Disclaimer: I work for Vivisimo, owner of the Clusty metasearch site. These are my personal views only, not those of Vivisimo or Clusty, so don't sue them because I happen to work there and I'm talking about this market. If you're a reporter, please don't bother quoting anything I've said - you'll probably get it wrong, as usual.
Google has received much bad press recently. This recent New York Times article summarizes the problem nicely: Google, Yahoo, MSN, and AOL are all complying with the Chinese government's requests to censor content served to China and help track, identify, and shut down prohibited Chinese blogs and human-rights sites.
This started as a small problem that a few bloggers were whining about, but it's gaining momentum as more people hear about it. It's a serious problem for Google, since much of their popularity is derived from their otherwise-excellent reputation for integrity and Doing No Evil.
While it's a gross exaggeration to predict Google's downfall from this, it's certainly worth remembering how they gained popularity in the first place, and considering how a competitor could step in and steal their marketshare.
What makes people use a particular search engine?
Most people aren't tech nerds - they don't care what search engine they use. They don't even know what a search engine is. All they know is that they can "click on the internet" (the Internet Explorer icon) and type something into "the internet" (the default MSN IE homepage's search box) and click on the site they want. Many people don't even use the address bar - they slowly type "www.hotmail.com" into the search query box and click on the first result. (This is surprisingly common.)
Before the Firefox homepage deal, Google didn't have anything like this. They never did any advertising. What made them so big?
It didn't take much to attract the tech nerds and power users. Quick searching of a large index with a fast-loading, uncluttered, text-only layout that delivered satisfactory results from a company that wasn't big and evil. The alternatives had huge colorful ad spaces surrounding everything, marketing-overloaded copy, and results of questionable quality and integrity.
The nerds and power users spread the word. Remember, this demographic controls a lot of websites. Then, whenever the college kids would go home to their parents' and grandparents' computers, they'd switch the default homepage to Google. Their parents and grandparents, of course, didn't notice.
If Google's user loyalty weakens, any competitor can step in and take a large marketshare by attracting the nerds and power users. These are the "seeds" - if you get their attention, they'll do the rest of the work for you.
How do you do that?
1. Don't be evil. Power users are smart, or at least think they are, and they don't appreciate having the wool pulled over their eyes. If they suspect that you're doing anything dishonest, like inserting unlabeled paid links in search results, you lose credibility immediately and permanently.
While Google still scores well here for most people, the perception is eroding. Moreover, any loss of this perception is permanent. Look at how much respect AOL gets from power users for an example of this, despite their best efforts and massive improvements over the last few years. Oh wait, Google did what? They entered a huge partnership with... AOL? That's not a great sign for the power users at all.
2. Don't suck. It's a simple concept - make your search engine work well. MSN and Yahoo have recently caught up with Google on this front. Power users are resistant to marketing - you can't just tell them that it's good with a bunch of long words and press releases. They're also immune to patronizing. They have to decide for themselves whether you suck, and if you don't, then they'll show everyone else how great you are.
Notice that this list does not include a trillion-page web index, a video search, an audio search, a mapping program, a free Web 3.0 AJAXLOL mail app, a calculator, or an attempted Craigslist replacement that nobody uses. These are nice features, but they won't sway people away from their favorite web-page search engines.
The "evil" slip-ups are hurting Google, but it would be much worse if any the only perceived alternatives, MSN and Yahoo, were better in this regard. What if this changes?
This is probably a very good time to be in the web search market.