Czech search engine, Seznam is on the block for $1 billion, according to reports, and Google may be in the hunt for that country’s most popular search engine.  And while it wouldn’t surprise me if Google did acquire Seznam to shore up its international influence, it points to a key issue that shouldn’t be overlooked: Google is so powerful and so rich that the chances of a small search engine growing to challenge its prowess are becoming smaller with each passing day.

There are a variety of search engines in the wild that all offer something new or unique.  Some think Quintura will be a major player in the search space one day, while others believe Wikia, Clusty, or even KartOO might have a shot at slaying the Google beast.  Each offers something unique and something that many people may be looking for, but do they have the staying power or popularity to grow under Google’s nose like Baidu, and utterly command the search market in one space?  I doubt it.

Google is simply too big and too powerful to be challenged by a small firm.  That’s not to say that it’s better than Wikia or even better than Quintura,  but it does mean that Google simply won’t let these services get too big before it’s forced to react.

The search engine space is increasingly becoming a three-horse race in the United States and even fewer are finding footing overseas.  According to the most recent numbers, Google now controls 70 percent of the US market and Yahoo and Microsoft continue to lose ground.  All the while, smaller search engines like Wikia and Quintura are not even included in that discussion.  That said, they’re still growing, albeit at a much slower rate than Google.

But that doesn’t matter much anymore.  Years ago, search engines would start up and have a fighting chance at reigning supreme.  But in today’s consolidated market, there’s no such chance.  Instead, the idea of creating a search engine has followed the Web 2.0 mantra that venture capitalists love and egotists that want to rule a market don’t: Make your search engine grow to a level where people take notice, do something unique, and in no time, Google or Microsoft will acquire it to shore up their presence online.

Powerset is a prime example of that idea.  Sure, it only lets you search Wikipedia right now, but what it did do was provide a highly-useful way of inputting queries and getting relevant results to be returned.  And in the process, Microsoft saw something it liked and acquired it before it became a threat or before Google had the opportunity to do the same.

It might sound naive to say that no company will ever really challenge Google, but it may be true.  The way I see it, Yahoo is the only company that’s even close right now and it’s in such disarray that it’s not a threat to Eric Schmidt and the rest of his cronies at all.  Microsoft is probably the stiffest competition because it has the cash to compete, but let’s not forget that its market share is barely relevant — it has yet to even hit 10 percent.

But that’s also where the smaller search engines come in.  Smaller search engines don’t need to play the same game Google and Microsoft do and tend to be more successful when they break the mold and create a real user experience.  The Web is littered with the remains of search engines like Lycos, Altavista, and dare I say, AOL, that tried to do the same thing as Google and failed, so why shouldn’t startups try something new and give the big three some ideas?

After using the myriad search engines on the Web, it’s abundantly clear that some — most notably, Wikia and Clusty — have a chance at growing into a search powerhouse.  But in today’s environment where both Google and Microsoft make billions each quarter and have all the money they need to stop small search engines from growing too large and threatening their dominance, that’s simply impossible.

Google, Microsoft, and Yahoo are probably here to stay for quite some time.  And although I’d like to see a new company crop up just as much as the next person, the chances of another Baidu emerging are extremely small — Google or Microsoft would acquire it before that ever happens.

That said, it doesn’t mean innovation is dead and I fully expect Microsoft to lead the way in that regard.  After all, if you’re trailing by such a wide margin, wouldn’t you want to try something new and hopefully coax more people to your service?

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The major record labels have gone in for a second round of listing pirated songs is bad legal action against leading Chinese search engine Baidu and smaller player Sohu.

Universal Music, Sony BMG, Warner Music and Hong Kong-based Gold Label Entertainment lodged the new suit Monday, asking a Beijing court to order Baidu and Sohu to remove links to thousands of sites that carry pirated music.

A previous case against Baidu was unsuccessful, however the record companies believe recent changes to Chinese copyright law gives them a much stronger case this time. Yahoo China has been found guilty of copyright infringement under the new laws.

The success of Baidu has been credited to its index of music which is available from its front page, something Google has been unable to compete with until now (Google does not offer music search in China). Word leaked earlier today that Google had entered a joint venture with Top100.cn to offer free and legal music in China (details here) later this month.

The NASDAQ listed Baidu remains China’s largest internet company, but the site has been hit harder than many since the sharemarket turned late last year. From a high of $407.70 in November 2007, the stock closed at $230 a share today, down by a whopping 43.6%. Baidu shares fell 2.17% to $225 a share in after market trading.

(via WSJ)

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Google is set to challenge China’s largest search provider Baidu by offering free legal music.

The success of Baidu has long been credited to the search engine providing music search from its front page, but much to the lack of amusement of record companies, the music found by Baidu is nearly all pirated. Baidu fronted a Chinese Court in December, and won the day with a ruling that Baidu did not infringe copyright by merely linking to infringing music.

According to a WSJ.com report, Google’s new free music service in China is in the late planning stages and involves a joint venture with an undisclosed company. The service will offer access to music from three of the four big global music companies, as well as other smaller players, with a launch date possibly later this month.

The move into music provision would be a first for Google, and although this deal is directly in response to Baidu, there is always the possibility that with one territory in place, complete with joint venture partner and music deals, that Google could roll this out into other countries in the future. Yahoo was rumored to be considering a similar service in January, although has since closed its music service in favor of RealNetwork’s Rhapsody service. There are also a number of small players offering ad supported music as well. Either way, it’s yet another vertical where the smaller players/ startups will sleep less well at the thought that Google may enter their space in the future.

Update: Google JV partner is believed to be Top100.cn.

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