Search engine marketing firms have reported much lower than expected results from contextual advertising campaigns, comparing click-throughs and actual purchases to the numbers shown by banner advertising. For the accountants and business planners at Google and Overture the news couldn’t come at a worse time. Both Google and Overture are depending on Contextual Advertising programs as significant revenue sources this year. If the bottom drops out of this emerging market, as it has from the once popular banner advertising market, both search firms could take a pretty large financial hit. Read more…
More interesting developments in the world of SE business…
MIVA, the popular shopping basket system has been purchased by PPC search tool FindWhat.Com. While being a fine PPC search tool, FindWhat.Com has never been a major player on the search engine scene however they are a notable entity. Why would they purchase MIVA?
StepForth staff have two guesses.
-> The first is FindWhat.Com wants to challenge Google’s new E-Commerce search tool, Froogle with their own E-Com tool.
-> The second guess has FindWhat.Com bulking itself up to make a more attractive acquisition target for a larger player such as MSN or, even Google itself.
The one thing we are pretty sure of is that this round of mergers and acquisitions is going to continue into 2004.
According to a recent study from Maryland-based, Context-Based Research Group, three of five search engine users can not tell the difference between a paid listing and the traditional un-paid listings. In May 2002, the US Federal Trade Commission developed voluntary guidelines for search engines to follow that were supposed to clarify for end-users which ads were paid and which were organic, (or free). Read more…
Size is the latest salvo fired in the search engine wars. Last week, Overture announced that its recent acquisition, AlltheWeb had expanded its database to cover 3,151,743,117 pages and had grown larger than Google’s database by about 68Million pages. Google responded yesterday by quietly announcing that it is now spidering 3,307,998,701 on an active basis. In the world of search engines, size matters from an end user perspective. The more pages in the database, the better chances of finding the information you are looking for.
Google and AlltheWeb have a history of competing to be the biggest database that goes back to 2001. This time however, the battle will be a bit more interesting as Overture also announced that AlltheWeb is introducing a stronger ranking algorithm in the coming weeks in an ongoing attempt to produce more relevant results than Google. With the coming integration of AltaVista and AlltheWeb, both owned by Overture, (which in turn is owned by Yahoo), this latest skirmish in the over-all search engine war will be a long and hard-fought one.
The federal Digital Millennium Copyright Act (view the entire act here) currently holds any search engine liable for linking to a web site which may be infringing copyrights. As a result, if a search engine refuses to remove all links to an infringing web site, the copyright holder can sue. What is wrong with this? Search engines such as Google with over 3 billion web pages indexed simply do not have the time or the legal backing to investigate every claim of copyright infringement. Despite this obvious limitation, however, Google is forced to review and rule on all complaints summarily. For example a claim by the Church of Scientology requested an anti-scientology site be removed because it contained copyrighted excerpts from their writings. When Google promptly removed the web site, free speech advocates made quite a commotion, citing that such censorship reduces the freedom of speech that the Internet naturally provides . (click here for this story)
Should search engines have to deal with this or should all legal preceedings be focused on the infringing web site? The search engines don’t believe they should have any liability. Unfortunately, the Digital Millenium Copyright Act cannot be reviewed simply on the basis of this claim. In the future there are chances that a culmination of other unrelated claims will prompt a review, but until then we just may not know what we are missing on the search engines.
What will Microsoft do to increase its presence in the search engine industry? For a long time MSN has barely been a going concern in the search engine industry, but now with Google whispering about a ’04 IPO and Yahoo! buying Overture and Inktomi, there doesn’t seem to be many options left for the software giant. Here is some insight from MSN product manager Lisa Gurry:
“Lisa Gurry says the company plans to move aggressively to develop its in-house search expertise while continuing to rely on Yahoo as a supplier. ‘We will make the right investments to stay competitive in this space,’ says Gurry.” (USA Today)
Does “make the right investments” highlight a potential buyout of a known search service? This target has long been debated but the field of potential targets have narrowed considerably if we rule out a major buy of Google or Yahoo! by Microsoft.
“For the record, Gurry says Microsoft is not considering buying Yahoo or Google ‘at this time.'”
Who does that leave? Our money is on an acquisition of Teoma/AskJeeves. Teoma is really the only search engine that I can think of which has demonstrated the potential to innovate and maintain the clean search image that Google so quickly rose from. I suppose, however, that this prediction is a no-brainer since there is really very few to pick from.
Till our next news.
– Ross Dunn
StepForth SEO Manager Jim Hedger discusses his thoughts on a potential IPO at Google with Sally Hardcastle of the BBC World News.
Listen to this BBC interview (in MP3 format)
Here is the interview transcribed:
StepForth’s BBC Interview
Sally Hardcastle (SH) asks what Jim Hedger (JH) thinks of Google’s potential public offering:
JH: “I think the Google IPO is the most watched game in town right now. I don’t think they will be going for it until late next year, it would make sense for Google to issue an IPO, they certainly need to beef up their warchest to fight off MSN and Yahoo!, and we know that MSN is investing about 50 million dollars this year alone in their search feature. Google is the #1 search engine in the world and search is, this year, a 2 billion dollar a year industry and is projected to be a 7 billion dollar a year industry within the next 5 years. So, there is a number of companies that want a share of Google’s action.”
SH: “What kind of share does Google have of the market?”
JH: “Either through someone entering www.google.com or through Google’s distribution to other search engines about 76% of all search traffic goes through the search database.”
SH: “Why has it been so successful?”
JH: “Mostly because it is concentrated on focusing on relevant results with a very clean interface,”
SH: “Don’t use the jargon; they just keep it simple and it works.”
JH: “Yes and that is very appealing to search engine users.”
SH: “Now you are saying that others are batting down the door, but the others don’t have this simple way of doing things. Can they change their act? I wouldn’t have thought they could.”
JH: “Oh I think they are trying to change their act, MSN specifically is trying to introduce a new search engine probably within the Spring of 2004, thats going to be very simple, stripped down, much like Google.”
SH: “So is 2003 a pretty crucial year for this business? Which I should say is obviously an important business nowadays.”
JH: “Yes, 2003 has been the year of big changes. I guess the business end of search engines has dominated in 2003, with mergers, acquisitions, and all of the companies, including Google trying to grow as big as possible quickly, to fend of their rivals. But 2004 is going to be radically different; I think we are going to see a number of the smaller players either absorbed by the big three or simply put out of business.”
– Ross Dunn
Overture has introduced a new feature that will allow its paid advertisements to come up under a wider range of keyword phrases. Advertisers will be able to choose between two unique listing formulas, Phrase Match and Broad Match. Phrase Match will allow listings to be displayed when a portion of a keyword phrase appears in the search-user’s request. For instance, when a search engine user types “Good Toronto Tours”, a site with the keyword phrase Toronto Tours would be displayed. Currently, advertisers bid on specific keywords and phrases and only appear when that phrase is entered directly. The other option, Broad Match will serve a listing when a portion of a keyword phrase is used in the search query, regardless of the order of words. For example, “Tours of Toronto Ontario” would produce a site bidding on the keywords Tours, Toronto or Ontario.
– Jim Hedger
Two weeks ago we wrote about a new search tool, yeswacked.us. Our editor noted the silliness of the name, as did several others. Late last week, the site designer contacted us to let us know he had changed the name and made the search tool easier to use. While the tool was already easy to use, the redesign makes viewing results much simpler on the eyes. The old design opened four results pages on one page, (using FRAMES). Now, results are shown on two pages, making each set of listings readable without the need to scroll to read the results. The new name fits well, yurweb.com. It is worth a look.
– Jim Hedger
Someone, somewhere is going to write a great business book about the search engine wars of 2003 however, their publishers will likely send it back for a rewrite because business books are not supposed to be more interesting and action packed than a Tom Clancy spy thriller. For a recap of previous events (and if you haven’t been keeping up, you’ll need it), please visit the StepForth search engine news site and check our back issues. By 2004, the search engine world will look very different than it does today, starting with Yahoo. Read more…