Is Google vulnerable in the search platform war? Could they lose the battle because of both technical and business model failings?

Note that I’m not knocking Google as a general purpose search service– it’s great for that. But it’s not a great platform for third parties to use for building extended search services.

There are number of interesting services built on top of the Amazon API, but fairly few significant efforts (except for a9 itself) built on top of Google. I see limitations in both the Google API and their business model that explain these different outcomes.

First, the technical failings: Limitations in the API make it difficult to build a service on top of Google that is either richer or more targeted than Google. Google has already filled the niche for simple, clean UI, so there’s no room to add value there (as Amazon Lite does for Amazon.)

Suppose you have compiled a list of the 20 best sources of reviews on the web, and you want to leverage Google’s full text index to search these. This isn’t possible to do, because Google allows only a single “site:” specified in a query.

Suppose you have structured data about people and their home pages, and you want to build a search joins your data with Google’s unstructured index. Sorry, not possible.

Suppose you want to deliver more targeted advertisements to a specific subset of the Google audience who comes to your site? Again, very difficult.

Second, the business model failings: when you use the Google API to get search results, you strip out all the value of the adwords model– the Google API doesn’t even expose advertisements, or have a meaningful revenue sharing model. This makes the Google API ideal for building toys that get 1000 hits a day, but bad for building meaningful commercial services.

When Amazon returns data about their books, this helps sell books through Amazon. The API supports itself. Because Google doesn’t allow advertisers to pay for search rankings, it needs to figure out an alternate way to extract value from the API.

It’s conceivable that a pay-for-placement search engine (MSN? Yahoo?) might choose to drag race Google in the search engine platform war. Unlike Google, they would have incentives for allowing as many sites as possible to build on top of their API. Given stronger incentives, and the existing weaknesses of the Google API, they just might win.

Microsoft won the PC war by building a platform and getting smart third parties to buy into it. If I were them, I would make that my strategy relative to Google.

If I were Google, I would figure out clever revenue models for a search API and work to develop a commanding lead as a search platform. They could easily do this, assuming they don’t take their off the ball with all their various initiatives.