Page II: In moving beyond Web search to the desktop, the company faces a slew of challenges: controversy over privacy, technical hurdles and the rivalry of Microsoft among them.
According to a report in The New York Times, Google will try to fulfill an unmet need among PC users for tools to easily find information across multiple applications on the hard drive -- searching through e-mail, text documents in various formats, music, and photos files, for example. Consumers would likely be the primary audience for such a tool, but it could easily infiltrate workplaces, too.
Apple Computer already offers an elegant tool built into Mac OS X to perform many of these tasks, but it only works on its own Macintosh line of computers, which account for less than 5 percent of the market. Although Microsoft includes desktop search software as part of Windows, it is unwieldy, and most users rely instead on self-managed file folders to organize their archives.
Microsoft is working on updating the next version of Windows -- Longhorn -- to allow people to search text, files and the Web within many applications. However, that version isn't slated for release until after 2006.
Rough road ahead?
Google could establish a foothold -- and a competitive edge -- in this desktop search market by getting in early with free consumer software, supported by advertising. Also, it could broaden its advertising into a much more intimate PC environment, off the Web, where people spend at least 50 percent of their time.
Yet the company would instantly encounter new challenges.
AltaVista, now owned by Yahoo, was among the first to take a stab at desktop search, but its product failed to catch on. Since then, a slew of companies have developed downloadable software applications to address the problem, including Copernic, Groxis, Enfish, 8020 and X1 Technologies. None have gathered critical mass.
Research firm IDC has estimated that sales of software for search represented a $617 million market in 2003.
"It's a tough market, lots of companies have come and gone," said Andrew Feit, a senior vice president of marketing for corporate search technology provider Verity.
Although Google has mainly avoided controversy over its Web search ads, it runs the risk of alienating consumers if it misplays its hand in a downloadable application that aims to sort through private material, critics say.
Adware companies such as Claria and WhenU are trotting out new desktop applications to appeal to consumers and support their ad businesses. Claria and WhenU began by bundling their advertising software with other popular file-sharing applications so they could increase the number of people they might track for ad purposes. These companies monitor people as they surf the Web and send targeted ads based on their behaviour. The practises have landed them and many others in court, where they have argued for their right to deliver ads to the Web sites of their customers' rivals.
In a sign of growing overlap between Web search advertising and ad-supported desktop tools, Yahoo's Overture subsidiary has struck a deal to display tiny text advertisements through Claria and WhenU.
American state and federal governments are now interested in regulating and perhaps even banning adware and its more controversial cousin, spyware. Utah has already enacted such a law, and the US House of Representatives and the Federal Trade Commission have convened hearings on the issue in the last few weeks.
Google may be backing self-regulation in advance of widespread laws. This week, the company released a set of suggested principles for software makers to follow when writing programs that embed themselves on Internet users' PCs. The guidelines propose that an application should follow simple rules of politeness: It should admit what it's doing, permit itself to be disabled and not do sneaky things like leak personal information.
Yet even if it applies such best practices, Google could still land in hot water. Given that the company already has access to information about people's search histories and Web surfing behaviour and will do so about their e-mail communications through its upcoming Gmail service, Google could take heat from privacy advocates and consumers.
The company already makes the Google Toolbar, Deskbar and other products for Windows that transmit some information about Web surfing behaviour back to its servers. Under proposed laws, these tools could be regulated, as would its upcoming ad-supported desktop search software.
"What's happened is that there's a trend of going from search to publishers to the desktop. After looking at the beginning of that market with Claria, the question is: How do you make it a consumer experience that they not only want, but also aren't offended by?" Highland's DeSilva said.
Those concerns over embedded software are unlikely to affect Microsoft, whose upcoming integrated search tools will probably be kept free from advertising.
Software challenges
Google also faces considerable hurdles in the technology side of desktop search.
"So many people equate search with Google, but in fact, there's an entirely different market for enterprise search software. And it is a complex problem to solve," said Sue Feldman, a vice president of content technologies research for IDC.
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