Google's Core Business Is In The Middle Of A Fundamental Shift

Here's a quiet

bombshell from comScore.

Total core organic desktop search was down on a year over year basis for the fourth straight month in December.

Ben Schachter of Macquarie has the latest comScore stats in a research report. He says mobile and vertical search — retail, travel, social — are killing the traditional desktop search business.

"We estimate that as much as 25-30% of all Internet search traffic could be coming from mobile devices as of year-end. Moreover, in certain categories, such as restaurants, we believe that well more than 30% of queries are already coming from mobile devices (other key categories such as Consumer Electronics, Beauty & Personal, Finance/Insurance, and Autos also have a meaningful share of mobile queries)," says Schachter.

This isn't good news for Google, but it's not entirely bad news either.

The bad news: Mobile search isn't as lucrative for Google as desktop search right now. And on mobile, the importance of apps drives a wedge into Google's search business.

The good news: Google completely dominates search on mobile with something like 90 percent or more of share. It's the default search engine on the iPhone and its default on Android, the most popular mobile operating system. It's well positioned to take advantage of a mobile transition.

Microsoft, on the other hand, is not. It has burned billions trying to make Bing relevant on the desktop. That effort has yielded some positive-ish results.

The latest comScore data gives Bing 16.3 percent of the search market, which is only up from 16.2 percent a year ago. It's had 32 straight months of flat or growing desktop search share. That's good, but it hasn't killed Google, which is near its all time high with 66.7 percent of the desktop search market.

In fact, Bing's relative strength may have helped Google argue that it didn't have a monopoly in search when the FTC investigated it.

That's a minor detail.

The big picture is that Microsoft burned billions fighting for the desktop search market right when the world was preparing to abandon desktop search.

We've reached out to Microsoft and Google for comment, but haven't heard back. When, or if, they say something interesting we'll either update this post or write another story.