the reflexions insider

Google is full of really smart people working on really hard problems. This is nothing new. Indeed the image of brilliant young engineers working on game-changing new products has come to define the company’s identity. What’s surprising to me is Google’s relative lack of significant innovation in recent years on its bread-and-butter product: search. Recent rumblings indicate that this may start to change.

The company is understandably hesitant to tinker with its core product, which some analysts estimate generates over 90% of its total revenue, especially given its most recent quarter which exceeded even the most optimistic expectations (in a recession, no less). But the sands are shifitng, and the sheer size of Google means it will be hard-pressed to compete with smaller, more nimble competitors who are starting to get attention, like Powerset and Twitter.

A recent article at Google Watch suggests that Google sees its future in the semantic web, a collection of standards and technologies that seek to deliver more meaning and structure to the web’s content but have largely languished due to a lack of widespread adoption. From the article, Google CEO Eric Schmidt is recently quoted as saying:

“Wouldn’t it be nice if Google understood the meaning of your phrase rather than just the words that are in [...]

In the ever-shifting landscape of internet titans, the Microsoft/Yahoo! power struggle is looking more like a teenage soap opera, albeit one with billions of dollars and control of the #2 internet search position in play. But what’s more, the side effects of the struggle are starting to point to a power play for dominance of the burgeoning world of the semantic web.

Besides the posturing and very public nature of both companies’ actions, what’s most interesting — and sometimes most telling — are the investments, partnerships, and acquisitions that have been unfolding since the saga began.

One of the more recent moves was Microsoft’s acquisition of the semantic search firm Powerset, itself coming on the heels of Yahoo!’s recent announcement of its open search platform, providing some support for semantic data to third party developers.

The Powerset acquisition is more than bet-hedging against losing out on its bid for Yahoo!. What Microsoft has started to understand is that the next killer app of the web will be found in the nascent semantic technologies and standards that are only starting to take shape.

Companies large and small are starting to invest big money in semantic web research and development. But if Microsoft can spend big money buying their way [...]