Effect of ad blocker browser on revenue stream of search engine service

Search engine opens the door to the Internet with the ability to allow us to ask specific or broad questions concerning our topic of interest. In fetching relevant information on websites, search engines profile its catalogue of cached websites for details relevant to our specific request for information delivered either through a full question or concepts outlined as keywords.


Thus, search engine is a service which must be supported by a revenue stream for it to evolve and adapt to the changing needs of users requiring ever faster speed in search as well as more accurate depiction of the state of Internet pertinent to the user search request. In search engine lexicon, state of the Internet is a more germane concept compared to the commonly held notion that the Internet is static. By its conceptualization, the World Wide Web is not static and changes on a minute timescale across the world. However, search engines typically release web crawlers to prowl through the vast information resource of the Internet from the perspective of the local search engine, for example, Google Singapore, rather than Google (www.google.com). Hence, search engine typically returns information to the user’s request with approximate temporal accuracy of 1 day.


Amongst the major search engines such as Bing (Microsoft), Google and Yahoo, only Bing could be supported by revenues from other segments of its business such as Microsoft’s popular Windows and Office software as well as its devices offerings. Google and Yahoo, on the other hand, are Internet and information companies, with significant revenues coming from the provision of targeted online advertisements to the search request from each user.


Hence, online advertisement represents a significant source of income to Google and Yahoo; however, the popular trend in contemporary design of Internet browser is the ability of the user to select an advertisement free mode, where the browser would automatically block the display of online advertisements from the search engine such as Google, Bing, or Yahoo.


Losing the ability to display advertisements would thus lead to loss of revenues from the search engine as fewer companies opt to display online advertisements with click through payment or purchase. More importantly, cognizant of the increasing prevalence of ad blocker browsers, companies choosing to advertise online would also negotiate a cheaper price for their block of advertisement time.


Collectively, availability of ad blocker browser provides end user with the choice of surfing the Internet free of the hassle and distractions from online advertisement. However, understanding the importance of online advertisement to the revenue stream of Internet search companies such as Google and Yahoo, as well as its role in potentiating further research and development for improving the search relevance, speed and accuracy (both in content and time) of the service, meant that ad blocker browsers may hold significant implications to the future developmental trajectory of Internet companies, specifically, how the search business is construed in relation to other business segments of the company. In particular, information companies such as Google and Yahoo may have to plunge further into the devices and software business in order to generate sufficient revenue to support the free online search business, previously supported by an online advertisement service.


Category: Internet,

Tags: search engine, online advertisement, ad blocker browser, revenue stream, information company, Internet company, business segment,


Acknowledgement: Ng Wenfa thank Seah Kwi Shan for co-authoring this blog post.






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