Another Search Engine Bites the Dust

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Amazon (Nasdaq: AMZN) quietly bows out of the race to rule the search engine world. Alexa lives on as a rough-and-ready Web traffic measurement service, but the search engine will soon go dark. The rich get richer.

They don't get a whole lot richer this time, though. Google (Nasdaq: GOOG) is the undisputed king of the castle with 63% of the search market, according to the latest ComScore rankings. Yahoo! (Nasdaq: YHOO) trails badly at 20.5%, and Microsoft (Nasdaq: MSFT) commands a minuscule 8.5% of that market. A couple of smaller players are still clinging to life, but Alexa gets only a 0.7% share -- and shrinking. Time to shut this service down, spreading that tiny audience around to the other guys.

It's not that bad for Amazon, though. Call it a cost-savings initiative while the online retailer digs deeper into more-promising ventures.

Getting a foot in the door very early on, as Amazon did in the cloud-computing sector, is very different from throwing your hat in the ring when the pecking order was established years earlier. You have to build a much better mousetrap to pull the me-too stunt off, like Google did in the late 1990s. And Alexa wasn't it.

Amazon's EC2 cloud-computing platform was an early entrant into that new and promising market, and seems to be holding its own against lumbering giants like IBM (NYSE: IBM), EMC (NYSE: EMC), and Microsoft. I like the company's thinking here, and can imagine EC2 becoming a serious (and high-margin) contributor to revenue in the next couple of years. In seven or eight years, maybe we'll think of retailing as Amazon's quaint little side business to complement its IT infrastructure services.

Further Foolishness:

• Google Laughs at Yahoo! and Microsoft
• The Cloud Computing Giant You Don't Know
• Sell All Internet Retailers Now