Strong competition from established global players halts growth of Indian search engines

Local search engines are stuttering. ET explores what went wrong and whether there's hope ahead.

BANGALORE: Strong competition from established global players, poor launch timing, wrong targeting and an inability to scale have halted the growth of local search engines, a bunch of which had surfaced in the local Internet scene six to seven years back.

With no signs of a successful revenue model either, the times are tough for home-grown search engines like Guruji, Dwaar, Khoj, Raftaar and Tolmolbol.

While Guruji was involved in a copyright infringement case and its co-founder Gaurav Mishra went on to join rival firm Yahoo!, Dwaar launched by Ibibo in 2008 closed doors in a matter of years. Tolmolbol. com pulls up very few search results and crashes very often. Sify Technology owned Khoj and Delhi based Raftaar are struggling with meager market share gains despite several years of operations.

Roughly six years back, these search engines had come up to replicate the success of China’s Baidu or Russia’s Yandex locally.

In contrast, within a few years of launch, China’s local search engine Baidu grew rapidly to become a billion-dollar enterprise, grabbing the largest slice of the country’s search market and successfully fending off competition from Google. A similar story unfolded in Russia with Yandex becoming the largest search engine.

THE STUMBLING BLOCKS
But the story has been completely different in India which is incidentally the world’s third-largest Internet market after China and the US. “Indian search engines were probably much ahead of their time when they started. Internet consumption was low, connections were slow and online shopping was completely out of the picture,” said Avijith Acharya, who runs search engine optimisation firm Internet Moguls.

“The existing search engines lost focus at some point and did not know how to make use of India’s unique demographic composition.” “Back then, Indian search engines didn’t have a well-defined revenue model. At the end of the day clients will ask, why will I advertise on Khoj if I have Google and Yahoo!?” points out Acharya.

Back in 2005, Rafter.in’s founder Peeyush Bajpai was a researcher with Delhi-based Indicus Analytics and he realised that technology issues in parts of the country were more difficult that he had imagined.

Soon after, he started the Hindi search engine aimed at providing localised content to people in small towns and rural areas. Bajpai realised while most villagers had access to computers and a secure Internet connection - none of them could actually browse the web or run a search on Google because the contents appeared in English.

“They had access to everything but were still missing a whole lot,” says Bajpai. Five years after its launch, Raftaar.in is yet to take off in a big way. Between October 2010 and November 2011, the site had only 5.3 lakh unique visitors while Google had 60.7 million users and Yahoo had over 14 million users in India, according to Vizisense, which measures online audience traffic.

One of the reasons Indian search engines have not taken off, besides the dominance of large search engines, is low Internet penetration in tier II and tier III cities and rural areas where there is demand for localised search in Indian languages.

The other stumbling blocks are lack or poor quality of Indian content and a viable revenue model.“Frankly, home-grown search engines are struggling. They are not even in our radar,” said Amit Dayal, who is VP, Engineering - Search and Marketplaces, Yahoo India R&D.

In India, the search market is dominated by Google which claims 81% market share. Yahoo and Bing have 9.4% and 1.7% of the Indian search market as of November 2011. Others, which include the home grown search engines, have less than 5% share.

MOBILE BOOST
Acharya feels the next lease of life for Indian search engines could come when more mobile users access the Internet. He says the user demographic on the Internet is changing and that is a big advantage for countries like India.

While the dominance of Google, Yahoo and Bing is likely to continue in India, experts however, say with many first-time Internet users are accessing the web through their mobile devices creating a new window of opportunity. “But things could change”, says Bajpai.

“When we started, desktop was the only interface. Today, mobile phones are everywhere. As the number of Internet users on mobile phones grows, localised and genre-specific search is expected to gain momentum, especially in the semi-urban areas,” he pointed out. India crossed more than 100 million mobile users in September 2011, says a report by the Internet and Mobile Association of India. About 46 million users access Internet through their cellphones right now.

Natesh Mani, who heads the commercial and consumer business of Si fy Technologies – which owns Khoj.com -- says the idea is not to compete with Google or Bing but to introduce niche vertical search engines powered by internal algorithms.

“In India, we have players like Just Dial and Sulekha who cater to a very local audience. Finding the right zone is something is one side of the problem...the other challenge is with having the necessary ammunition - server space and superior algorithms - to give results better than biggies like Google and Yahoo,” he said.

According to one estimate by an indystry watcher, nearly $1 billion needs to be spent every year to run a large-scale search operation like that of Yahoo’s. Very few Indian search engines, even when promoted by other technology firms, have that kind of deep pockets.

Mani says that Khoj.com has slowly adapted to the changing search landscape and is currently a vertical search engine, focusing on segments such as job search, education search, movie reviews. “In future, it would be necessary to be topically, regionally or geographically relevant with regard to answers,” he said.

Chinese companies had the advantage of being the first movers, having a large population that liked to work in their native language, availability of local language keyboards and protectionist policies that helped local businesses in the country.

Poor technology adaptability of local lingos has been one of the reasons why Indic computing hasn’t taken off in India stymieing local search moves as well.