Study: Google users wealthier, more Net savvy

U.S. residents who prefer Google Inc.'s search engine tend to be richer and have more Internet experience than those who primarily use competing search services from Microsoft Corp., Yahoo Inc. and America Online Inc., a new study has found.

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The longer people have been using the Internet, the more likely it is that Google will be their search engine of choice, according to a survey of 1,000 U.S. Internet users conducted by investment banking and research firm S.G. Cowen & Co. LLC.

Moreover, people whose primary search engine is Google are more likely to have household incomes above US$60,000 than people who use competing search engines, according to the survey, whose results S.G. Cowen published in a report Monday.

Google also emerged as the search engine of choice, with 52 percent of respondents choosing it as their primary engine for general Web searches. Yahoo came in second with 22 percent, while Microsoft's MSN and AOL tied for third place with 9 percent. Ask Jeeves Inc. rounded out the top five with 5 percent. (Google powers AOL's general Web searches.)

If Google users are wealthier and savvier online, and if Google is the search engine of choice for more than half of U.S. Internet users, then these survey results reinforce the notion among many businesses that it is critical for them to appear in Google search results or Google search ads or both, more so than in competing search engines.

S.G. Cowen also projects that paid search, the type of online advertising driving most of Google's revenue, will progressively tower over all other forms of online advertising in the coming years. The firm estimates that U.S. advertisers will spend $6.1 billion in paid search this year, and $6.4 billion in all other forms of online ads, such as branded/display ads and classified listings.

But starting in 2006, paid search will account for over half of all spending, and increase its lead every year. In 2010, companies will spend $17.3 billion in paid search and $12.4 billion in the other online ad categories, according to S.G. Cowen. The firm predicts a compound annual growth rate (CAGR) for paid search spending of 23 percent between 2005 and 2010, and a CAGR of 14 percent for the other online ad formats.

In another report issued Monday, investment banking and research firm Piper Jaffray & Co. predicted that global online advertising will exceed $55 billion in 2010, a 27 percent CAGR from 2005 levels, and warns that this "will likely prove to be a conservative scenario."