It appears that the perennial holder of the fifth spot, AOL, may have turned the corner back in August. AOL search market share has improved for the past 4 months. Unfortunately for AOL there’s a pretty substantial climb to get back to year ago market share levels. Perhaps it’s time to dust off those acquisition/sale rumors … Yahoo? Microsoft? … Anyone?

The only other positive story in December is really just more of the same. That steady monotonous grind you hear is Google continuing to crawl up the market share hill. With each point gain in market share that Google tacks on, common wisdom would have it that it should get harder and harder for Google to continue its growth. Oddly enough the current trajectory hasn’t shown much in the way of diminishing returns. This is despite the dooms day cries of many a search and internet pundit. We shall see.

The holidays certainly were none too kind to the rest of the pack. The biggest “month-over-month slide prize” goes to Ask who as you may remember we’ve been following with some curiosity regarding their offline efforts. Ask just barely managed to eek out a December 2006 market share higher then that of December 2005. After the big slide in November, Yahoo again tipped downward losing only a slight amount of market share but losing none the less. Does anyone think Yahoo’s going to put any effort into building market share after they redeploy post Panama launch? I hope so … for Yahoo’s sake.

Search is often touted as being one of the best measures of traffic in and of itself. We put that to the test with out top-10 list this month. For this search report we’ve decided to take a look at the online retail “searchscape” having just put the holiday season behind us. Looking at the top-10 retailers searched for on the major engines is pretty interesting. In the chart below we’ve ranked the top ten retailer related searches**. They are ranked in relative order according to where they appear in the overall list of search terms used in the market on each of the engines. Then we compared that to the relative ranking according to each associated sites unique visitors.

For the most part search term use tends to correlate with overall traffic. There are a couple of notable differences however. Both Amazon and Sears did not fair as well in search results as they do in overall traffic. This raises a number of interesting questions. How are Amazon and Sears getting more traffic then their search query occurrences might suggest? Perhaps a topic for another day …

* Search market share includes web search only and is calculated based on unique queries within each session during the given month. A unique query is defined as unique user, search engine, and term with no double counting for repeat queries within a session by the same user. Compete tracks the 20 top search engines. For more information please contact Compete.
** Includes all standard variations ex. toys r us = toysrus, toysrus.com, toys r us.com, toys-r-us, and toys r us

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• Google.com
• Ask.com
• Dogpile.com
• Yahoo.com
• Live.com
• AOL.com

Compete Blog eclipsed the 10,000 ranking barrier last night on Technorati!! Yes, five months ago this blog was ranked 1,000,000th and we said, “lets get into the top 10,000 by January”. Done. The Compete Blog is currently ranked 9,244th on Technorati.

A BIG thank you to all contributors, and everyone who has linked back to our posts and the blog. We love each and every one of you. Lots more good stuff to come!

Blog Contributors:

Check out December data now on SnapShot.

I’ll admit it: Sometimes I just don’t get the Internet. I had expected December’s Top Ten Mover’s list to feature Brittney’s naughty bits vs. Saddam’s final minutes in a voyeuristic showdown between sex and death. But alas, it was not to be. Other than the obscure, GoBritney.com, which doesn’t even appear to feature any of the infamous “oops” photos, neither Ms. Spears nor Mr. Hussein made much of an impact. Even sites like perezhilton.com, which saw big increases in traffic toward the end of the year, didn’t see large enough growth to crack our list.

Two home grown sites in particular caught my eye:

Terrisfunny.com led the way with 1.7 million visitors – a more than a seven-fold increase. The reason? Two phenomenally hilarious flash animations that are linked on the site. Apparently the “Snowman” and “You’ve got a Friend” animations were forwarded in hundreds of thousands of emails nationwide. Go ahead, view them for yourself, and hold on to your hat, because the hilarity is stunning…..

The other web-design masterpiece on our list features thousands of inspirational pages set to music by Margi Harrell, all of which can be found at llerrah.com (It’s “Harrell” spelled backwards. Get it?) If you’re in need of a pick-me-up, or if you want to send everyone in your address book a religious poem set to music, this is the place for you, and apparently close to 2 million people just like you.

Like I said, I don’t always understand the Internet. But now I think I have a better understanding of how network shows like JAG can stay on the air.

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• terrisfunny.com
• angelrays.com
• starwave.com
• llerrah.com
• claus.com
• gobritney.com
• my-codes.net
• northpole.com
• sheriff.org
• restaurant.com

While svelte HDTVs are flying off store shelves, their companion next generation DVD players of the rival Blu-ray and HD-DVD varieties have collected more dust than interest since their introduction last year.

Many had expected the introduction of the PS3 (which doubles as a Blu-ray player) to tip the scales resoundingly in Blu-ray’s favor. Despite claims this week of victory by Blu-ray backers, there is mounting evidence to the contrary.

While Blu-ray has received a much needed boost from the PS3, its lofty price, Xbox 360’s continued console leadership, and LG’s announcement this week of a “dual-format” player are evidence that this battle will rage on for some time.

During the last half of 2006, demand for both formats, as measured by the number of U.S. consumers shopping online for the respective stand-alone players, was virtually identical. In December, for example, 46,000 U.S. consumers shopped for a Blu-ray player while 43,000 shopped for a less-expensive HD-DVD player. Among these shoppers, roughly a quarter shopped for both Blu-Ray and HD-DVD players.

Victory in this battle was so important for Sony that it delayed the release of its PS3 for months while it sorted out Blu-ray component and manufacturing issues. Sony’s strategy ensures a Blu-ray convert for every PS3 sold, but the challenge, of course, is convincing consumers to value the added functionality enough to pay a premium to go “all-in” with Blu-ray.

Microsoft, firmly in the HD-DVD camp, now offers a HD-DVD add-on drive which, when combined with an Xbox 360, roughly matches the PS3’s functionality. Over 5 million Xbox 360’s have been sold in the U.S. since their introduction in late 2005. Microsoft is likely to cut the price of the console over the next couple of months, and if strategically warranted, could subsidize an even greater portion of the HD-DVD add-on in order to spur adoption among Xbox 360 users. While only 3% of Xbox 360 console shoppers shopped for the HD-DVD accessory in December, a price cut will undoubtedly give it a boost while making the price disparity between the Xbox 360 and the PS3 even more glaring.

LG’s unveiling of a “dual format” player at this week’s CES, and the accompanying rumors of a potential “truce” in this battle would be great news for consumers but a nightmare for Sony. If dual-format players take hold and studios continue to support only one format, PS3 owners will be stuck with a device that only works with some titles. The very Blu-ray player Sony was so determined to include in the PS3 might, in the end, render the PS3 obsolete instead.

Note: Online demand for these formats was calculated based on the monthly unique visitors to Blu-ray and HD-DVD stand-alone disc player product pages at the leading online electronics retailers.

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• digital50.com

I am proud to say that I was one of the early adopters of eBay way back at the beginning of internet time. Setting aside my extensive poetic license, I’ve been a pretty big fan of the eBay way for a long time. However, in recent years I’ve become a little disenchanted. More often than not it seems that I can find a better deal on the same product at a “regular” online retailer. If eBay is really the efficient market place that it has touted itself to be, this should self correct over time. All else being equal, eBay auction prices should end up at parity with the rest of the online retailers. Let’s look at some numbers.

It’s no surprise to anyone that eBay is definitely a big daddy of the web. eBay tallies in as the 4th most trafficked domain in the US market. The reality for eBay though is that a large majority of the traffic to the site is not particularly fruitful. In order to buy or sell you need to register. It’s a little tricky to exactly identify registered users since there are a number of ways registered users can interact with the site. We developed a proxy set of activities that we felt captured most of registered user activity; visiting My eBay, starting the bid process, and starting a listing process.

So, we know that there’s a lot of people just browsing on eBay. If we look at the breakdown of registered users that are bidding and listing here’s how it breaks out for the past six months.

It appears that there are a lot more people bidding on items than actually selling items. This alone would be a pretty good driver for pushing prices up on listings. However, it isn’t quite that simple since we know there’s a lot of heavy duty “Power Sellers” that list hundreds or even thousands of items a month. There probably isn’t the same dynamic on the buy side however. One way to get at this is with Page Views per Unique User.

From this data we can see that “listers” visit about 3 times as many eBay pages as “bidders.” This indicates that sellers are more active and supports the Power Seller notion.

So to recap we’ve got a lot of browsers, a few bidders, and relatively tiny pool of sellers selling a lot of items. Since a seller is unlikely to compete against him or herself it’s pretty obvious where the advantage lies in the eBay marketplace. eBay has clearly done a great job to establish its brand in consumers eyes. The question that remains is which has more staying power … brand equity or market theory?

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• ebay.com