1. Microsoft's (MSFT) new Bing search engine picked up 1.5 percentage points of market share in August to hit 9.5%, according to market researcher Hitwise, while Google's share fell from 71.4% to 70.2%.
2. But longer term, Twitter, Facebook, and related services may pose a more fundamental threat to Google: a new center of the Internet universe outside of search. Twitter, now with 55 million monthly visitors, and Facebook, with 300 million, hint at an emerging Web in which people don't merely read or watch material but communicate, collaborate with colleagues, and otherwise get things done using online services.
3. Meanwhile, Google's very success and size are starting to work against it. In the past year the company has been the target of three U.S. antitrust inquiries and one in Italy. Most recently the Justice Dept. on Sept. 18 said Google's controversial settlement with authors and publishers, which would have allowed it to scan and sell certain books, must be changed to avoid breaking antitrust laws. Even Google's own paying customers—advertisers and ad agencies—say they're eager for alternatives to blunt Google's power. Says Roger Barnette, president of search marketing firm SearchIgnite: "People want a No. 2 that has heft and scale."
4. Most of the search quality group's contributions are less visible because its work is focused mostly on the underlying algorithms, the mathematical formulas that determine which results appear in response to a particular query. Google conducts some 5,000 experiments annually on those formulas and makes up to 500 changes a year