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Thursday, February 27, 2003

He's back. Already. Bearing breaking news and commentary.

Blog-boy just couldn't resist.

Posted by Andrew Goodman




WRONG!

ClickZ contributor gushes about the wonders of skyscraper ads because "larger units are more visible."

Take a cold shower, Tessa.

Posted by Andrew Goodman




Overblown: FAST Poses Weak Threat to Google

Oslo, Norway-based FAST is certainly basking in the spotlight this week thanks to the news that Overture bought its web search division. While many people are debating the merits of Overture's acquisition, I would like to argue that it doesn't matter who Overture buys; FAST still is an irrelevant search engine. Industry insiders have been saying for years that FAST has the potential to be a Google killer. To which I say "fat chance."

Let me explain.

As the webmaster for Traffick.com and several other highly trafficked sites, I review many different server log files and analyze the referring search engines every month. Despite having similar rankings for many prominent keyword phrases, the traffic received from Google vastly outnumbers that of FAST.

For example, in January 2003, Traffick.com had 10,095 referrals from Google. And we received a mighty 46 referrals from FAST. 'Nuff said.

Does anyone out there receive considerable traffic from FAST? If so, let me know!


Posted by Cory Kleinschmidt




Blogging FAQ

Friends, family, and random people carrying bags of Chinese take-out on the Spadina 77A bus have been asking: "what in the world is a weblog?"

Problem is, many of the famous blogging people's answers fail to put things in proper perspective for the average sensible person, who suspects that a blog is not much of anything.

Q. Isn't a weblog just about the same as publishing pages on a web site? What's the difference?

A. Personally, I feel that the uniqueness of the blog "form" is exaggerated. One can do very much the same online without necessarily using a piece of blog software or knowing that one is blogging. However, certain conventions have grown up around blogging - and blog software builds in certain features - that makes it very popular and handy as a notebook, diary, news brief tool, or "annotated commentary" on the day's events. Blog software dates and times automatically, allows one to post to the web quicker than most forms of web publishing (though a good content management system would do the same, but who can afford, spend the time on, or understand content management? not most bloggers!), and archives are organized automatically by the software. It's a real time-saver and a communications aid - but also easy to install on one's own web site with a unique domain name, so you get the feeling of ownership that one won't get from things like free Geocities web sites, message boards, and so on.

Q. So it's basically a glorified message board?

A. It's certainly glorified. One of the conventions that has grown up, though, is that the person "blogging" the info has more of a voice. It's not so much moderated discussion as personal publishing that may (or in many cases does not) allow commentary. Less free-for-all, no need to anoint "moderators" - simply, in most cases, a different emphasis. But strictly speaking, is it necessarily that much different from a message board? No, not any more than a sonnet is different from a ditty, or a frisbee is different from a boomerang. You could probably play frisbee with a boomerang or a pizza box if you wanted to.

Q. Are weblogs necessarily incestuous? I see a lot of emphasis is placed on maintaining lists of links to the other weblogs people recommend.

A. Another odd convention. The growth of this trend might have accelerated in part when webloggers cottoned on to the fact that they could confer authority on one another that might help with Google rankings. Chalk up yet one more reason that Google felt the need to bring the technology in house. So it could have a better chance of differentiating between innocuous blogrolling and link farming.

Why don't you shut up now?

I think I will. Thank you for your time.

Posted by Andrew Goodman




Wednesday, February 26, 2003

Blogooogleblogoogleblogooglegoo!

What's a blog? I guess a few million people are asking that right now. (You're soaking in it.)

So, since a search engine just acquired the world's leading blog utility, did you know there is actually a Search Engine Blog?

Of course there is a blog about Google, too. Several, actually. Perhaps we need a metablog. That would be a real time saver.

So many questions! What will the new theme of sudden-household-name Evan Williams' weblog, if he ever blogs again? Can he really get away with saying "I'm too busy to blog anymore?" What will people say when his entries say things like "I'd love to share a little bit about my day, but it's under NDA."

If you are reading this, of course, you probably didn't need to be told about this endless circle of self-congratulatory blogocity.

While I'm at it: John Lawlor, a marketing consultant who has recently been advising businesses on the practical and profitable uses of weblog communications, has launched BlogAnswerMan.com to personally answer questions for the perplexed.

When I get confused, I always try to follow the wise words of Abe Simpson: "the fax machine is just a waffle iron with a phone in it!"

Posted by Andrew Goodman




Gloves are off in the European pay-per-click race

Jonathan Bunis, Espotting Media's COO, comments on Overture's recent announcements to acquire AltaVista and the search division of FAST:

---------------------------------------

"Overture's recent announcements bring it back to its original portal roots as a destination site. They are now in direct competition with their distribution partners. Espotting, already the European market leader, now also becomes the only truly independent pay-per-click player in Europe. This opens up opportunities with new affiliate partnerships. We have already received calls from companies who are fearful about continuing their working relationship with Overture.

"Market reaction to the news has been negative. Overture's shares tumbled yesterday (25/2) closing at $15.44 after the announcement of their agreement to acquire the Web search unit of Fast Search & Transfer. When the company announced the AltaVista takeover, Overture's market value plunged by 32 percent. Further to Overture's announcements, Goldman Sachs on 25/2 lowered Overture's EPS estimate for 2003 to $0.60 from $1.02.

"Espotting celebrates its 3rd birthday on 28th February. We now operate in 10 European countries, delivering targeted leads to over 14,000 advertisers by powering 700million searches a month through our partnerships with site such as Yahoo! Europe, Lycos and Ask Jeeves. Our relationships with FAST and AltaVista are ongoing across Europe. In January, Espotting was voted Best Paid Placement Service in the Search Engine Watch Awards."

Unquote.

Posted by Andrew Goodman




Tuesday, February 25, 2003

Overture Grows Again: Grabs FAST's Internet Business

The non-enterprise side of FAST Search and Transfer has just been snapped up by Overture.

Translated, this means that three major competitors to Google in the business of crawler-based, algorithmic search of a whole web index have been swallowed up by larger companies in the past couple of months. Inktomi became part of Yahoo for approximately $235 million, AltaVista sold to Overture for approximately $140 million, and now, part of FAST joins Overture as well for up to $100 million depending on future incentive payments.

Google's other competitor, Teoma, was also acquired last year, by publicly-traded Ask Jeeves, which is still hanging on profitably but which also seems now more than ever to be an acquisition target.

We have to feel vindicated. In reviewing the search space just over a month ago, Traffick saw limited differentiation and appeal in the offerings of the also-rans, opining that AltaVista was "yesterday's search engine" and that "it would be better for AV to scatter its ashes and make way for a regrowth of something fresh and hot." We gave a lukewarm response to FAST's positioning as "#3, supplying search results to the #4 portal," with the bright side being that "custom work for the enterprise sector is a nice honest living." FAST will continue to do business in the enterprise sector - which, surprise, suprise, was generating 75% of the firm's revenues - after selling off its Internet divisions.

It's tough to sort out who wins and who loses here. Long term, consumers lose different sources of innovation, and must trust in the almighty powers of Google. Metasearchers will have fewer and fewer independent, unpaid indexes to include in their metasearches.

Short term, Overture shareholders suffer, since Overture's acquisitions, intended to keep them even with Google in the race for advertising dollars, will no doubt entail integration headaches and accounting ambiguity (not a good thing in today's market environment).

It's a wash for Google, I think. The demise of their competitors is something that already happened, and this is merely post facto recognition of that reality.

Perhaps the biggest winners are advertisers. Consolidation of some me-too search and paid inclusion offerings under the aegis of Yahoo and Overture will make it easier on advertisers and marketing consultants. They'll deal more and more with the big guys: Overture, Google, and Yahoo

So who are the up-and-comers in the search space? Given the current powerful dynamic, a better question is probably "who are the up-and-comers or lingering threats in the pay-per-click search space?" LookSmart, Search123, Business.com, and FindWhat will all make their share of noise in the coming year - and numerous niche players and some also-rans will try to get noticed in a business increasingly dominated by the big two.

The Big Two - in terms of brokering keyword-targeted online advertiser dollars - are without question Google and Overture. They are two very different companies, but clearly, neither is going away anytime soon.

Posted by Andrew Goodman




Monday, February 24, 2003

Mmmmmm....bursty

Is it just me, or is this guy really smart?

Apparently, his latest research could aid in organizing our email as well as improving search engines.

Dr. Kleinberg, please don't stop!

Posted by Andrew Goodman




Friday, February 21, 2003

Microsoft Re-Ups with Inktomi

Huh. Maybe Microsoft won't be buying FAST after all...

Posted by Cory Kleinschmidt




Thursday, February 20, 2003

I Choose Google News

At first I dismissed Google News as a clever but unispired way of getting one's daily news. But, since the hubbub of Google buying Blogger and how it might hook into Google News, I've taken an interest in Google's automated news page. It really is quite remarkable considering how powerful and intuitive it is, and considering the fact that a computer assembles the content by determining an article's relevance among 4,000 news sources.

The thing that really strikes me about Google News is just how much power local newspapers and independent news sources have now that they are routinely linked to from one of the world's most popular web sites. What are the odds that someone in Missouri would read feature articles from the Hartford Courant if it weren't for something like this?

And the losers in all of this are certainly the cable network news sites like CNN and MSNBC. I don't see Google linking to them very much -- not yet, anyway. Now that news seekers have such a unique, diverse and powerful tool at their disposal, the cable news sites just don't seem as relevant. Still, time will tell how it will all play out.

In any case, I know that I'll be frequenting Google News a lot more. And, if and when the Blogger acquisition does actually integrate somehow into the News page, it'll all be that much more interesting.

Posted by Cory Kleinschmidt




Tuesday, February 18, 2003

Overture FAQs about AltaVista Aquisition

Details are scant, of course, but Overture has posted a FAQ page about the proposed buyout here.

Every question seems to have the same answer, though:

"AltaVista.com Web site provides Overture with a robust, live platform for developing, testing and quickly launching new products and services that will add value for both our advertisers and partners, such as paid inclusion products and a leading algorithmic search capability."

So all you suckers still searching AltaVista are now search engine guineau pigs. Enjoy!

Posted by Cory Kleinschmidt




The Changes Keep Coming: Overture Swallows AltaVista

Overture announced today that it will buy AltaVista, in another major development in the search business. Now that web search is becoming more reliable and profitable, the moves have been coming fast and furious.

First Yahoo buys Inktomi, then Google buys Blogger, and now this. These are exciting times, my search engine friends. What does it all mean? According to their press release:

"The acquisition will enable Overture to offer a significantly enhanced Web search solution to portals, Internet service providers (ISPs) and other destination sites, as well as additional marketing opportunities to the company's large base of advertisers. AltaVista's advanced algorithmic search technology, which crawls the Web and returns relevant search results in response to users' queries, strategically complements Overture's market-leading technology in commercial search. Additionally, AltaVista's Web site will allow Overture to test and refine new products and services in a live setting, and its suite of search-related technology patents will help support Overture's entry into algorithmic search."

I don't quite grasp how having control of a spider-based search engine allows it to "signficantly enhance" its offerings to its portal distribution partners like Yahoo, which already owns Inktomi, so what they're probably saying is that Overture realizes that its clout in the PPC space is waning and that it had to get into the search business or die a slow death.

A few days ago, I had been predicting that slow death after Overture raised its minimum bid amount to 10 cents, but now that it has AV, all bets are off. The aquisition leaves FAST as the sole remaining major algorithmic search engine that is independently owned.

Which probably means that it will be owned by Microsoft in a matter of days.

Posted by Cory Kleinschmidt




Monday, February 17, 2003

Just How Scarce is News about Microsoft?

For the low, low price of $399 a year, you can subscribe to Microsoft-Watch, an e-mail newsletter produced by veteran ZDNet reporter Mary Jo Foley that purports to offer breaking news about the software titan before anyone else knows about it. Hmm, so I can pay 400 bucks a year for something I can get for free or much cheaper in hundreds of other online publications. Awesome!

The lead story on the site is a brief post referencing a Newsweek story about threedegrees, Microsoft's new software aimed at teens and social groups. Wow, talk about exclusive content!

To be fair, Foley's efforts seem respectable, and they do have informative, free content, too. But $399 seems like a high price to pay for information that is so widely covered ubiquitously by so many others. It seems like an odd publication for Ziff Davis, which gets most of its revenue from offline mags and online ads. Maybe they're testing the waters of charging subscriptions to online content, faced with declining offline profits?

Posted by Cory Kleinschmidt




Google Groupies

Is it just me or is this site a pandering ploy to grab Google's (and Moreover's) attention? It appears that the site, Google Village, is part of a network of sites owned by an outfit called Verity Intellectual Properties Pty Ltd of Australia, which seems to be creating a network around topics like Google, something called Personal Brain and some abstract concept called Technacy. Uhhh, OK.

So far, the company, using a bevy of .info domains, has managed to get Moreover to buy into their ploy, and Google probably will too, as it looks like they've been very good about optimizing especially for Google. Here's a sampling of Verity's "revolutionary" philosophy:

The company is a private company owned by Mr. Mel Olsen, a businessman in Sydney, Australia, who is seeking new ways of doing business, and seeking to change his business model from those types of businesses where he is required every moment of each day, to drive money earning to a business that earns money at any time of day or night where effort of the business owner and/or manager is not a bottleneck. Mel has hired Dr Elwyn Jenkins, who has had a number of years experience in building ideas on the Internet, to drive much of the activity. However, Verity Intellectual Properties Pty Ltd does have some other activities planned that are outside of this first and key employee.

The main purpose of Verity Intellectual Properties Pty Ltd is to develop a body of knowledge surrounding the tools of technacy that is second to none on the Internet. Verity Intellectual Properties Pty Ltd is in its infancy and does not as yet have any site that is "authoritative" on subjects. However, it is working towards being recognized as such over time. You will see developed over a period of time knowledge on the following tools of technacy in this first phase of the businesses' development...


You show 'em, Mr. Mel!

Posted by Cory Kleinschmidt




Sunday, February 16, 2003

Blogger + Google = Bloggle?

The world of online publishing was rocked Sunday when news broke that Google has snapped up the king of weblog publishing, Pyra Labs, which operates the Blogger service. The news is significant for a number of reasons.

First, as any observer of the online publishing space has noted, blogging is becoming more and more mainstream. Big companies like software maker Macromedia are chumming up to their customers by establishing personal weblogs maintained by PR people and product managers. Businesses are discovering the benefits of blogs, and even though blog publishers have yet to hit it big, many analysts believe it's only a matter of time until that happens. So, Google's acquisition will likely push that trend into overdrive.

Second, Google has been looking for ways into increase its revenue and customer base, and it has done quite well with the pickup of Blogger. Now Google has a stable of almost a million bloggers, many of whom pay $35 for Blogger Pro, which provides more advanced features than the basic, free version.

Bloggers everywhere are surely rejoicing at the news. Blogging just gained overnight recognition as a viable, credible form of publishing, and users of Blogger (including Traffick) can likely look forward to a slew of new tools and resources to make publishing even easier and worthwhile.

Posted by Cory Kleinschmidt




Wednesday, February 12, 2003

It Probably Just Looked Better in the Shot

I saw a Hertz car rental ad tonight, telling us to go to Hertz.com and showing someone typing this into Internet Explorer on an iMac. Wouldn't you think that it's Avis (#2 so we try harder) that should align itself with Apple... not Hertz? Just what we always suspected, it's these touchy-feely-Macintoshy creative types that run these ad agencies.

Posted by Andrew Goodman




Tuesday, February 11, 2003

And No Pepsi Anywhere in Sight

Google was just voted Brand of the Year, beating out Coke, Apple, and Starbucks. (Why am I getting hungry all of a sudden?)

This must explain why friends don't snicker when I show off my Google latte mug. Google seems almost cool, or something. A far cry from the reaction I got when I wore that "Linux hackers make better lovers... no really" t-shirt to a Creed concert.

(Disclaimer: I have never worn such a t-shirt, nor would I. Nor have I ever attended a Creed concert, nor would I. This was for entertainment purposes only. But I do have a Google latte mug.)

Incidentally, I fell victim to another diabolical Godin scheme, and ordered a twelve-pack of Purple Cow books, to be delivered in a jazzy purple milk carton. Apparently I'm supposed to keep one copy, and hand out the other 11.

Posted by Andrew Goodman




Friday, February 07, 2003

Canadian Sneezer Denied Purple Cow (For Now)

Drat that clever Seth Godin! His new book, Purple Cow, is being given away free to readers of his Fast Company article (as long as you pay shipping) for a limited time only.

I'll have to wait until I can actually buy it, though, before I can write that glowing review, since it's only available to U.S. residents "due to shipping costs" and no doubt a few restrictions on the export of agricultural products.

Anyway, the article looks good. Achoo!

Posted by Andrew Goodman




Overture's Insatiable Cash Machine Explained

Some further thoughts on the Overture price increase (minimum bids are now 10 cents). Price increases have been recurring theme since paid inclusion and pay-per-click search engine advertising began to be a serious force. The response from smaller businesses and grassroots webmasters is, predictably, negative, while larger businesses wouldn't know a five-cent bid if it stayed the night in the guest house.

On one hand, I think the concern tends to be exaggerated. With average prices per click hurtling towards 50 cents at Overture, and already exceeding that at niche "B2B directory" services like Business.com, 10 cents is not yet anywhere close to a breaking point.

But the increase is significant and disturbing on a number of levels.

First, Findwhat, one of Overture's strongest second-tier competitors, has been using its strong ROI as a selling point - attributing that ROI not to higher-quality traffic (since it usually isn't), but to the significantly lower price per click. Even admittedly diluted traffic can be a relative money-maker when you can bid half (or much less) what you'd have to bid at Overture. The Overture increase, then, seems likely to increase Findwhat's current advertiser base (of about 20,000), as Findwhat is still willing to take bids as low as one cent per click. Other second-tier players can also make hay from the perception that Overture is getting pricey.

Second, the announcement looks like a desperate and ill-timed attempt to hold up the company's stock in the wake of a warning that revenues will be ahead of schedule this year but profits may be significantly below forecasts. At various times Overture has wanted to tell the analysts "we have pricing power." And it usually seems to work in convincing them.

Overture indeed has pricing power, but that brings me to the next point. Its pricing power is created by artificially restricting the depth/width of the keyword inventory available, thus forcing more bidding wars on popular terms. Bidding wars are exacerbated further by the need to bid high enough to appear in fourth spot or higher (premium position on Yahoo, etc.) to see any significant traffic. Sixth or seventh won't generally cut it. It boils down to a key difference between the way Overture and Google sell keyword inventory. Overture does not have flexible phrase matching options (such as broad matches), so every match must be an exact match (or either an exact match or a match generated by their proprietary and mysterious Match Driver software). As a result, a great deal of lesser-known keyword inventory simply goes unsold. There is little reward, and some significant barriers, facing the advertiser who wants to seek lesser-known keyword inventory to enjoy the cheaper prices possible when one escapes bidding wars.

The change won't affect the majority of the advertisers - or to put it perhaps more accurately, it won't affect the minority of advertisers who comprise the majority of Overture's revenue. But it does illustrate the pressure facing a public company to meet targets at all costs. The question is, is this short-term thirst for cash and Wall Street acceptance in conflict with the long-term interests of advertisers, and ultimately, of Overture itself?

Perhaps most disturbing of all is the tendency of those at the higher levels of the advertising and publishing business to disdain the "mom and pops" - although one is happy to take their money, it doesn't seem cool to speak well of them. But the whole principle of pay-per-click advertising is that it's a direct marketer's dream. This is a world where you're not supposed to ask someone where they went to school or what their annual budget is. What's supposed to matter is response rates and ROI - for anyone.

A lot of so-called mom-and-pops are successful examples of the millionaire next door. And quite a few other small startups are driven by successful semi-retired or career-shifting executives, marketers, and technologists who may indeed have worked inside the bowels of the largest familiar-brand-name companies. The worst thing that could happen to the pay-per-click middlemen would be to lose their passion and sense of what makes search engine advertising different from the traditional advertising business. Less friction, better customers, direct response. For anyone and everyone with a buck and an idea.

Posted by Andrew Goodman




Bloggeurs Extraordinaires

Cherchez-vous un weblog au sujet de Google, en francais? Look no further than the 1ere Position weblog - Special Google Edition.

Posted by Andrew Goodman




Thursday, February 06, 2003

Beginning of the End for Overture?

The announcement that many small advertisers feared came quickly today. Today I received a "personal" e-mail from Paul Schulz, Senior Vice President, Marketing at Overture announcing that the minimum bid for purchasing paid keywords is rising from 5 cents to 10 cents. That represents a 100% increase.

I read yesterday on CNET that Overture's UK division had already instituted the higher minimums. The author of the article also speculated that the move would soon happen in the U.S., too. Well, exactly one day later, that has already happened. In another article on CNET today, we learn that Overture's revenue has skyrocketed, but that their profit declined because their affiliate partners such as Yahoo are taking a larger chunk of the pie.

So what do they do? They pass the buck to the ever-screwed community of small businesses who can't afford to have a large stable of 10-cent keywords. The minimum bid increase will surely pad Overture's bottom line at our expense, but I suspect that this is also the beginning of the end for the pioneering paid search company. They will likely see increased profits in the short term, but they may be jeopardizing long-term growth by pushing the minimum bid out of the reach of thousands of loyal advertisers, who may have to compensate by weeding out all but their most relevant keywords.

This development also points even more to the eventual fate that many analysts believe Overture will face: With their distribution partners taking an ever-increasing piece of the pie, Overture becomes more and more dependent on companies that could sink it by starting their own paid search programs. Overture has no choice but to accept the demands of its partners, who are expected to take 64% of what Overture earns.

Yahoo recently hired away a key Overture exec, and it seems inevitable that the portal will develop its own paid search program, perhaps in conjunction with a revamped Inktomi, which Yahoo also recently acquired.

The writing is on the wall for Overture, and thanks to the minimum bid increase, I'm sure many disaffected advertisers couldn't care less.

Posted by Cory Kleinschmidt




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