However, it appears that even Google may be hitting a ceiling. The Adwords system is based on an escalating bid war between competing advertisers. The thinking is that the cost for an ad click will rise with demand for a keyword market. While this has proven true in years past, this market space may be experiencing its first signs of decline.

According to an AP-NYTimes online ads earnings report article, Google “fetched less money per click on its ubiquitous online ads” in the 4th quarter of last year than expected. This was bad news for Google and their stock took a hit because of it. This comes at a bad time when Google is already in a portal war with Facebook.

However, Google wasn’t the only company that suffered in this regard. Microsoft/Bing also experienced a decline. Microsoft’s online services division “lost $458 million in the latest quarter” and was down 18 percent from the previous year.

Even Yahoo had problems. Their revenue was “$20 million below analyst projections” with the last quarter being their 13th quarter in a row of revenue declines.

Now everyone can speculate on the reasons for the declines above, which happened to occur in the 4th quarter, a time when ad revenue customarily experiences gains due to holiday shopping. However, the fact that all three major search portals have been hit by the declines is not a good sign. We may indeed be seeing the beginning of the decline of PPC marketing.

Bing leap-frogged Yahoo, who has been in a steady search decline for a number of years now. In fact, Yahoo inked a deal with Microsoft for Bing to power their future search results. So while Microsoft can certainly be happy with their new position of prominence, the result is not that surprising to industry insiders who have been watching the two companies form their alliance over the past year.

By the numbers, while Bing may be #2 in search, they still trail Google in a big way at a distant second. With their 65.1% share of the search market, Google doesn’t look like they need to sweat the competition anytime soon. Especially in the wake of recent events, with the launch of Google Instant, Google seems to be poised to dominate the search market more authoritatively than ever before.

This is the Internet we are talking about and fads are the staple of the day. With each new big thing appearing and disappearing at lightning speed, it is no wonder that there was some reluctance to fully embrace social media channels that managed to hover and thrive on the periphery of the Net.

But times are changing. The recent deal-making by Twitter to work with Google and Bing to dish out fresh tweeting content for search engine indexing is only the beginning of a social media shift.

Bing also recently worked out a deal with Facebook for indexing that social networking website’s content as well. Word is that Google is in similar negotiations with Facebook as this article is being written.

Seeing that Google and Bing are willing to pump resources and money into the social media space is enough to convince most skeptics. However, there are probably still those that can’t quite put together why this type of move marks a shift in the social media movement.

Portal Wars

Allow me to set the stage. We are still in the Information Age. The Internet, while being a great social tool, is still at its core, a haven for information. Search engines, when skinned down to their bones, are merely information gatherers and dispensers. Google’s patents, for example, are firmly grounded in information retrieval.

Since its commercial inception, the battle on the Internet has always been for eyeballs, and at the heart of the eyeball fight is the portal war. During its history, the portal war has revolved around leveraging information or content to attract and hold eyeballs.

Now the portal war has evolved somewhat over time, but the goals of this fight are still essentially the same today. The current number one website in the world according to Alexa Stats is Google.com. Keep in mind that this Alexa ranking is for the U.S. version of Google. Other Google websites, like Google Japan (google.jp) and Google India (google.co.in) also rank prominently in the world’s top websites.

This little tidbit of information is very significant. It reveals that Google is atop the heap in the portal wars. But Google is not alone in this regard. Other search engines are right behind, Yahoo is at #3 and Bing is at #5.

We all know that Google has made its reputation on providing the best answers to visitor questions. It does this by producing the most relevant search results based on a user’s keyword query. Its separation from the pack to now control a 70% market share of search engine users all hinges on this one strategy.

Google’s success in this regard has been so resounding that Bing recently changed its algorithm to essentially mimic Google in generating search results. With Bing recently working out a deal with Yahoo to begin powering their searches early next year, the Internet landscape is poised to pit Google and Microsoft together in the largest portal war we have ever witnessed.

A Matter of Speed

And this is the crucial point where the social media shift is occurring. You see, even with all of their current eyeball monopolies and market share, the search engines still face a profound challenge. That challenge is to stay relevant.

In our present Internet time, relevance is becoming a matter of speed. This speed is partly related to actual information retrieval, indexing and redistribution, processes the search engines continue to strive on improving. However, even with the most rapid indexing infrastructures, the search engines continue to function as dynamic archives.

This is good and bad. Good in that the search engines serve as vast directories of information resources. Bad in that these directories are massive, and even with the latest and greatest in automated information retrieval techniques, suffer from an information latency. Information latency is the delay it takes a search engine to aggregate, recompile and reproduce its data.

Early in the Internet segment of the Information Age, it was enough that search engines served as dynamic archives, or vast resources of slightly decayed information. However, with the rise of the social media space and in the face of more intense competition, the speed of information has changed.

Search engines like Google and Bing must keep up. During its reign as the top portal, Google has been a champion of archived information relevance. However, the demands of social media and a change in our behaviors, to mobile devices for instance, require faster results.

Google, for example, has always struggled to keep up with the headlines. News portals, like the NYTimes.com, have always served as better sources for current and up to date information. The blogs, tweets and profiles of social media give participants instant updates on their favorite people and topics. To stay relevant, the top portals had to devise a way to keep up with the times.

The Social Media Shift

It is at this point that we can address the social media shift. To do so, we must return to the social media space so we may fully appreciate its significance.

When it comes to the top websites in the world, social media outlets are no slouches. As of this date, the #2 website in the world is Facebook. Twitter is at #13. YouTube is #4 and Blogger is #7. While the latter two are owned by Google, the significance of this type of media is abundantly clear.

But let us take a closer look at social media. Always remember that, in the information age, content is king. The social media space isn’t exploding because it is simply a place for us to get together. The social media space is exploding because it is one of the best ways for people to stay informed with new content. Whether through producing and sharing videos, blogs, tweets or photos, the social media space is at the heart of the present and the Inter-Now.

So to resolve the problem of speed and win a victory in the portal war, Google and Bing have brokered deals with two of the world’s top social networking websites to gain access to their information, to tap closer into the pulse of the present.

The social media shift is therefore the mutation of the social media space into a replacement of the archive with the content of the present.

Google’s official blog says it all: “…real-time updates like those on Twitter have appeared not only as a way for people to communicate their thoughts and feelings, but also as an interesting source of data about what is happening right now in regard to a particular topic.”

Twitter has always had a search component of its own. But Google, and particularly Bing, are taking those tweets a step further. Bing has already engineered a seeding system for tweets that is designed to generate the best and most relevant results. The system is currently in Beta form and is available at bing.com/twitter.

More than anything, these major deals give a boost to the perception of social media. For a long time, proponents have been touting social media as the next big Internet thing. While the popularity of social media outlets has always been huge, there has been skepticism about the viability of these channels beyond buzz. Such skepticism now looks decidedly old hat.