those who can build a global brand, win the market share.”
* Ovum defines ‘next generation search’ as ‘the technologies and products that bring new levels of intelligence, order and personalisation to the search process.’ It encompasses a wide variety of technologies and products, and includes terms such as ‘information retrieval’, ‘knowledge discovery’, and ‘intelligent search.’

About the report

A detailed report on this topic, “Next Generation Search: Building the Smart Portal” by Eric Woods, Angela Ashenden and Mike Budd is available now. The report provides a comprehensive analysis of the new approaches changing the search, portal and knowledge management markets and evaluates the strategies for success. For further sales information, please contact Ovum at WWW.OVUM.COM or call +44 (0) 20 7551 9021

White Papers

A white paper with detailed information about this topic is available by accessing the Press Packs at http://WWW.OVUM.COM. If you do not have password access to the Press Room please register online. Your request will be processed and access will be granted to all accredited journalists.

About Ovum

Ovum, the analyst and consulting company, is a global leader in the rapidly changing world of converging technologies and markets. Genuinely original thinking coupled with exceptional knowledge and experience allows the company to provide its customers with a definitive map of this complex environment and to guide them through it.

Ovum serves the world’s telecoms operators and service providers, telecoms equipment suppliers, IT and software vendors, IT service providers, consultancies, investors, regulators and large users of IT solutions. Working with both the supply-side and the user community gives the company a unique insight into the demand and the drivers for future technology and market opportunities.
Ovum’s analysts and consultants are located at centres of expertise in London, Boston, Buenos Aires, Seoul, Melbourne and Sydney.

For more information, please contact

In the UK or Europe:

Udeni Samarasekara,
PR Executive
Tel +44 (0)20 7551 9238
Fax +44 (0)20 7551 9090

Richard Creswell, Media and Events Co-ordinator
Tel +44 (0) 20 7551 9027
Fax +44 (0) 20 7551 9090

In North America:

Jennifer Glass, Press Officer
Tel +1 (781) 224 1307
Fax +1 (781) 246 7772

In Latin America:

Adrian Gonzales Aon
Tel +54 11 43 11 1578

In the Pacific Rim:

Madeline Neylon, PR Manager
Tel +61 3 9691 3226
Fax +61 3 9606 0799

This press release was distributed by ResponseSource Press Release Wire on behalf of Ovum (formerly known as Informa Telecoms & Media Research) in the following categories: Consumer Technology, Personal Finance, Business & Finance, Computing & Telecoms, for more information visit