Google's 10 toughest rivals

Apple, Microsoft and IBM among tech firms poised to ramp up competition with Google in 2010

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4. Facebook

Google has been eyeing the rapid rise of Facebook -- which has attracted 350 million active users in just six years -- with concern. Although venture-funded Facebook's financials are not publicly available, analysts estimate that its 2009 revenues will top $500 million, much of it from an advertising deal with part-owner Microsoft, another Google rival.

Social networks

The Google/Facebook rivalry is based on the question of where users will get their information in the future: in search or in social networks?

Google is worried enough about users turning to their social networks for information and advertising that its sidled up Facebook rivals MySpace, LinkedIn and Twitter for various applications. Indeed, rumors of Google buying Twitter were rampant this year. Google also has its own social networking application called Orkut, which was upgraded in December. And it offers Google Friend Connect, a tool for Web publishers to add social networking content to their sites, in direct competition with similarly named Facebook Connect.

Meanwhile, Facebook has sought out relationships with several arch-enemies of Google, including Microsoft and Yahoo. Back in 2007, Facebook sold a 1.6% stake to Microsoft rather than Google and chose Microsoft's search engine for its site. Facebook also has added features this year such as Open Stream API, which allows developers to export Facebook data to other applications. Two outstanding issues facing Facebook in 2010: protecting the privacy of users' information and keeping hackers at bay.

5. Hulu

Google has owned YouTube for four years, but it hasn't figured out a way to turn a profit from the fast-growing video streaming site. YouTube's closest competitor in this segment is Hulu, which has the benefit of deep-pocketed media ownership.

Video streaming

Online video usage exploded in 2009, breaking records in September with more than 168 million users in the United States. The question for 2010 is whether YouTube will continue to dominate this market.

YouTube is best known for featuring video clips and user-generated content. The Web site attracted more than 126 million viewers and served up 10.3 billion videos in September, according to Comscore. YouTube's weakness: it doesn't make enough money to cover its massive network bandwidth costs. Credit Suisse estimates YouTube will lose $470 million in 2009.

Hulu is second to YouTube, with 39 million viewers and 583 million videos viewed in September, Comscore reported. But Hulu only provides professionally created content from its owners, which include Fox, NBC and Disney. Though not profitable, Hulu may start charging for its content in 2010, which would shake up this market.

6. IBM

Google's rivalry with IBM could heat up in 2010 with the release of new collaboration tools such as Google Wave. With IBM, Google is up against a financial powerhouse; IBM has racked up more than $95 billion in sales in the last year and reported profit margins between 43% and 47% in each of the last four quarters.


In the midst of a deep recession, more U.S. corporations are experimenting with low-cost hosted collaboration tools such as Google Apps.

Google Apps is a suite of hosted applications including e-mail, calendaring, instant messaging and document sharing that Google sells for $50 per person, per year. Google Apps competes against IBM's Lotus Notes and Microsoft Exchange, and it has attracted more than 2 million businesses in the last two years.

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