Feature Article:
Future Directions of Search Engine Advertising
Recently some dramatic changes have occurred with the major search engine sites, proving that they are obtaining big business status. Yahoo! completed round two of their major acquisition strategy with the proposed merger of Overture the paid listing kingpin. This followed the purchase of the Intomki, a search site that sells their listing to other search sites. As the number two search site on the Internet, this is a strong indication that Yahoo! is now equally concerned about delivering relevant search results for their advertisers and not just site visitors. This will be great news for businesses looking to advertise with Yahoo!.
Before these aggressive acquisitions by Yahoo!, they seemed content to get their search functions from a key competitor Google and being in the number two position. For many businesses wanting to ensure high rankings with Yahoo! this relationship made them irrelevant. Your search engine rankings in Google would be the same in Yahoo! Very few searchers use the Yahoo! directories crafted by humans and are instead using the “Search the Web” callout box located at the top of the page, which is actually getting the search results straight from Google. This supports an Internet truth that when people are searching for information on the web they want to find it fast and return the most relevant listings to their search request. So to maintain being useful for search users Yahoo! had to do something to challenge Google.
This explains the Intomki purchase, which builds its search directory by using a search crawler method of indexing the web similar to Google and a paid inclusion method that insures your site is listed within 48 hours. In time, most likely Intomki’s search engine will replace the dependency on Google, it just doesn’t make sense that they would continue to use it. Although Intomki does not have name brand awareness for delivering excellent search results like Google, it is well tested in popular sites such as MSN. Yahoo! is taking more control of their search business and challenging the number one position is a positive step for them.
The next important piece of this strategy is how the search sites make money, and that is collecting pay-per-click fees on search results from advertisers. Yahoo! is already using Overture’s sponsored and paid ranking in their search results today, so initially this will not have any direct effect on the web site once the merger is completed. The big impact will be felt on the bottom line of Yahoo! by being able to leverage the Overture network partners that they feed the sponsored ads to. This is a rather large and well-organized network that many businesses are very pleased with the results. This allows Yahoo! to respond to a recent enhancement by Google’s AdSense program that allows any content rich site to incorporate Google ads into their web site and revenue share. A very attractive advertising option for companies to reach sites outside of Google or the Yahoo! web sites for expanding their reach.
These purchases by Yahoo! allow them to compete on a more even playing field with Google, but do they give them any unique edge? Today the answer is no, but we predict that Yahoo! may begin to capitalize on some of their inherent strengths and offer something Google can’t, the human touch. Yahoo! began it’s search days by using human editors to review, categorize and post every web site submission that was sent into them. This quickly became a daunting task to ensure up-to-date listing information and quality information. Of course listing mistakes were made, but in collecting a $299 listing fee you did have some recourse to modify or correct the listing. Human editing of web site listing will always have a natural advantage over Google’s reliance on placing sites in the right category by a machine. It still takes a human to understand the way a human thinks.
Even Google realizes this distinction and relies on the DMOZ.org or the Open Directory effort for support in the ranking and categorizing of web sites. The biggest drawback of this DMOZ dependency is this human edited directory is run entirely by volunteers. You don’t get any dependable support from them and many sections of the directory don’t even have an assigned individual. If you site is listed improperly or looking to be listed, getting no response or a six-month wait is often the norm. So what do you expect from something that is free?
Any business that takes search engine marketing seriously, would expect the same from the search sites. If Yahoo! were to capitalize on this human review of sites and provide the same level of service they do today we believe they will be the preferred choice by businesses. The market dynamics of the search engines sites today and in the future will remain dependent on advertising dollars from a business. Keep them happy and the dollars will keep flowing in. Frustrate or disappoint them and you know what they will do next.
One development that is sure to happen from recent Yahoo! moves is increased competition between them and Google. And that is always a positive sign for the industry, but what about the 3rd player in the area, Microsoft? MSN Search holds a position behind Yahoo! as the most popular search tool and Microsoft recently is waking up to the Google challenge. The competition from Microsoft here could be both positive and negative. Today the MSN Search site relies mostly on outside technology to provide search results from Inktomi and Overture for sponsored ads. But recently they have been developing their own search bot that crawls the Internet to index web sites in response to Google. Tapping into the extensive Microsoft research and development resources could bring forth interesting new developments in search technology challenging an area Google is well known for. That’s the good news, but there could be some concerns.
Microsoft competes to win and when they see big money potential in industry like search engine marketing, watch out. If Microsoft becomes too aggressive in wanting to dominate, they could integrate search features into the operating system creating a unique advantage over Google and Yahoo!. As Google has proven with its simple interface, when computer users are searching for web sites the quicker the better. Integrating a web search as a base function of the operating system would benefit computer users, but limit choice in the long-term for the industry.
The future of search engine marketing is looking positive. Expect to see the search sites provide more responsive services to businesses advertisers, and more advancements in search technology. The big three of search sites, Google, Yahoo! and MSN Search will most likely consolidate their position as the first entry portal for search users and offer extensive partner networks to the benefit of the industry.
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