Saturday, May 31, 2003
More on the AOL-MS Lovefest
CNN/Money has posted yet another well-written piece about the implications of the recent deal signed by AOL and Microsoft in which AOL will continue using IE as the AOL browser for another seven years. But that's not the only outcome of the deal.
As writer Paul R. La Monica states in his lead paragraph: "When bitter rivals decide to call a truce, you have to wonder why."
Google Acquisition Still Advertising on Google
Hey Applied Semantics, I think it might be OK for you to stop advertising on Google now. But I may be missing something...
PPC Margin Compression Thesis Influences Stock Traders
Bill Martin and Matt Ragas often write about companies like LookSmart, Ask Jeeves, Google and Overture in their subscriber-only FindProfit newsletter. On May 19 they mentioned that Google's recent deal with Ask Jeeves UK gave away as much as 70% of revenue, which offers further proof that pay-per-click middlemen will get squeezed as search and portal players play off the PPC providers against one another, or threaten to take it in-house. This reality is made plain to investors in Overture's public filings, which state that they expect "traffic acquisition costs" to increase each quarter by an estimated 0.25%.
Martin and Ragas call this the "PPC Margin Compression Thesis." It's a theory I've been holding forth on for some time now - I'm just glad it now has a name!
Google's fallback, of course, is that it gets to keep 100% of the revenues from advertising on Google. And it stands to reason that companies like LookSmart, and to a lesser extent FindWhat, will face the disintermediation problem. It's just this problem that caused Overture to snap up two search engines (AltaVista and FAST) just so it had some search franchises to call its own.
Thus we continue to feel that talk of Yahoo buying Overture is misguided. A more compatible scenario would be one of the major online ad networks such as DoubleClick merging with one of the top or second tier PPC players.
Addendum: AOL Signs 7-year Deal to Continue Using IE
One huge aspect of the AOL-MS deal I forgot to mention yesterday was that AOL also signed a seven-year agreement to continue using IE as the engine running AOL's browser. This is huge news. Why? Because AOL owns Netscape (currently in version 7.2).
Why is that important? Well, I'd wager that 95% of you out there would guess that this is probably the end of Netscape. Yes, sadly, it seems the end of a venerable Internet icon is at hand.
What a shame, but what an inevitability at the same time. When AOL acquired Netscape in 1998, many observers -- me included -- hoped it would mean a renaissance for the decaying browser. But, that never happened. AOL continued to use IE's browser engine, and AOL got a new version, 7.0, with lots of promise but weak promotion by A-O-Hell. If it's own parent company wouldn't use Netscape, why should anyone else?
Frankly, as a web developer worn out by the browser wars and all its incompatibilities that hindered progressive web development, I'm relieved that Netscape's end is near. I said my goodbyes to it in 1998, and once it's pulled off life support, I'm ready to let go for good.
Friday, May 30, 2003
Dogs and Cats Living Together... Mass Hysteria!
Make that AOL and Microsoft living together, working to make the digital decade a reality. So says Bill Gates after yesterday's surprise announcement that Microsoft would pay American Online $750 million to settle the anti-trust suit filed against Microsoft for allegedly using illegal tactics to wipe out Netscape, which is now owned by AOL.
So, once again, Microsoft essentially admits wrongdoing and pays off the offended party to settle the matter. Sounds like Mr. Gates got away with another one and paid AOL hush money to leave it at that.
Still, there may actually be good news here. The two parties also said they would begin collaborating on a series of initiatives, such as finally making AOL Instant Messenger and MSN Messenger "talk" to each other. Gates says that this and other efforts will help make the "digital decade a reality."
While I applaud such sentiments, I remain skeptical that either company is truly interested in doing what's best for the consumer. Could it be that they finally understand that a rising tide floats all boats?
Thou Shalt Track
The good deal about this bCentral article by Monte Enbysk, beyond the common-sense wisdom of looking harder at your company's web metrics, is that I get to see a picture of the guy who interviewed me, which doesn't always happen. Of course, he only quoted eight words out of our 20-minute talk, which must mean that Elizabeth Osmeloski talked to him for at least two hours!
Thursday, May 29, 2003
Maybe they Do Know What Time (Inc.) it Is, After All
As if on command, the latest issue of Fortune Small Business actually contains articles about small business: how the company that created the Foreman Grill got on the map and a little distributed search thing called Grub.
Wednesday, May 28, 2003
To Invest or Divest? Oh, the Whims of Media Moguls
It seems that the folks with the deep pockets never knew what to think of these big Internet portal plays. They overinvest, they underinvest, they shun, they embrace, all for reasons known only to themselves and their accountants.
Spanish telecom Telefonica, already a large shareholder in Terra Lycos, has bid $2 billion in cash to acquire the 62 per cent of the company it doesn't own, while AOL Time Warner was rumored to be considering spinning off the AOL unit it famously overpaid for (although it denies this).
Large media companies seem to have long term strategies that transcend mere earthly concerns like profit and loss in the short term. Thus there is always more to these mega-deals than meets the eye.
Elsewhere, in search engine news, Ask Jeeves shares jumped on the recommendations of analysts today. At the close, Jeeves announced it was raising $100 million in a debt offering to be used for "general corporate purposes." Ahh, the old run-up-to-a-financing trick. Yes indeed, there is always more to these things than meets the eye. Be careful out there, kids.
Finally, Jeeves is off the B2B bandwagon and back on the B2C train full bore. It just sold off its enterprise division for all of $4.25 million, which indicates that a large part of what they told reporters (like yours truly) about that division was exaggerated hogwash. Never believe what you read in the papers, kids.
Tuesday, May 27, 2003
Northern Light Should Stay Away from "General" Search
It's a well-known convetion in the comic book world that a character who dies, especially a main character, will never, ever stay dead. There will always be some writer with a kooky agenda who wants to bring them back to life in some dramatic and corny storyline. Remember when Superman "died" in 1993? Exactly. Now the search engine business is starting to "take a page" from comics and is emulating that goofy convention.
I received a press release via e-mail that proudly announced Northern Light's re-acquisition by former owner Dr. Seuss... I mean, C. David Seuss, former CEO of Northern Light. Seuss boasts that Northern Light will be making a comeback and will once again be a search engine, as opposed to whatever it was after Northern Light was acquired by Divine, which filed by bankruptcy protection.
Northern Light was hailed back in the day as one of the most powerful search engines, till Google came along, and set a new standard. However, I never found it to be very useful, and it became even less useful when it became a "research engine" for documents. Now that it's boldly going where many engines have gone before, to try to make a go of it as a general search engine.
As a search industry observer and webmaster, I say to Dr. Seuss: Don't go there. The world doesn't need another search engine that is no different than any of the others. If anything, what we do need are different types of search tools that perform specific tasks (vertical search engines or "vortals," if you will). Instead of search engine X trying to "be like Google," they should heed the lessons of Purple Cow and blaze a new trail, find a niche that's not being served and exploit it.
I doubt Northern Light will be wise enough to do that, and that's unfortunate. There's lots of room for search technology, but this "me-tooism" is just plain stupid.
Monday, May 26, 2003
Why Google's Success is (Partly) Due to Microsoft
By now, the story of Google's success is legendary: Combine one part "revolutionary link popularity algorithm" with one part "distributed computing infrastructure built on thousands of regular PCs running open-source server software," and you have the ingredients for a ridiculously fast and relevant search engine beloved by millions worldwide.
So why do I say that Google's success is somewhat thanks to Microsoft? Simple -- Google's infrastructure would not have even been possible with Microsoft Windows server software, which is god-awfully expensive (depending on the terms, it can cost up to $2,000 per license), and SQL Server, Microsoft's industrial-strength database software costs about as much.
Google proved that it's more efficient and cost-effective to have lots of normal computers with open-source server software that distribute a server load rather than a few gargantuan, expensive supercomputers running enterprise server software from the likes of Microsoft or Sun.
If you do the math, you can see that it's prohibitively expensive to have thousands of computers running Microsoft server software, and thus, Google probably would not exist if Microsoft's products didn't cost so much. Lesson to Microsoft: Maybe you could make (even) more money if your products weren't so expensive. This is one of primary driving forces behind the burgeoning success of Linux.
On a related note, I recently had an engaging e-mail conversation with some e-colleagues about why I believe Microsoft is a monopoly that will one day be broken up into smaller companies by the U.S. government. They argued that there's plenty of competition in all sectors of the software industry, and that this proves Microsoft is not a monopoly.
However, even though Linux and other open-source players are nipping at Redmond's heels, Microsoft has something these guys will never have: a $30 billion war chest. Yes, $30 billion. I believe Microsoft is allowing Linux to develop into a competitive threat in order to get the feds of its back. No matter how successful Linux becomes, Microsoft simply has too much money in the bank, and therefore can do almost anything to stave off upstarts, like giving away its server software if the smaller guys get too big.
It's simply a matter of when, not if...
Sunday, May 25, 2003
RageBoy's Tying the Knot: And Oh What a Knot it Is
Yeah, dueling paradigms. ;-)
nice to hear from you. hey, since I haven't sent it to the list yet, you can be the first to know that RB and I are getting married!!! yes, you heard right. we're so excited. we hope you'll give us a cool present.
Altar Egomania Wedding Registry
From: Andrew Goodman [mailto:andrew@....]
Sent: Saturday, May 24, 2003 9:24 AM
To: Christopher Locke
Subject: RE: Re: EGR: Re-Booting Arizona (verification)
Ironically, I dug this out of my "Yahoo bulk mail" folder. :)
Christopher Locke <...@spamarrest.com> wrote:
Christopher Locke here,
I'm protecting myself from receiving junk mail.
Just this once, click the link below so I can receive your emails. You won't have to do this again.
Thursday, May 22, 2003
Would it be such a crime to build a business worth "only" $10 million?
Am I the only one who can't spot the "small" in Fortune Small Business magazine?
It just seems to be story after story like this one about the cable magnate (who admittedly was the "son of a hog farmer") who needs to raise $50 BILLION with a b to make waves in the massive waste management business.
My idea of a small business magazine - call me crazy - would be stories about finding good ideas, avoiding the pitfalls that cause most small businesses to fail, managing work-life balance, and about growing one flower shop into six, or building a one-limo operation into a medium-sized fleet, or going from one employee to five, then ten. Or about four lifelong skilled tradesmen who buy out a failing shop and turn $200,000 in profit per year, eventually selling out for $2 million apiece. Or about the guy who buys that shop and turns it into a manufacturing operation that grows into a $50 million business. Or how about a dentist who simply practices as a dentist for 30 years with three hygienists and a receptionist, earns a tidy income, and golfs on Wednesdays? Isn't there a right way and a wrong way to go about that? Doesn't the guy get to drive around in a Lexus if he feels like it? Aren't his mom and dad proud?
Would that be so incredibly small-potatoes? What's the deal, then?
I think the answer lies in the biases of business journalists, most of whom know nothing about business, but know everything about image and style, because they live in the world of daily observation and mass broadcast. If it weren't for that one misstep at their last assignment, many of them would be interviewing Martin Scorcese or Nelson Mandela... so they want the next best thing, the "business celebrity." Business celebrities generally own impressive structures and call themselves "billionaires." So that's who you're gonna call.
The alternative would be interviewing genuine small business people. Terribly messy business. Certainly not something that reporters for shiny, glossy, business magazines (even those with "small" in the name) would soil themselves with.
For readers looking for levity, of course, there are plenty of chances for FSB readers to learn about the latest "fun gadgets" (because that's what business is about, eh?) like camcorders, and of course, "CEO Fashion Tips" (hilarious!). And here I thought CEO's were those guys who cashed in millions in stock options working for companies worth billions. But nope, I guess that flower shop owner and dentist must be CEO's too! Kind of leaves you breathless, doesn't it?
Harvard Law School Student on Scumware Patrol
Chris Sherman reports in SearchDay that Harvard Law School student Ben Edelman has produced a comprehensive report of which sites Gator targets for popup ads. In Edelman's report, you can drill down to see which sites are being targeted. For example, as is easily documented with Edelman's app, certain search queries on Google will generate Gator pop-ups. One of 700 such terms is "Adipex" - a fat loss drug. Presumably Gator (and indirectly, Overture) sells advertising to pharmaceutical companies and distributors. But do all of these advertisers know that they're using a medium which "trumps" the content produced by legitimate publishers who may be losing revenues from their own ads?
This seems to be unethical (and possibly illegal) on a few levels. If Gator can pop up its own ads on the user's screen when a user types a query like "Adipex," then what does this say about Google's sovereignty over ad revenues derived from publishing the results displayed on Google.com?
Ever wonder why there is no love lost between companies like Overture and Google? Look no further than tactics like "Gatoring" for evidence that the gloves are off.
Wednesday, May 21, 2003
Introducing the 2004 Edsel
"Twenty-seven years of computer technology and we're back to the drawing board" says the intriguing headline from the folks at Compaq and Microsoft.
"Sometimes there is nothing more persuasive, nothing clearer, than the scrawl of freehand."
And often, there is nothing less convincing than the utterances of ad copywriters in full-page newspaper spreads. Maybe they should have scrawled the ad in freehand?
Yes, after all this time, they're still trying to flog pen computing. Thus living up to that old Microsoft saying: "if the shoe doesn't fit, just cram it on there!"
Search Engine Watch "Tags Along"
In the beginning, Search Engine Watch was a source for information about technical aspects of searching the Web, but as far as I could tell, it didn't have an official tag line.
Now, however, it apparently has been christened "The Source for Search Engine Marketing & Optimization." I guess this makes sense, as most of what SEWatch covers these days relates to the marketing side of the business rather than the research side.
This brings up a point that hasn't been well documented yet. Thanks to the search engine marketing boom, most of us search engine enthusiasts somehow went from webmasters or developers to search engine marketers in the past two years. It must be related to that thing about being able to make money from our vast stores of search-engine knowledge!
Interview with the Daypopper
SearchDay guest writer Gary Price sits down with Daypop creator Dan Chan to get the inside story on Chan's growing service, which is starting to make waves in the search community.
Just what is Daypop? Price explains:
Daypop is a unique search engine, for a number of reasons. It's primary focus is on weblogs, news sites and other sources for current events and breaking news -- currently scouring more than 35,000 of these sources.
Sound kind of like Google News? Yep. My guess is that Chan will be employed by either Google, Yahoo, MSN, Overture or some similar operation within six months.
Monday, May 19, 2003
SpamNet Ain't Free After All
OK, so I spent the better part of a year helping Cloudmark SpamNet perfect its peer-to-peer spam fighting network, in exchange for free usage of the product. Then, last week I find out that SpamNet is not free, after all, as I and many others had believed, now that it has gone to version 1.0.
I guess I'll just have to do without. It's not that I have a problem paying for a quality product. I have no qualms about that. I pay Yahoo for Mail Plus, I paid for Netcaptor, I paid for RoboForm. I paid for Blogger Pro. I have no problem paying for worthwhile and invaluable tools. But, I won't pay for something that I thought was going to be free for end users but would cost ISPs and corporate mail users.
How irritating. CNET can take it from here.
You Down, ODP? Yeah You Know Me!
Is it just me, or is the Open Directory Project constantly down or acting strangely? The only time I ever use the ODP is when I'm submitting new client sites (or resubmitting constantly, as is the case these days). I've been trying to submit a site now for two days, and I'm constantly getting Internal Server Errors. So, I'll try again tomorrow.
Even when I am able to submit URLs, after I search the directory to see if the site has been accepted, I get persistent error messages stating that there is a heavy server load and to try my search later!
What's going on there, guys? I wonder if anyone at AOL is even minding the ODP, and what they plan to do with it. Seems to me that the ODP is a useless piece of junk that either needs to be revamped or sent to the Recycle Bin. Many categories are redundant and lack category editors. While the idea of a free directory is interesting, in practice, the ODP has been a mess from day one.
"Dot Net Alerts" to Offer New Marketing Opportunities?
Microsoft's ballyhooed new "connected technology," collectively called .NET, or Dot Net, has been slow to take off largely due to Redmond's inability to present a clear and unified branding strategy. But, some new toolkits from Microsoft might help spur adoption and developer interest.
One example: Dot Net Alerts. Basically, if you use MSN Messenger, and if you've ever seen one of those pop-up alerts from the Messenger icon in the Windows tray, you've already witnessed Dot Net Alerts in action. Microsoft has created a software development kit (or SDK) that enables developers to tap into this powerful way of communicating with users. Here's some info straight from the horse's mouth:
"Research shows that the .NET Alerts service has a response rate of 3–5 percent or greater, compared to less than 1 percent for direct mail or e-mail. In addition, alerts delivered to a desktop or mobile device will not get lost in a customer's cluttered inbox. Because .NET Alerts allow you to reach customers at the moment of opportunity with relevant, engaging messages that they have opted for, customers are more likely to respond immediately."
Sounds intriguing, eh? But, keep in mind that your users must have Passport accounts to use these Alerts, so if you decide to monkey around with this, be sure to know your audience in advance to find out if it's worth your company's time to experiment.
Sunday, May 18, 2003
Remembering Why Google is Tops
Tara Calishain, coauthor of "Google Hacks," takes a revealing look back at how Google went from search engine darkhorse to global media powerhouse in three short years.
One obvious fact that I had forgotten about Google's rise is that during the portal boom years, banner ads were ubiquitous, and all the former search engines and web directories like Yahoo and AltaVista had let their web search guard down to to focus on "monetizing their millions of eyeballs," and Google was different because it was pure search with no ads. What a Purple Cow at the time! (And, it's too bad for AltaVista that they didn't find a way to make their Raging Search engine work; they might be the #2 engine today instead of somewhere near #10).
I knew Google would find a way to make money, despite the lack of obvious revenue sources, but I had no idea they'd be where they are today -- the most recognized brand in the world, according to a major survey and pulling in almost a billion dollars from AdWords and other revenue sources. Who knows what the future holds?
Do Google Results Give Crackpots Too Much Power?
Finally -- original, insightful and balanced coverage of Google by a major media property! Geoffrey Nunberg of the New York Times writes that, because Google is so widely used and the top results returned by a search can often be seen as the most authoritative on a topic due to the effectiveness of its heralded PageRank algorithm, there arises an interesting dilemma.
Sometimes, crackpots can taint search results by "googlewashing" an expression -- "in effect, hijacking the the expression and giving it a new meaning," according to Nunberg. This is an astute observation that represents a potential pitfall to our reliance on Google. But, as Nunberg also observes,
On topics of general interest, the rankings tend to favor the major sites and marginalize the smaller or newer ones; here, as elsewhere, money and power talk.... And when it comes to more specialized topics, the rankings give disproportionate weight to opinions of the activists and enthusiasts that may be at odds with the views of the larger public.
Nunberg makes several other interesting observations and clarifications that give Google credit for creating a beautiful, elegant system, and his piece is well worth a read.
Still Mystified by AdWords? Try Google's Flash Tutorial
Nothing helps you learn a process faster than seeing it in action, rather than reading about it. Google has done a smart thing by creating an online tutorial for how to "target your customers with tips from Google":
AdWords specialists have pooled their best advice into a new four-minute online keyword matching options tutorial that demonstrates the huge potential of these options. The presentation guides you through account screenshots and clear examples of how to take advantage of our four matching options (broad, phrase, exact, and negative). -- From the Google AdWords Newsletter.
Oh, and it wouldn't hurt either to pick up Andrew's handy report on how to increase ROI from Google AdWords!
Amazon.com is Next Target of O'Reilly's "Hacks"
Tech book publisher O'Reilly plans to follow up its smash hit "Google Hacks" with a title about how to manipulate another one of the Web's burgeoning platforms -- Amazon.com, with its Amazon Web Services initiative.
The AWS is similar to Google's Web API, and both of these technologies are based on web services, the "holy grail" of Internet programming that's supposed to link all web apps to one another. To learn more about how you, too, can hack the e-commerce giant, read on.
Oh, and in case you were wondering about the "Hacks" series, O'Reilly explains that they adopted the "hacking" label for this book series (other titles include "Mac OS X Hacks" and "Linux Hacks") not to indicate the malicious activities that is usually associated with the concept, but to "reclaim the true spirit of hacking," which is an activity engaged in by adventurous programmers looking to solve problems or devise creative programs.
To see an example of the Amazon Web Service in action, check out Amazon Lite.
Friday, May 16, 2003
The Rumor that Won't Die
Today Overture Services is trading up 17% on rumors that Yahoo will buy the company. This time around, the rumor is mentioning specific ratios: one-half share of Yahoo plus $11, or $25/share, quite a premium over the current Overture stock price of $14.50.
A deal like this would really make me shake my head, given what has transpired lately: Yahoo acquired Inktomi and Overture acquired FAST and AltaVista. It's like all the king's horses and all the king's men will be needed to thwart Google's lead in web search. But three also-ran search engines put together don't necessarily add up to much of a threat.
The only reason I have to assume there is a grain of truth to this is that a massive selloff would have happened already since this is an actively-traded stock in a downtrend. Surely some big holders would take this "pop" as an opportunity to dump if the rumor were false. Stay tuned. If it does come to pass, it could be one of Yahoo's silliest acquisitions yet. It's doubtful that MSN, Lycos, and other big partners would maintain their Overture deals if it were a part of Yahoo. Overture does have 90,000 advertisers, and Yahoo would enjoy a 100% revenue share of pay-per-click ads if it acquired Overture, but as I've argued earlier, those 90,000 would no doubt sign up with Yahoo in a heartbeat if they went in-house (or acquired another PPC player at a much lower price).
Thursday, May 15, 2003
Google Hacks Makes a Splash
What's an API? Well, apparently, a bunch of people care enough about Google nowadays to want to find out. Google Hacks, by Tara Calishain and Rael Dornfest, has vaulted its way onto the New York Time Business Paperback Bestseller list.
Wednesday, May 14, 2003
Two-and-a-Half Point Online News Manifesto
1. Yahoo, please seriously partner with (or seriously consider acquiring) Moreover Technologies. Like a lot of you out there, I frequently check a customized "My Yahoo!" page. On this page there are some useful elements, such as the real-time currency conversion table that is showing the Canadian dollar climbing relentlessly. But the news portion which dominates the page (the way I have it set up, anyway) is becoming increasingly useless. It seems that the online feeds provided by the majority of sources - Reuters, AP, The New York Times, Golfserv, you name it - are neither frequently updated nor comprehensive in their coverage. Some of them even get stuck for weeks, so you waste your time looking at the same headline every day until it unsticks. But even more vexing perhaps is the outdated concept behind all of this. News junkies want better customization that really works. Moreover's promise is that it's a "web-savvy" version of old-style news services. It has been widely adopted on niche websites all over the place to serve up highly topical news. It's a "Reuters for the 21st century," if you will. So much so that a concerned Reuters actually made a significant investment in Moreover.
2. Unfortunately for Moreover lovers, though, Moreover is starting to suck. What used to be a nicely-customizable, categorizable, XML-feedable combination of major news sources and quality articles from relevant niche trade mags and high quality web sites has become a watered-down mishmash, often peppered with drivel which is, in some cases, created by webmasters who have decided to pump out numerous little one-paragraph stories on a daily basis. In other words, we see sites starting to "optimize for Moreover." But where is the quality control? If I wanted to search random observations on weblogs, I'd use some other means of searching. And why are some sites' "blurbs" somehow picked up and distributed as "articles" and others, not? There seems to be little rhyme or reason to any of this. Cleanup on Aisle 7, Moreover. Trying to market your technology as a unique type of KM tool for the enterprise, because it offers "competitive intelligence" of various remarks made online, makes plenty of sense. But the attempt to sell corporates on your jauntily-positioned product shouldn't interfere with the usefulness of your public news feeds. How about some guidelines, as follows? Stories that are not from original sources don't get credited to guys who have plagiarized the first paragraph of news from a major news source. Weblog entries don't get indexed as news. And "articles" of fewer than four paragraphs or 200 words don't get indexed.
3. If the above two conditions are not met, need we remind you that Google Search and Google News are poised to take away your market? People are already using Google News because it just flat-out works. It's amazing to me that major companies like Yahoo and pioneers like Moreover are going to stand by and hand Google another info-retrieval monopoly.
Saturday, May 10, 2003
Wanted: Famous Canadians
Actually, a few retailers from Canada who want to be more web-famous this year. Every day, 2.3 million Canadians search for something on Google. But are they finding you?
Google still has a few more seats available for an upcoming breakfast seminar including case studies from retailers and experts, and strategies for improving ROI on search engine advertising.
If you're in the Toronto area, consider taking advantage (one lucky attendee will win an iPod). The seminar is 8-9:30 a.m., Thursday May 15 at the Sutton Place Hotel. Wendy Muller, Head of Google Ad Sales Canada, will be your host. I'll be the guy in the back row clutching a double espresso.
To attend, just RSVP here (and disregard the deadline date): http://services.google.com/events/canada_rsvp
Friday, May 09, 2003
Some sad news today. Jim Wilson, the founder of Search Engine Forums and creator of several other high-profile websites and pioneering web initiatives, has died after a long battle with heart disease and stroke.
Jim had many followers and some detractors. But what was most important was the large impact he made on the whole field of website promotion, especially relating to the search and paid search fields in which so many of us make our living.
Search Engine Forums spawned many imitators, but it was the original. It's Jim and his moderators that we have to thank for this pioneering work. I hope the forum comes back stronger than ever with the help of John Cokos and other champions of JimWorld.
A memorial website has been posted at http://memorial.jimworld.com.
Thursday, May 08, 2003
Search Engine Optimization Got You Stumped?
If you're one of those people who has been planning to learn more about the search engine optimization game, but you just can't seem to find the time, you should consider attending Jill Whalen's "Search Engine Optimization half-day seminar" in Atlanta (Colony Square Hotel, Friday May 16).
I read Jill's newsletter, High Rankings Advisor, every week, and always learn something new. Here's a chance to answer that burning question "just who is this Jill Whalen anyway?" - and to get up to speed in record time. It would probably be a good idea to pick Jill's brain (and the brains of fellow attendees) at the networking lunch, as well.
You *could* fly to London or wait for August in San Jose to see Jill speak at Search Engine Strategies... but if you need answers sooner or closer than that, this seminar could be the ticket.
Wednesday, May 07, 2003
The trouble with LookSmart: flat click pricing
In the latest quarterly report, we learned that LookSmart is still hovering around break-even and projecting a so-so year. A number of theories have been put forward to explain its weakness, ranging from lack of moral fiber to its dependency on MSN. There may be some truth to those charges, but I'm surprised that no one has put their finger on what may be the fundamental reason that LookSmart's progress has stalled after it saved its bacon with a shift into the pay-per-click model: its failure to adopt the same market principle that has driven the growth of competitors Overture, Google Adwords, and Findwhat.
When LookSmart shifted from "pay for inclusion once" to a "pay for inclusion and then pay for clicks" model, it priced clicks at a flat 15 cents. Sound reasonable? It isn't.
Keywords and click-throughs all look sort of the same on paper, but the difference between getting exposure on the words "soy milk" and the words "mortgage refinancing" could be as different as getting exposure on a bus stop bench in a lightly-traveled road in a heavy-industry district and getting exposure on national television. It could be as different as dropping leaflets on a large city of illiterates and handing out free Blackberry pagers to Fortune 500 CEO's. You can't put a flat price on this stuff.
Because pay-per-click advertisers now track everything, they are aware of metrics like cost-per-customer-acquired, cost-per-order, cost-per-lead, etc. The price of the clicks is virtually irrelevant, except that for costs per lead to be in line with profitable targets and industry averages, some businesses need really cheap clicks (10 cents might be too high), and others will be willing to pay $1.50 per click to get exposure ahead of their competition who also track their results and are willing to bid as high as $1.45 a click.
What is probably happening right now, given the likelihood that LookSmart-generated traffic doesn't, on average, convert as well as Overture or Google traffic, is that a certain percentage of LookSmart advertisers have seen their conversion data and now know that fifteen cents is no bargain. So they suspend, or at least, fail to increase, their LookSmart budgets. The remaining advertisers - those who do turn a profit at fifteen cents - might be willing to outduel one another and bid prices up to 40 and 50 cents or more. But LookSmart is content to give it to them at fifteen cents, thus permanently limiting their upside.
That's not LookSmart's only problem, but clearly, adoption of the market principle is something that LookSmart must consider if they are to realize the same success with the pay-per-click model that others have. Clicks are worth vastly different amounts to different businesses targeting different consumers. Does a local television station charge $50,000 for a 30-second spot at 2 a.m.? More to the point, can you get a 30-second Super Bowl spot for $200?
The MSN dependency is a serious issue too. No matter how hard LookSmart works on its product quality, customer service, etc. - the fact is that when you begin charging by the click, you are now a little less like search and a little more like an advertising network. An advertising network must find places to put its ads. LookSmart currently is short on distribution partners.
Boxed into this tight spot, LookSmart could deke its way out of danger by merging with similarly-valued FindWhat. FindWhat could advise them on how best to implement the market principle in their product offering, and, of course, deliver a sizeable number of distribution partners to LookSmart. Lately, LookSmart has been acting like a company with $400 million in the bank, making "high-minded" acquisitions of little search companies and cool "projects." Time for a reality check.
Not to be outdone, Overture plays shell game with its advertisers
In an "anything sneaky Google can do, Overture can do much sneakier" development (boy am I glad I did all this research tonight):
In poring over log files, I found it curious to find a lot of people finding my consulting web site with the phrase "famous Canadians" typed into Yahoo Search. Then it hit me. I remembered using a jokey ad title "World Famous Consultant (From Toronto)" in one of my Overture ads. And the copy below the title included the words "Canadian business owner." Overture sponsored links, of course, appear at the top of Yahoo Search results. Sure enough, that was what was happening... but it shouldn't have been!
I am *not* advertising on the word "famous" or the phrase "famous Canadians." Overture's evidently "yet again enhanced" matching software (it's called Match DriverTM, but can we come up with a more derogatory name for it please? how about Pocket PickerTM?) now grabs keywords right out of the ad title I've written! Nice of them to fully disclose this little enhancement. Here's a little refresher course for Overture on how pay-per-click keyword advertising works: the advertiser toils on something called a "keyword list" of words relevant to their business. Their ads come up whenever someone types in those designated keywords, depending on how much the advertiser bids. The advertiser also writes ads using any words they feel might attract or interest or prequalify their visitors. The ad copy is *not* used as the basis for determining whether an ad appears on a given keyword or not. When my ad that is only supposed to appear on a term like "marketing toronto" comes up under "famous Canadians," I'm not getting the level of control I bargained for. I can tell you that 101% of advertisers feel the same way. Ask around.
I tell ya what, it's pretty neat seeing my ad up at the top of the page when some poor sap types in "famous Canadians." Now Overture, can you please smarten up and let Jim Carrey, John A. Macdonald, and Jane Siberry have their page back?
I'll bet the fly fishing camp appearing below me in the #2 sponsor slot is equally thrilled at the unexpected exposure.
Xtreme Advertizing 2 Kidz: Kiss Your $$$ Goodbye
Google advertising, formerly admired because the target prospects are often intelligent people typing words into a search engine, now also appears on "content partner" sites, sometimes through direct partnerships, and sometimes via ad brokers such as Burst Media (always friendly to the small impecunious webmaster).
I just noticed one of my own ads appearing on a site called aimfilez.com (typical entry: how to make your partner's a:/ drive whir from within AOL Instant Messenger; contact info on site: first names only). A typical rule of thumb for me when choosing a place to put my B2B ads (as if I have any choice in this case) is: steer clear of any sites focusing on "filez," "warez," "kidz," etc. I don't want these punks clicking on my ads and draining my account. I'm sure a lot of advertisers feel the same way.
So are we back to the days when the ad brokers laundered money for crap content sites with no value to advertisers (search for "eFront fiasco" and you'll get a refresher)? It appears we may be heading that way. Advertisers can, and probably should, "just say no" to Content Targeting until they're sure that it's going to pay off for them. But the whole problem would be solved by offering advertisers (let's say, good customers who spend x amount per year) even more choice - choosing which partner sites or ad networks to opt out of.
Google: your partnerships ultimately reflect on you. You're splitting ad revenues with script kiddies now?
Tuesday, May 06, 2003
A Premium Content Search Engine?
This man has a good point. Why isn't there a search engine specifically for premium content, such as that offered by Salon, the Wall Street Journal, etc.? The author of this article suggests the creation of a new meta tag that indicates a particular page contains premium content, but we all know that would never work.
His idea of a search engine that indexes portions of the page, but not the page itself would likely give premium sites a huge shot in the arm. Perhaps something more along the lines of Froogle would be more workable.
With Froogle, Google's shopping search engine, online retailers must manually submit an XML product feed to the Froogle database, and must keep it current, too, or it will be purged. Premium content providers could do the same thing and begin receiving search engine referrals that they cannot do as much with current search technology.
Look out, LookSmart
Things had been looking up for LookSmart in the past year, as reluctant Net marketers began to slowly buck up for the web directory-turned-pay-per-click provider's new direction. It is, after all, one of the few ways to appear highly in paid listings for MSN, one of the top 3 search properties, so it's important to many companies to be in LookSmart.
However, due to cutthroat competition in the PPC space, LookSmart's profits are way below expectations. I would expect the squeeze to continue to be on LookSmart, as the only real feather in its cap is the MSN relationship. If that falls, so falls LookSmart. Look out below!
New Traffick Article Posted: "History of Search Engines and Public Relations"
History of Search Engines and Public Relations
The irresistible force of search engine optimization has hit the immovable object of public relations. The result is both a threat and an opportunity.
Lace and sunshine and hammers and nails
Speaking of The Carpenters, a terrible thing happens when you type "The Carpenters" into Google - you see ads for contractors and lumber stores. Help, Applied Semantics, heeeellllllppppp!!!!!!
Stupid or not, though, keywords matter to your business in the here and now
Informative interview with Tim Armstrong, Google's VP of Advertising.
You know, search engines really are pretty stupid
I've been commenting quite a bit lately on the fact that search engines treat keywords with too much reverence, when they need to be better understanding the meanings users intend. Just because three words appear on a page doesn't mean the page is about those three words, if you get what I mean. (Sure, a user can type the query in with quotes to ensure that the exact phrase becomes the query, but this approach has problems of its own).
I just performed a Google search for "corporate law Canada" and a really strange result was sitting in the #24 spot: the home page of FAST Search (one of Google's competitors, one of the top three or four web spiders in the world).
To quote Bush the Elder, "this will not stand." Or to quote a slightly more mellow poet, "we've only just begun."
It's Not Easy Being Purple
Seth Godin's noodling around in the lead-up to the launch of 99 Cows, the companion e-book to Purple Cow: Transform Your Business by Being Remarkable.
Incidentally, I'm the submitter of Cow #48: "The World's (Okay, Canada's) Donut Expert." Interested? You'll have to buy Godin's e-book (all proceeds to charity) when it comes out next week.
I also happen to be the contributor of Google Hack #99. We're on a roll. Looks like it's time to update the resume.
A Glimpse of Yahoo's Anti-Spam Efforts
This morning, while simply replying to an e-mail, I saw something new on Yahoo Mail. After clicking the Send button to whisk the e-missive on its merry little way, I didn't see a screen that said something to the effect of "message sent."
Instead, I saw behind the curtain of Yahoo's anti-spam initiative, announced recently as a coalition with Microsoft and AOL. This interim page summarized the message I was sending at the top, and at the bottom, there was a message that read:
"Compose - Verify
To compose a message, please enter the word as it is shown in the box below:"
There was a "scrambled word" GIF image similar to Overture's login screen (which forces you to enter four letters "hidden" in a series of GIF images). In this case, the word was "poison." And, I had to type it in before I was allowed to send the message. To the right, there was a box that read:
"Why do I have to do this?
This step helps Yahoo! prevent abusers and spammers from using Yahoo! Mail. "
Ask a simple question, get a simple answer!
Monday, May 05, 2003
Overture Updates Account Interface
In case you haven't peeked in on your Overture ads lately, you'll see some changes next time you log in. The account center was down for 18 hours last weekend while engineers made many upgrades and improvements.
I spoke with an Overture rep last week, and she said fixing bugs was the main reason behind the system maintenance. Specifically, the Manage Listings page was ultra sluggish for accounts with quite a few keywords. Also, when your session timed out and you tried to log in again, you'd get a login error even using the proper login info. That problem persisted for months. It's about time they fixed it.
As far as enhancements go, it looks like they've added some navigation improvements. On the main menu page, the Account Status has been moved to the right-hand side of the page. In addition to the normal summarization of account balance, daily click charges and estimated account depletion, you now see how many listings you have, how many listings are in the "low Click Index range," and recently removed listings.
The Click Index rating, which relates to the relevancy and clickthrough rate of the ad, has been around for a while, but until now, there wasn't really a way to find out which listings were in danger (until you got an e-mail from Overture warning you about a listing). However, terms that never get clickthroughs were obviously potential victims. Now, you'll see it bright and clear on the Manage Listings page. Basically, it's the same thing on AdWords where, if your ad ain't cutting the mustard, you need to fix it, or they'll mothball it.
All in all, these are good changes. Especially the speed enhancements. And, the process of adding listings sure has changed! It is considerably easier than it used to be. You can now use one ad title, description and URL for multiple keywords, a la AdWords, and that's a huge time saver! Be careful about doing this if you want to track results by keyword, though.
San Jose Newspaper Enthuses about Local Search Engine
When the world's most brand-recognized company is located just a few miles away, you'd think a local newspaper would have said all there is to say about Google, nestled in Mountain View, just a few miles from San Jose. (The only reason I know this is because I attended last August's Search Engine Strategies conference in San Jose, and received a guided tour of the Googleplex with Traffick Editor Andrew Goodman).
So, I'm sure any read of the San Jose Mercury News (online as SiliconValley.com) could have written this article. Maybe this was originally published on The Onion?
To be fair, I guess this was an online-only article, but still... This me-tooism with regard to covering Google is getting old. Imagine if you're Sergey or Larry. "OK, can you tell us one more time, gentlemen, how Google got its start?" Groan...
At long last! Learn why the eponymous Google Village morphed into the much-better named Microdoc News:
"Rather than Google Inc., being a dominating and powerful media baron forcing us in the global village to act in particular ways, I now see Google Inc., as rather much more an inventor, architect, engineer, and publisher, making it possible for the little guys like myself to become heard."
Nothing like a 180-degree reversal to increase your street cred. Well, at least another Google conspiracy theorist has abandoned the cause and realized Google is Just a Darn Search Engine, not a Matrix-like computer system bent on taking over the world and using humans as batteries!
Sunday, May 04, 2003
Yahoo, eBay Leading the eWay Back to Net Stock Dreamland
Here's another article on the resurgence of Net companies, especially focusing on the boost their stocks are getting thanks to some rosy earnings reports. The AP, via, CNN writes that eBay now has a market capitalization bigger than that of General Motors (again?). How silly. It's truly amazing how dumb Wall Street is sometimes. But... perhaps the "discredited" idea of the "virtuality" of Net companies creating incredible profits is finally coming true, like many predicted in the late '90s (read: the New Economy concept).
Once again, it's refreshing to read yet another positive reminder that many Internet companies are poised to come back and remain fixtures for a long time to come. Of course, not all of the fallen stars will come back to life, but there have been enough success stories to make one believe that this time, Net cos. are finally going to capitalize on the frictionless environment of the Net and do things never before dreamt.
Saturday, May 03, 2003
Yahoo-Overture? Not at this Price
Since they first bubbled up amongst the eternally hopeful and terminally biased cheerleaders for Overture's stock on the Yahoo! Finance discussion boards, I've felt that the speculation about Yahoo acquiring Overture is, well, dumb.
Yes, Yahoo! raised $750 million in a bond financing. There are a lot of undervalued opportunities in the marketplace right now, so why shouldn't an established leader double down and consolidate its position by making a few key acquisitions of undervalued companies?
Yahoo! has made big acquisitions before, but they haven't been Overture. And the next one is unlikely to be Overture.
A purchase price in the range of $700 million assumes the continuation of Overture's long-term deals with companies like Yahoo, MSN, Lycos, Infospace, and AOL overseas. Without their large distribution partners, Overture is nothing, zilch, nada.
Problem is, if Overture was owned by Yahoo, those MSN, AOL, and Lycos deals would be in serious jeopardy. Without them, Overture is worth much less than $750 million. In fact, with its high overhead and big head-count, Overture would be bleeding cash all over the place if it lost those deals.
A more likely scenario, made even more plausible by the fact that some observers think they've seen Yahoo testing their own pay-per-click keyword ads, is that Yahoo will turn the screws on Overture a bit more in the next negotiation, by threatening to go in-house. Another thing Yahoo could do would be to briefly make a deal with Findwhat (as Lycos did) to "private label" their PPC service. This would deliver an additional 20,000 advertisers to Yahoo's database, which would be a decent kick-start towards offering their own service down the road.
Doesn't matter, anyway. Overture can talk all they want about their 90,000 advertisers. If Yahoo goes ahead with their own pay-per-click program, advertisers and their agents will open accounts faster than you can say "disintermediation."
So who is Yahoo going to acquire? IMHO it'll be either something strategic like Earthlink, or another cash-flow generating channel (like HotJobs). Yahoo makes good, steady profits in niches like Personals. There are sure to be other channels where an acquisition would pay off, such as travel, books, or well, you name it. I don't think Yahoo's going to be snapping up Amazon.com anytime soon (valued at $11.5 billion), but it's nice to see indications that they're thinking big. So why all the fascination with Overture, which has value only as long as its portal partners decide it does?
Friday, May 02, 2003
Rumors about Yahoo Bagging Overture
News.com is speculating, as other writers have done recently, that Yahoo may have Overture in its sights as an acquisition target. Why else would it raise $750 million last month? To buy new office furniture?
I don't have much insight into why or why not Yahoo would snap up Overture, but if that was the case, I doubt Overture would have bought up AltaVista and AllTheWeb, especially since Yahoo just finalized their purchase of Inktomi.
But, if Yahoo did actually buy Overture, they would own more than half of the paid search market AND search engine market overnight. Hmm... maybe they will absorb Overture, after all...
"Will they Sell Adword Positions?" No, Doc.
An interesting and telling article by Doc Searls was posted Wednesday comparing Overture and Google pay-per-click advertising with Linux because "it lowers the threshold of market disruption for companies that take advantage of [its] extreme technical economies." (I think that means it lets the little guys play on the same playing field as the big boys.)
Searls is impressed by the fact that Google Adwords (since being relaunched as a pay-per-click service in March, 2002) now determines ad position on the page partially based on the relevance (clickthrough rates) of ads. Little wonder that this Cluetrain co-author would understand that anything relating to online commerce absolutely must build the user experience into its design. As Sheryl Sandberg, the first director of the Adwords program, explained to me last year, the editorial policies enforced by Google Adwords staff are also part of that long-term approach that aims to ensure that users don't get so turned off by the ads that they stop using the search engine.
Google saw early on that they'd need to screen out the types of ads which were "merely disruptive" - those which might get clicked on, but which might lead to very poor sales conversion rates. Once one moves away from the realm of interruption marketing, into a realm where every advertiser is tracking their sales conversions, it makes sense for all concerned to set up a framework that prevents the "merely disruptive" ad from diverting too much attention from the regular search results, or other advertisers' ads.
In any case, Doc is a bit late to the game; finally discovering the unique user-centered principles that are built into search engine keyword advertising. Jakob Nielsen was probably the first to clearly explain the unique properties of Google AdWords in this respect. The rest of us caught on a bit later. And the majority of businesspeople and journalists are just now starting to catch on.
More recently, Nielsen made another "discovery" (or at least put forward a compelling proposition) about text-based ads: the superior response rates of text-based ads where appearing next to content may be a short-lived artefact of the novelty effect. [Will Plain Text Ads Continue to Rule?, April 21, 2003.] At the same time, he argues, text ads next to search results may continue to resonate with users for the foreseeable future, because "search engines are the one type of website that people visit with the explicit goal of finding someplace else to go."
As an imaginary personification of Yahoo might tell anyone who asks: "I've been rich and I've been sticky. Rich is better." Paid search is here to stay.
[Thanks to Cam Balzer for noticing the Doc article.]
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