The more things change, the more they seem the same. The battle-dance for dominance between Google, Yahoo and MSN continued through the first quarter of 2004 with all three making fairly significant changes in their operations. Webmasters and search engine optimization professionals have seen a Google algo update named Austin, struggled to understand the new Byzantine submission policies introduced by Yahoo, and have read about the once-navel gazing – now chest thumping 900lb gorilla, Microsoft’s inability to deal with being skunked at search several years ago. Search engine users have seen new looks at all three search tools and are (hopefully) enjoying a bevy of new features and services each player has introduced. A closer look at Google, MSN and Yahoo shows that each is offering extremely similar services to consumers as the next big-guy, only they are each doing it in slightly different ways. It also appears the Big3 are each trying to take a bit of the wind out of the sales at other commercial sites such as EBay, Priceline and ABE Books. The prize is the lion’s share of a pot-o-gold representing over $10Billion in revenues and control over the flow of commercial information on the Internet.

If 2003 is considered the year SEARCH matured as an advertising medium , 2004 will be the year search engines grow into their roles as an advertising medium. Hence the most recent change in the world of search, Google’s new interface.

Google 2004
Google has changed a lot over the past year. The former Rebel leader appears to have joined the Empire, or at least is toying with the dark side of The Force in a bid to make a great deal of money. Rumoured to be issuing an initial public stock offering, Google’s new look seems to be designed to promote services such as AdWords and Froogle, two of Google’s major revenue generators while demoting the Google Directory run by the beleaguered volunteer-driving Open Directory Project. Google’s new front-page has dropped the tabs that used to run across the top of the search-text window and replaced these tabs with straight text-links. The new links lead to (web) (images) (groups) (news) (froogle) and (more>>), with the Froogle link accentuated by a “new” image. Froogle is Google’s catalogue shopping index, listing product catalogues from companies around the world. While it is still currently free to submit a data-feed of your product catalog to Google, AdWords advertisements are posted to the right of the page on Froogle, making paying for an advert the best way to differentiate a business or product from the others. Another change Google has made is in the number of AdWords listings that are displayed when a keyword phrase is searched. Most searches for commercially popular keywords will produce a page with about twice as many AdWords adverts. The colour and tone of how AdWords advertisements are shown has also changed with the removal of the coloured boxes that graphically separated the various ads. This move makes the ads seem less distinct from the traditional listings and may serve to increase click-through rates. Perhaps the biggest change behind the scenes is that Google is obviously backing away from the Open Directory Project as listings at the volunteer run directory are not being updated as frequently as they had in the past. Google used to give a slight ranking bonus to sites that were listed in the Open Directory Project as the ODP is a live-human edited directory and the site in question had to be reviewed by a trained ODP editor. The Google directory was extremely useful to SEOs as a means of seeing if a site was banned by Google or had simply been demoted in the rankings. The Directory displayed an indication of the PageRank Google had assigned a site. If that PageRank (as shown in the Directory) was zero, it was often assumed the site had been de-indexed on the main search engine. If the PageRank displayed at the Directory was visible, it was often safe to assume the site remained in the index and would eventually move up again.

The bottom line with Google is that it is becoming more visibly commercial then any other time in its history. In order to draw extra attention to a listing and to compete against the big players who tend to have large enough link-densities to drive smaller players out of the Top20, many small businesses will feel the need to turn to AdWords. Google is hoping to take a portion of the online-shopping market with Froogle and is poised to threaten sites such as EBay and Priceline.

Yahoo 2004
Two items dominated news from Yahoo this quarter. The first was Yahoo’s introduction of its own in-house search engine in mid-January. For the past two years, Yahoo has primarily pulled its results from the Google database. As Overture and AdWords are direct competitors, and the Inktomi database is as strong as Google’s, Yahoo switched from outsourcing results to self-generating results. This move has been a long-time coming. Yahoo spent all of 2003 preparing for 2004. Through a series of acquisitions of several smaller search tools such as Overture, Inktomi, AlltheWeb and AltaVista, Yahoo now controls the largest set of search related technologies in the field. While still a portal-type site, Yahoo is busy paring down its interface in order to present a less cluttered window for search users. Yahoo has the most “extra” incentive services for its users such as Yahoo Shops, Yahoo email and the delivery of Personalized items such as business, sports and general news. Yahoo leads the way when it comes to service-extras but recently followed the path of LookSmart as it introduced a new paid-submission service that blends a Yahoo review fee with an assigned cost-per-click for each site a small business webmaster submits to the new Site Match program. Larger sites are assigned a site-specific fee based on the number of pages indexed by the search engine through a live XML data-feed through the Site Match Xchange program. While Yahoo continues to offer a free-submission option, the benefits of paying for submission often outweigh the savings of free submission in many ways, the most important of which is the frequency of spider visits afforded to sites submitted via SiteMatch or Site Match Xchange. Yahoo introduced this new system in the hopes of consolidating what was six unique submission policies (one for each search-property owned by Yahoo) into one over-arching policy. The SEO jury is still out on whether this new system will produce greater benefits for client sites but thus far, the reaction in SEO forums has been one of concern boarding on outrage. Yahoo also recently introduced a new Yahoo News feature that is very similar to Google’s award winning GoogleNews. Yahoo is also trying to mount competition to Google’s Froogle with the purchase of European comparison shopping tool, Kelkoo. Yahoo and Google are in a race to produce the most relevant LOCAL SEARCH results. Lastly, Yahoo is about to introduce a Blogging service currently being tested in Korea, much like Google’s current Blogger feature.

The bottom line with Yahoo this quarter is simple. Inclusion will become more expensive for everyone and may present severe competitive disadvantages for small business owners. Yahoo is trying to grow and appears to be using Google as its main benchmark of growth. While still the clear leader in technologies, Yahoo is playing a catch-up game against Google.

MSN 2004
“Frankly, Google kicked our butts…” Bill Gates – Davos Switzerland, January 2004. Bill Gates has never been called a sore loser, not for long anyway. This is likely because his company, Microsoft tends to avoid leaving any other winners standing after it takes an interest in a technology or sector. According to most reports, Gates is furiously pushing for a bigger, better and unmatchable search tool… NOW! While he may have to wait until 2005 for MSN’s new technologies to be ready (far later than reported here last week), his message has been heard loud and clear in Redmond Washington and around the search world. MSN is developing a search tool rumoured to be modeled on the best successes of others in the field. When introduced, the new search engine will have the natural language intelligence of AskJeeves, a feature promoting Blogging, a product and service search, differing levels of localization and personalization, and of course, a News aggregator, much like Yahoo and Google.

The bottom line with MSN remains to be seen but we know its owner(s) have the largest corporate resources in the world to draw from and have no moral issues or domestic legal fears about using this strength to subvert (and often subtract) the competition.

Others 2004
What about the rest of the major search tools out there? As far as independence goes, the pack has been thinned with considerable gusto by the Big3. Two years ago there were several independent algorithmic search tools. Today we can only think of Lycos and Ask Jeeves, both of which are struggling to define themselves with new technologies and tools. Another interesting search tool that should get more attention is Vivisimo however they seem to be focusing on producing industry or sector specific search tools more than they seem to be focusing on producing a search tool that could challenge the Big3.

Overall Bottom Line
Search as an application has become the second most used tool on the web, after Email. Search has been discovered by advertisers as the least expensive means of reaching a pre-targeted consumer audience. Put these two factors together and a new reality emerges. As an advertising medium, search is about to become a lot more expensive. There are a wide array of new services, features, listing opportunities and, of course fees. Plotting a search engine advertising campaign has become far more intricate as there are now enough unique options to distribute a client’s message through. Search Engine Optimization has become far more technical and difficult and costs associated with new challenges are likely to be passed to new clients as SEOs move into their new roles as advertising executives. There are several new tasks per client-file for SEOs to work through as a strong campaign must combine great text with strong link-building services.

The world of search will become much more animated over the next three months and it will be interesting to compare this quarterly report with the next one in early July.