(30 March 2006 5:30 pm)

MUMBAI: Analysys International, an Chinese internet based provider of business information about technology, media and telecom industries, is expecting a sharp slowdown in the growth of China's search engine market in the coming 18 months. This will be due to increasing dissatisfaction from small and midsize enterprise advertisers of search engines.

"China's search engine industry will face a sharp slowdown in the coming 18 months. The actual performance of search engines is far from people's high expectations. Poor user experience, unstable advertising effects, and some irregular channel operations make the small and midsize enterprise customers of search engines suspicious of this new kind of advertising, which will lead to a slowdown in the growth of the search engine industry," said Analysys International CEO Edward Yu.

However, according to Analysys International's business life cycle model, search engine industry in China is still in the initiation stage, characterised by high and fast growing market expectations. Search engines still can't understand exactly what users want and the search results are usually not satisfying.

"The user experience is not satisfying. When a user types in a word to a search engine, it is likely the user doesn't get what he or she exactly wants, which leads to low brand loyalty." Analysys International says over 46 per cent users turn to other search engines or portal websites when they don't get what they want in a search engine.

Most important, Analysys International says, some small and midsize businesses that advertise on search engines are not satisfied with the advertising results. And the dissatisfaction is still increasing. Search engines haven't brought the value they had expected to them.

According to Analysys International's research of 1500 samples, only 20 per cent search engine advertisers obtained results that exceeded their expectations, while about 29 per cent didn't get the results they had expected and were considering reducing or suspending their search engine marketing expenses.

As customers become reasonable, Analysys International says revenue growth in China's search engine sector will encounter a sharp slowdown in about 18 months.

However, the company also says, as the industry chain improves and the business model gets clearer, the search engine sector will finally enter the stable growth stage.