Google could disappear in five years. Here's why.

Could Google really go the way of Yahoo!, which was once dominant in search? One analyst thinks so, because its weak earnings reflect the larger problem of generating ad revenue from mobile traffic.

Mark Lennihan/AP
A Google logo is painted on the side of a plywood box at Google offices Wednesday, Oct. 17, 2012 in New York. Google wireless could soon be a reality according to new reports.

Google may be on its way out as the dominant player in search, according to one analyst — and could even "disappear" in as little as five to eight years if the competitive pressures that ultimately claimed other search giants start to take root.

In the wake of a surprisingly weak earnings report, Eric Jackson, Ironfire capital founder and managing member, said Google could easily find itself fending off the woes that eventually took hold at embattled Yahoo!

 "They could disappear in five to eight years and disappear in the sense that Yahoo used to be the king of search. Now, for all intents and purposes, Yahoo has disappeared," Jackson said Thursday on CNBC's "Squawk on the Street".

 The primary reason Google may lose its search dominance is because the company is facing the same mobile problem as Facebook, Jackson said. (Read MoreGoogle Has the Same Mobile-Ad Problem as Facebook)

 "If Facebook saw a deceleration in their sales and their growth lead to a halving of their stock price...why wouldn't it also be something that is very negative for Google as it continues to play out?" he said.

Google reported in its quarterly earnings, which were released Wednesday, that its cost per click (CPC) was down 15 percent in the third quarter.

 While the company reported that ad sales had increased, it is likely that CPCs will continue to decrease, Jackson said.

 The reason? Consumers are searching more and more on mobile devices, yet advertisers aren't as willing to buy advertisements formatted for mobile devices, because these ads are not as prominently displayed.

 Also, mobile ads tend to run more cheaply than ads made for desktop computers.

"Obviously, everyone is focusing on CPC...Profitability is way down for five quarters now, for Google, quarter after quarter. Paid clicks, the rate of growth is slowing," Jackson said. "We're facing a scenario, where I think in a couple of years, we might hit peak search."

The rise of mobile will lead consumers to want to search in new ways, which may open the door for others to enter the search space. The number one contender may just be Apple — one of Google's fiercest competitors, he said.

"I think that there is a big opportunity right now for someone to step forward and assert themselves for a new way of getting people information for doing search in a mobile world," Jackson said.

"I don't think typing in a blue box is the ideal format for a mobile world. And I think the best opportunity out there to displace Google in this area is probably Apple's Siri."

However, Google could still turn things around, and the company is doing some things to make up for the decline in CPC.

Google shopping, for example, has been changed to only show paid results in a way that should generate a lot of money for the company, Jackson said. This too, however, could pose a new problem for the search giant.

"The question is, is that move going to degrade the service, is that sort of the tip of the iceberg?" he said. "And are we going to start to see paid search results in other areas of Google and is that going to degrade the experience?"

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to Google could disappear in five years. Here's why.
Read this article in
QR Code to Subscription page
Start your subscription today