Google's Lead Over Yahoo! Narrows in Latest American Customer Satisfaction Index
Posted on: Tuesday, 16 August 2005, 09:00 CDT
Online stalwarts Google and Yahoo! lead the category in the University of Michigan's American Customer Satisfaction Index (ACSI) report on e-business websites released today. The e-business report includes measurements of search engines, portals and online news and information sites.
Customer satisfaction with e-business continued its climb, rising 4.7 percent since 2004 to 75.9 on the ACSI's 100-point scale. E-business narrowed the gap with the ACSI e-commerce measure (78.6) and exceeded the national ACSI average (73.1) for the first time ever.
Google (82), with its roots as a search engine, and Yahoo! (80), traditionally known as a portal, find themselves increasingly competing in the same space, as the categories of search and portals converge. Both companies are in the top-scoring tier of the ACSI, which measures customer satisfaction of over 200 companies across 41 industries.
"The lines between e-business companies are being drawn more in terms of content facilitators and content providers," said Larry Freed, online satisfaction expert and President and CEO of ForeSee Results. "Google, Yahoo! lead the way with MSN, AOL and Ask Jeeves trailing, but closing the gap."
The link between customer satisfaction and revenues is clearly drawn as Google and Yahoo, the leaders in customer satisfaction among the content facilitators, both experienced revenue growth that more than doubled from 2003 to 2004. MSN and AOL who trailed the leaders in customer satisfaction saw modest revenue growth from 2003 to 2004.
"The research shows that those that provide the highest levels of customer satisfaction will prosper the most financially," added Freed.
Dogfight: Google vs. Yahoo!
Over the last three years, Google and Yahoo! have led their respective ACSI categories. Google still holds the top score of 82 in the e-business sector, and its customer satisfaction advantage is reflected in its market share of U.S. searches and in revenues. The number of second quarter 2005 searches conducted on Google exceeds the combined searches on rivals Yahoo!, MSN, America Online and Ask Jeeves. Google's revenues, meanwhile, have more than doubled from 2003 to 2004. In addition, Google has been innovating rapidly, adding Gmail, desktop search, mapping capabilities, and are reported to be planning to introduce video searches and wireless applications.
"Google is clearly the company to beat," said Freed. "They've got the most satisfied and loyal customers of any e-business company measured by the ACSI, and it has translated into the biggest market share in the sector and huge revenue growth. But Yahoo! is going to battle, and web users are the biggest winners in the competition between the two."
Yahoo! increased its customer satisfaction score from 78 to 80 (now just 2.5% behind Google in satisfaction ratings), and like Google, it has seen its revenues more than double from 2003 to 2004. Yahoo! continues to expand into new product areas like SMS search and other mobile phone technology. Yahoo has also picked up the pace of innovation, adding a music download service, mobile search, mapping capabilities and is leveraging HotJobs.com to run neck-and-neck with Google. Yahoo's breadth of services and functionality has always been an advantage for them and they continue to leverage that strength.
"Look for Yahoo! to keep the pressure on Google as the two battle for the dominant position to be the go-to starting point for the user's Internet experience," said Freed.
AOL: Positioned for a Comeback
AOL is catching up, having increased its customer satisfaction score an impressive 6% this year, and fueling over 25 percent increase since 2000 (from a very poor score of 56 to a respectable 71, which is just 6% from the e-business aggregate score). As the e-business sector converges, AOL has moved away from its roots as a pure portal/ISP.
"AOL's meteoric rise comes in large part from their continued leverage of their exclusive content available through Time Warner," said Freed. "AOL is also making the most of their popular AIM instant messenger and beta testing free web-based email and a non-proprietary web based interface. These changes seem to be resonating with its user base, and a company that was down for the count just a few years ago will give the leaders a real run for their money if their scores continue to rise at this rate."
MSN: Despite Commitment to Beat Google, Still Lagging Behind
MSN has its roots as a portal, and has overhauled its search capabilities and added satellite mapping to evolve with the converging marketplace. But with an ACSI score of 75, it has a way to go to catch up with Google and Yahoo!, and MSN is in not in a good position to make a serious move. MSN had minimal improvement in customer satisfaction since 2003 and revenues have remained relatively flat.
"Despite the commitment from its top ranks that it is fighting to beat Google, Microsoft hasn't quite figured out how to transfer its Windows platform ubiquity into a dominant position as an interface to the Internet," said Larry Freed. "In fact, Google seems ready to start to battle Microsoft on its turf with the introduction of desktop search. Given the links between customer satisfaction and revenues, they need to take a smart look at what users really want and start there."
Ask Jeeves: Search Engine Makes Strides
Like AOL, Ask Jeeves' improving customer satisfaction seems to be paying off. Its ACSI score has gone up 16% since 2002 (from 62 to 72), and in the second quarter 2005 it has seen its search queries go up by the same percentage. From 2003 to 2004, revenues have doubled. But unlike most other companies in the e-business category, Ask Jeeves has remained true to its start as a search engine.
"The test for Ask Jeeves will be to leverage the resources of its new parent company, IAC Corporation, which also houses the major brands Ticketmaster and HSN," said Freed.
News & Information Sites Stagnate, as Niches Move Ahead of Leading Brands
Customer satisfaction with news and information sites remains relatively flat, scoring 75 for the second year in a row. But web browsers have taken a stronger liking to smaller players, as the "All Others" category leads with 78. Leading brands like ABCNEWS.com (74) and CNN.com (72) saw their scores stay flat or even dip a little.
"There is no clear winner in the news and information space, as all of the sites have difficulty in differentiating themselves from the pack and leveraging their unique personalities that exist in their traditional channels," said Freed.
News and information sites are those that are primarily content providers. Since 2002, customer satisfaction scores for news and information sites have not kept up with the increases in portals or search engines.
% change % change ACSI 2005 Q2 from last from 1st E-BUSINESS SCORES 2000 2001 2002 2003 2004 2005 year year ---------------------------------------------------------------------- Portals 63 65 68 70 71 75 5.6% 19.0% ---------------------------------------------------------------------- Yahoo! Inc. 74 73 76 78 78 80 2.6% 8.1% ---------------------------------------------------------------------- All Others 67 72 72 79 78 79 0.0% 16.4% ---------------------------------------------------------------------- MSN (Microsoft Corporation) 71 67 72 74 75 75 0.0% 5.6% ---------------------------------------------------------------------- America Online, Inc. (Time Warner Inc.) 56 58 59 65 67 71 6.0% 26.8% ---------------------------------------------------------------------- ---------------------------------------------------------------------- Search Engines NM NM 68 78 80 80 0.0% 17.6% ---------------------------------------------------------------------- Google Inc. NM NM 80 82 82 82 0.0% 2.5% ---------------------------------------------------------------------- All Others NM NM NM 74 75 74 -1.3% 0.0% ---------------------------------------------------------------------- Ask Jeeves, Inc. NM NM 62 69 71 72 1.4% 16.1% ---------------------------------------------------------------------- ---------------------------------------------------------------------- Information Sites NM NM 73 74 75 75 0.0% 2.7% ---------------------------------------------------------------------- All Others NM NM 73 75 75 78 4.0% 6.8% ---------------------------------------------------------------------- ABCNEWS.com (The Walt Disney Company) NM NM 74 74 74 74 0.0% 0.0% ---------------------------------------------------------------------- MSNBC.com (NBC, Microsoft Corporation) NM NM 73 74 74 73 -1.4% 0.0% ---------------------------------------------------------------------- CNN.com (Time Warner Inc.) NM NM 72 72 74 72 -2.7% 0.0% ---------------------------------------------------------------------- USAToday.com (Gannett Co., Inc.) NM NM 71 72 72 72 0.0% 1.4% ---------------------------------------------------------------------- NYTimes.com (The New York Times Company) NM NM 71 70 72 72 0.0% 1.4% ----------------------------------------------------------------------About ForeSee Results
ForeSee Results is the market leader in online customer satisfaction management and specializes in converting satisfaction data into user-driven web development strategies. Using the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI), ForeSee Results has created a model that scientifically quantifies the elements that drive online customer satisfaction and predicts future behaviors, including the likelihood to return to the site or recommend the site to others. ForeSee Results, a privately held company located in Ann Arbor, Michigan, can be found online at www.ForeSeeResults.com.
About the ACSI
The American Customer Satisfaction Index (ACSI) is the only uniform, national, cross-industry measure of satisfaction with the quality of goods and services available in the United States. A key distinguishing feature of the ACSI methodology is its patented scientific approach to customer satisfaction measurement. The technology behind the ACSI computes scores that reflect performance--based on the relative impacts of various components of satisfaction on overall satisfaction and the likelihood of desirable future behaviors, such as repeat purchases. Accordingly, the ACSI methodology is able to isolate and determine the importance of the features and functions most likely to produce these behaviors--an important distinction from basic customer satisfaction ratings.
Source: Business Wire
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