So you think growth is dead in online search and advertising? Think again.

The naysayers
A lot of people might agree with that first sentiment. Every time I talk about Google (NASDAQ:GOOG) or Yahoo! (NASDAQ:YHOO) in a positive light, I always get a surly comment or email that talks about online advertising being dead/stillborn/impossible. Search is free if you take out the ads -- so where's the moola? The whole sector is a pipe dream that's bound to crash and burn before you know it.

Their place in history
OK, so let's say that "online search is not a real business model." Let me place that zinger into historical context for you:

  • "A rocket will never be able to leave the Earth's atmosphere." -- New York Times, 1936.
  • "I think there's a world market for maybe five computers." -- Thomas Watson, chairman of IBM (NYSE:IBM), 1943.
  • "Stocks have reached what looks like a permanently high plateau." -- Yale professor Irving Fisher, two weeks before the Black Thursday crash of 1929.
  • "Evacuate? In our moment of triumph? I think you overestimate their chances." -- Grand Moff Tarkin, seconds before the Death Star is blown to smithereens in Star Wars (1977).

All of these infamous misprognostications have two things in common:

  1. They were dead wrong.
  2. They were built on faulty assumptions.

How Google today fits into that grand tradition
If you still think that online search is a dead growth market, you must also believe that innovation is dead in that space. Every search engine in use today fills every conceivable need, and there is nothing left to invent.

But last week should have convinced you otherwise. For one, Google launched a massive improvement of its core search engine. With the new "search options" functionality, you can now filter search results by document type (reviews, discussion forum posts, or videos, for starters) and narrow them down on a timeline. Google can suggest related searches to broaden your search scope, or present the data with images or more text to help you narrow things down further.

Yes, it's a big deal!
If that doesn't sound like a major overhaul to you, dear reader, then I simply don't know how to impress you anymore. I'm already addicted to the timeline search, and getting better at coaxing better searches out of the new Wonder Wheel gadget.

These humbly named "options" are a real difference-maker that sets Google apart from the competition. Yahoo! Search can't do any of these things. Neither can Microsoft's (NASDAQ:MSFT) Live Search nor IAC's (NASDAQ:IACI)

But that doesn't make Google the only innovator, of course. The other major search engines have their own unique features, like's Q&A results or Yahoo!'s nifty image search. And it's not too late for upstarts to make a difference, either. The other major advance in online search last week was the launch of privately held WolframAlpha, which returns simple fact-based answers for complex questions. Wolfram has already become my thesaurus of choice, replacing Ask's

What it all means
My point is very simple: Online search is still a living, breathing field of technical innovation. Search and advertising already fuels Google to the tune of $21.8 billion in 2008 revenue, proving that somebody, somewhere is already willing to pay good money for something as ephemeral as clicks and referrals. And we've come a long, long way from anemic pre-Google search services like Webcrawler, AltaVista, and Lycos. Google itself is a whole different (and much better) animal than the simple search box that blew my mind in 1999.

And there's still a ton of research left to do. Will Google or Research In Motion (NASDAQ:RIMM) perfect the display of mobile search results first? We often search for the wrong thing; maybe Microsoft will be the first to figure out what I really meant by that cryptic 6-word query. Or maybe it'll take Medtronic (NYSE:MDT) tapping into my brainwaves with some fancy portable EEG device.

One quote to close them all
"Any sufficiently advanced technology is indistinguishable from magic." -- Arthur C. Clarke, 1962.

We're not there yet, and Google might not be the first to arrive. But there's enough improvement in online search left uninvented or even unimagined to fuel many years of profitable growth for the Big G.

Further Foolishness:

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Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like. The Motley Fool is investors writing for investors.