The History of the Internet Search Engine: Navigational Media and the Traffic Commodity

Summary

This chapter traces the economic development of the search engine industry over time, beginning with the earliest Web search engines and ending with the domination of the market by Google, Yahoo! and MSN. Specifically, it focuses on the ways in which search engines are similar to and different from traditional media institutions, and how the relations between traditional and Internet media have changed over time. In addition to its historical overview, a core contribution of this chapter is the analysis of the industry using a media value chain based on audiences rather than on content, and the development of traffic as the core unit of exchange. It shows that traditional media companies failed when they attempted to create vertically integrated portals in the late 1990s, based on the idea of controlling Internet content, while search engines succeeded in creating huge “virtually integrated” networks based on control of Internet traffic rather than Internet content.