Ok, not quite. The idea was to post summaries of the sessions presented at SES in real time but the reality is that having hundreds of people trying to connect to the same wireless network at the same time results in agonizing connectivity not seen in the modern world since the early nineties.

However, today Derrick and I found the Internet (see picture) and to our surprise, no one else seemed to be using it (hence the stunned look on my face).

We are now online and will be posting our session summaries shortly…

eMarketer released a report on the state of online marketing in Canada this month and it made me wonder about the state of the online economy in Clicks2customers’ home country, South Africa. Why? Because a few weeks ago Google arrived in South Africa. This probably doesn’t really impress the seasoned online marketers in more developed countries. But down here, it is a big thing. And Google seems to be very serious about the South African online market.

At first sight it doesn’t make sense though, Canada has a population roughly two thirds the size of South Africa’s, broadband penetration is 60% and 63% of its people use the internet. And yet according to eMarketer, online marketing in Canada has struggled to take off.

In comparison, according to a local study, only 1.5% of South Africa’s population has access to broadband and an additional 6.5% connect via other means. More shockingly, the projected growth in internet usage for 2007 is a paltry 3%.

So why has Google set up shop in the country? Surely they will go after the ‘traditional’ online marketing budgets for paid search and adsense but I am convinced Google is also using South Africa as an experimental playground for their mobile strategy.

Cellphone penetration in the country this year reached 70%, as high as in the US. But unlike in the US, for many South Africans a cellphone is their only gateway to the internet. This provides Google with a user base that is comfortable with the mobile experience and does not have pc-based online habits (habits that would be tough to alter in seasoned broadband users) .

Having seen a demo of Google’s Android platform, I think it has the potential to create an online revolution in our country by making iPhone-like features available to a wide (and hopefully cheaper) range of handsets. And don’t forget, economically and demographically, South Africa is often compared with other developing countries such as India and Brazil. If Google manages to crack the South African mobile market, they probably breeze into other developing countries too, giving them prime access to more than a billion mobile users.

I don’t believe Google is in South Africa for philanthropic reasons, they are here to make money. And they might just strike it big…

No one imagined back in 1998 how a tiny start-up would turn out to be a global leader in the search industry in less than a decade! Yahoo must still be feeling like fools for agreeing to put Google’s search box on its home page, giving their users a taste of what was to come. A move that would prove to have cataclysmic consequences for a once successful leader in its field. In a classic failure of foresight, they turned down an offer to buy Page & Brin’s search technology for a paltry $1.6m. And where was Microsoft?

But is Google’s search technology still that much better than any other search engine? Is it not perhaps a case of Google’s brand being so dominant & well known that users are automatically turning to it to conduct their searches? In fact, Google is so widely used that the Oxford English Dictionary has added it as a verb (“Google it” To use the Google search engine to find information on the Internet. To search for information about (a person or thing) using the Google search engine).

While Google draws 60% of searches worldwide with its closest competitor (Yahoo) at 14% the percentage of users who return to the top 3 sites places Google’s lead in a different perspective: Although Google enjoys a 79% rate of return, Yahoo  & Microsoft are not far behind at 69% & 65% respectively (Nielsen/NetRatings). Added to this, a recent University of Michigan study showed that Yahoo has surpassed Google in terms of customer satisfaction! (Google doesn’t seem too concerned about this!)

While Google enjoys 82% of search queries in Germany, both the French & German governments are planning to inject a combined $387 million into search engine research. In China, the biggest emerging online market, Google receives only 17% of queries & in Japan it trails behind Yahoo. The Japanese government is also funding local search efforts to the tune of $125 million.

The question is: “Will Google be able to sustain its position as a market leader & be the fairest search engine of all?”

Social networking, through sites like MySpace & FaceBook, has become enormously popular. In fact social networking has become more popular than online porn! (Wives & girlfriends all across the world are sleeping easier at night…) Google has been quick enough to slap down $900 million for the right to provide search & serve ads on MySpace. They clearly take note of the projected ad spend of $2 billion on social networking sites in 2010. In addition they are determined to fight Facebook by unveiling an open-standard for developers to create applications that will work on a number of social networking sites. This move will give Google access to over 100 million additional users!

And it doesn’t end there: Google is entering the world of wireless technology. Clearly their intention is to entrench their position even further in both search & online advertising. Google will be providing the software that will be installed on handsets under the open source licensing model. A move that does not sit well with companies like Microsoft, Palm or Symbian that have invested vast amounts of money in developing operating software for mobile phones.

While many market leaders have had their bubble burst, the likes of Novell, Lotus & AOL come to mind, my money is on Google. I believe they will find a way of managing to stay at the forefront of their business (& that of many others’) even if it means gobbling up smaller companies that may pose a risk, for a few pieces of silver.

Not everyone may like former internet and securities analyst Henry Blodget but generally I find his blog refreshingly honest and independent. Recently Blodget contemplated how long Google’s phenomenal growth could last. After all, it is easier to get to the top than to stay there and Yahoo and Microsoft are showing an increasingly dogged determination to reclaim some of the market share they have lost to Google over the past years.

Despite heavy investments in other areas, Google still makes almost all of its revenue from those familiar text ads and Blodget questioned how much longer it could maintain its stellar growth as advertisers are faced with increasing CPCs and decreasing marginal returns. Both Yahoo and MSN on the other hand have still relatively low CPCs so advertiser are incentivised to migrate some of their budgets to these search engines. But the response from search engine marketers was almost unanimous: despite lower margins, Google is able to deliver traffic volumes unmatched by its rivals and therefore it is simply not an option not to advertise on Google. Our experience is similar: outside the US, Google is almost the only search engine that matters, apart from a few local companies such as Baidu in China.

In the US, Yahoo and to a lesser extent MSN can deliver additional volume to mature campaigns but Google is generally the first choice when it comes to launching campaigns. In addition to volume, Google Adwords offers ease of use. This is not to be underestimated when managing many campaigns of various sizes. Yahoo and MSN completely rebuilt their advertising system in the past year but I can’t help feeling they somewhat missed the opportunity to offer simplicity. Just compare how long it takes to have a campaign up and running on Adwords vs. Panama (or -sigh- MSN).

All this admin is unnecessary overhead which adds to the hidden cost of running a campaign and it is something which Blodget didn’t incorporate in his argument. Google Adwords is not perfect and we regularly see peculiar behaviour that indicates that behind the scenes Google engineers do make mistakes. But the company is serious about search (and even more about search advertising) and seems far more proactive and aggressive defending its market dominance that its rivals appear attacking it. So although I won’t get into a discussion about whether Google’s market valuation is justified, I do believe that the company has not lost the drive and focus that made it thefifth biggest company in the US.