Category Archives: Online Trends

The Google AOL Deal: Commentary from the Cheap Seats

First published December 21, 2005 from Mediapost’s Search Insider

 

‘m from Canada, and up here, we examine every hockey trade in minute detail. We look at who got what for whom, how the trade adds or detracts from the respective team’s talent pools, and who came out the winner. So, the recent AOL-Google deal caught my attention. Why does Google want AOL? What’s the strategy? Where’s the win?

AOL: Hanging On.

From AOL’s perspective, the deal makes tons of sense. AOL is an anachronism in a fast-changing world. It’s a dial-up service that’s trying to carve out a niche in the new broadband landscape. It’s been struggling to survive as an online portal, with its once mighty subscriber base dwindling by 33 percent (we’ll come back to this subscriber base in a minute). Time Warner has pretty much hung AOL out to dry, reducing it to running TV ads saying you should continue to use AOL because it will protect you from online viruses. Come again? If that’s your most compelling differentiation strategy, alignment with the current online Golden Child can’t be a bad thing.

With the deal come a couple of strategic promises to AOL. First of all, it gets a guaranteed position in Google’s sponsored search ads. Rumor has it that the last right-side sponsored position on page one is now AOL’s. Anyone who’s looked at our eye tracking report on Google knows that this is hardly prime real estate. In this spot, you can expect to be seen by about 10 percent of the visitors to the page, and capture less than 1 percent of the click-throughs.

But, this deal does mark a departure from Google’s existing model, where there are no guaranteed spots and position is determined by a combination of click-through and the price the advertiser is willing to spend. Even though the placement on the page is hardly ideal, AOL’s guaranteed slot now means someone gets bumped to page two of the search results, which means an immediate 80 percent to 85 percent reduction in the number of people who will visit that page. This is not the democratic advertising model that Google originally envisioned.

Church/State revisited.

Another rumor had Google apparently offering advice to AOL on how to get its content pages to rank better in the organic results. Again, this appears to call into doubt Google’s constant fallback position on the church/state divide, where the organic results will never be subject to any commercial influence.

My sense is that this line is getting more and more difficult for Google to define, and this trend can only continue. I’m not so sure this is a bad thing. If you read my previous column on Matt Cutts, the Google engineer that heads up the spam squad, you know that Google has been reaching out to the Webmaster community more and more. The once-locked doors appear to be opening, even if it’s just a crack. Based on my company’s experience, if you can present Google with a case where the indexing of a site isn’t going as expected, it is usually responsive in offering some advice. To me, this form of technical troubleshooting is a win/win. Google gains some insight that could help to improve the entire index, and you can find out why the hell your site isn’t being indexed properly by Google.

What is less clear is when Google passes on “optimization” advice, which is what the AOL deal appears to promise. Here, the church/state line is pretty much obliterated by the tap dance that Google is performing on top of it. And it becomes a question of whom Google is offering this advice to. Is it everyone? Is it the biggest advertisers? Is it only companies that they own a piece of? If this is indeed part of the deal, expect a lot of blog and forum fodder on this topic.

What’s in the deal for Google?

First of all, Google locks up AOL’s sponsored search business for another five years, effectively locking out Microsoft. When this currently accounts for approximately 11 percent of Google’s gross revenue, that could be reason enough. Also, financial analysts expect an imminent transfer of ownership with AOL, which could trigger a quick liquidity event for Google, minimizing its long-term risk.

But I believe the strategic value of the deal lies in AOL’s user base. True, it’s smaller than it used to be, dropping from a one-time high of over 32 million down to a current level closer to 20 million, but it’s still the largest base available anywhere. Comcast is the next closest at around 8 million (based on ISP Planet numbers). And AOL’s base is 20 million people that the company knows something about.

One of Google’s challenges has been in getting users of its tools to surrender profile information that could be used to better target advertising messages. MSN is already offering targeted search advertising, which means Google is desperate to even the playing field. Microsoft has the advantage of having years of profile information accumulated through users signing up for Hotmail or Messenger accounts. Google had to catch up, and quickly. This one deal may have helped the company do that. The one question mark is that AOL’s user base is notorious for their lack of online sophistication, being relatively new to the Internet. Does this user base come with a demographic profile that will appeal to Google advertisers?

On the face of it, the AOL deal appears to be another smart move on Google’s part. For a relatively small investment, the company seems to gain all the strategic advantages it was looking for. Google captures a large block of users with some existing profile information, it locks up an important revenue stream, and it gains access to a very important portal property without jeopardizing its current wildly successful search site. As they say up north: good trade, eh?

What Happens on the Road, Stays in the Blog

First published December 15, 2005 in Mediapost’s Search Insider

Heaven help anyone trying to lead an illicit double life on the convention circuit. Blogging and camera phones have turned us into a society of voyeurs. This is especially true in the search marketing industry. We are all content producers who publish our thoughts. During one conversation at a recent after-hours reception, we began keeping score–and realized that everyone in the conversation either had a blog or wrote a regular online column. Many did both.

It becomes even more amusing when you have one conversation over dinner at a show with a few friends, and within the next few days, all of you have posted online comments about the conversation, each from your own perspective. To find the truth, you have to triangulate the comments and discover that the substance of the conversation lies somewhere between the extremes.

This is a dynamic altering of how we communicate. The degrees of separation that divide our global community become short-circuited online. In one example, I wrote a column a few weeks ago about a conversation I had with Greg Jarboe about white hats and black hats. The event that sparked the conversation was a dinner he had with a black hat in Stockholm. A few days later, Greg was approached by someone in a coffee shop in his hometown about the column he wrote about black hat SEO. He had no idea what she was talking about, until he tracked it back to my column. Also, Danny Sullivan, in his blog, actually had me having dinner with the black hat, even though I was several thousand miles away from Stockholm at the time. Since that time, Greg has gone on to write about the same event in his blog. That one conversation has sparked at least a dozen blog posts and columns, all with slightly different takes on the actual event.

Somewhere in this observation lies something profound about the Internet. It changes the way we live. We now exist with one foot in the real world and one foot in the virtual. We are individuals, but we are also the sum of a million different parts that float around in the online world, and it’s usually search that connects those parts. We become the composite of other’s online comments about us. Our Google Doppelganger becomes a part of us, and vice versa.

Flori, my father-in-law, is an old-world Italian carpenter. To him, Gord Hotchkiss is the person who married his daughter, fathered his grandchildren, and who does something vaguely unexplainable with computers. We get along wonderfully, but our conversations center on our shared experiences: family camping trips, what my daughters are doing, homemade Italian wine, and why I’m out of town so much. Once, when I was on the road, he asked my wife why I have to speak at these shows. In an effort to explain, she Googled me. Up came about 16,000 entries, in almost every language, from every corner of the world. There was the online persona of “Gord Hotchkiss.” It was a side of me my father-in-law never knew existed. I was deeply embedded in a network of communication, and in part, that network defined me.

I find it (mostly) exhilarating when I meet new people at a conference and they’re already familiar with me because of my online presence. I tend to share a lot about my personal side, because it’s such an integral part of me. As one person said, upon meeting me for the first time, “I feel like I know your wife and kids, because you write about them.” So, my online persona extends to include my family. Through me, they’re developing a virtual presence. At this point, they’re not coming up when they Google themselves, but I assure them it’s only a matter of time.

I’m not sure we’ve really explored the consequences of this shift, but I know it’s earth-shaking in its importance. We are all now producers of content. We can all reach global audiences. We are judged by our thoughts, our observations and our intellectual mettle. We leave a footprint online. Search is the connector that introduces us to our audience.

Gutenberg’s invention of the printing press created a quantum change in the society of the 1500s. But there was still a physicality to printing. It consumed resources. It took time. Because of these physical restrictions, publishing evolved into big business, with its own controls and checks and balances. Distribution of one’s views did not come easily. Just ask any author who dreamed of getting on the best-seller list. Today, a blog post can take a few moments and no money. In a few hours, it can be picked up on a search engine. If it happens to rank well for a popular keyphrase, especially one that’s of immediate topical interest, it could attract thousands of readers in a few days.

It’s a sobering thought. Most of us feel in control of our own lives. We can be the person we wish to be. And the people who form opinions of us we usually deal with face to face. But online, people form opinions of you without ever meeting you. Our online personas rush beyond the bounds of our physical world. We hand control over our online persona to people that have no idea who we really are. They blog about us and expand our footstep, adding to the sum definition of who we are, without really knowing us.

In the old days, you could be your own person. Today, you belong to a global community. Anyone could be watching, anytime. And you thought Wisteria Lane was a tough place to keep a secret!

 

A Whiter Shade of Black

First published November 10, 2005 in Mediapost’s Search Insider

Last week I was chatting with my friend Greg Jarboe. For those of you who don’t know Greg, he’s the guru of cranking up Web visibility through effective optimization of press releases and leveraging news search. But the pearl of wisdom that I picked up from Greg this time was an offhand comment that said volumes about our industry.

Stockholm Confidential.

Greg had just gotten back from a search conference in Sweden. At said conference, there tends to be a handful of black-hat SEOs that hold court after the show shuts down, showing off their spam de jour. For those of us who primarily live on the white side of the fence (and I say primarily because one is never sure exactly where that fence is) it’s always a guilty pleasure cornering one of these dark magicians. They’re brash, confident and masterful in their manipulation of algorithmic loopholes left by Google, Yahoo and MSN. Using every tactic in their arsenal, they manipulate sites up the rankings and make fistfuls of money in the process. I once asked a black hat if he had any ethical twinges. He replied, “The odd time, but my kids are going to a great college.”

This trip, Greg managed to take a black hat to dinner. And in between the courses, a confession came out that stopped Greg in his tracks. “Black hat stuff is getting too hard. I’m actually thinking about turning legit.” What? Is this capitulation? Is Courtney Love taking up a nun’s habit? What would cause a confirmed black hatter to turn his back on the incredibly lucrative dark side of SEO and step into the light? As much as the army of engineers at Google and Yahoo would like to say it’s their constant refinement of their algorithms, I think there’s another force at work here. Online is just growing up.

Frontier Mentality.

Up to now, online has been the Wild West. The sheriff hadn’t come to town yet. Black hats could get mediocre sites to the top of the rankings because the vast majority of legit sites had no clue about search engine optimization. Reams of content were hidden in content management systems, locked off from the search engines by impenetrable dynamic urls. Ill-conceived site architectures meant redirects off the home page to destinations buried four and five levels deep. The essential title tag wasn’t even optimized. This is more common than you think. I’ve participated in a number of search workshops where some of the best-known brands in the world had their sites examined. It’s rare to see a keyword show up in the title tag.

But, slowly, things are changing. Brands are clueing into the importance of algorithmic search. Spider friendliness is usually a requirement in evaluations of new CMS solutions or site redesigns. And when you take a site that has thousand of pages of content, with rich internal linking structures and scads of legitimate, authoritative incoming links, it will jump to the top of the search results. It’s inevitable. Those are the sites MSN, Yahoo and Google want at the top of their results. Those are the sites we want to see at the top of the results. It’s the online universe working as it should.

The Settling of Main Street.

Today, these huge brands are turning to white-hat search practitioners to help unlock the full potential of their sites. At this point, it’s still a trickle, but it’s improving every day. And every time a big brand grabs a spot in that “Golden Triangle” at the top of the search results, a black-hat-manipulated site is moved a little further down the ladder. It doesn’t matter what tricks a black hatter has up its sleeve, you can’t beat the sheer bulk of these killer sites, as long as they’re properly optimized.

So, as the online geography becomes more civilized through the influx of legitimate business, black hats are forced to move off Main Street into the back alleys. There’s less territory for them to operate in. And now, they’re competing for position against other black hats who are as ruthless as they are, rather than against naïve site owners who have never heard of a meta tag or Pagerank. It gets harder to make a buck.

I’m not discounting the effort that the search engines have made to clean up spam. Google’s Florida Update was probably the single biggest blow to black hat optimization and affiliate spam. But, at the end of the day, spam’s being eliminated because better sites are being optimized effectively, allowing them to naturally claim their rightful territory in the search listings. And it’s the legitimate SEO industry that’s making that happen.

Isn’t it ironic? As the Web grows up, it appears that many of us in the SEO industry might actually turn out to be the sheriff.

Google, Search and a Brave New World

First published October 27, 2005 in Mediapost’s Search Insider

As I write this, I have literally just closed the cover on John Battelle’s new book, “The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture.” Reading it was a unique experience for me. It was addictive, like literary crack. I devoured it in huge gulps. I can’t recall the last time I read a book in such a short time.

Look, They’re Writing About Us!

For the last 10 years, the part of my life not devoted to my wife and kids has been consumed with search. So reading the book was like reading a family history. I knew many of the people quoted. I had lived through the history recounted. I even found a quote from myself in the book.

I’ve never met John Battelle, but as I read, it was like he had crawled into my brain, picked up things I’ve been thinking about for years, then rendered them whole with much more skill and eloquence than I could ever possibly manage.

“The Search” is unlike any previous volume written on search. There have been several “how-to” books that have explored the mechanics of search, both from a user’s and marketer’s perspective. But Battelle for the first time explores search as a business and social phenomenon. Not only that, he muses that it might be THE social phenomenon, with world-shattering implications. For anyone who has grown up in search, it’s like seeing your high school sweetheart become a world-famous centerfold. “See, I told you she was hot. No one believed me!” It’s public confirmation of everything we’ve been trying to tell people for a decade.

Battelle has somehow managed to get access to the people who literally invented the industry. He has obviously immersed himself in the world of search, but has brought a 50,000-foot view that allows him to explore a much larger picture from a slightly different perspective. He looks at what search may evolve to become. As the founder of Wired and The Industry Standard, Battelle has the journalistic chops to dig out the good stuff and get it right, but he maintains a wide-eyed wonder at the sheer enormity of the social implications.

A Peek inside Google’s Kimono

What emerges is a fascinating glimpse into search as an emerging phenomenon, and a particularly astute look inside the relatively private world of Google. As regular readers of this column know, I’ve devoted more than a few words to this perplexing company.

I remember telling someone at a conference once that Google alternatively strikes me as pure genius, and as the proverbial room of monkeys randomly striking at typewriters. The truth, according to Battelle, is that Google is both. The monkeys are the genius. And the hope is that in the process they’ll reinvent everything.

Google, formed in the petri dish of hypergrowth unlike anything ever seen before, is either heading for the world’s largest comeuppance, or it may just change the world. Although Battelle is remarkably even-handed in his portrayal, there’s no doubt that he’s rooting for Sergey Brin and Larry Page, Google’s founders.

Google is advancing on a thousand different fronts at once. With their acknowledged brilliance, arrogance and determination, Brin and Page have built a company that worships at the altar of technology. The high priests are legions of engineers, all given explicit instructions to invent something cool. There is little in the way of top-down strategy. Page is quoted as saying that he’s not a big believer in strategy. Rather, the Google Brin and Page envision is a support system for rampant entrepreneurialism, with grassroots innovation ultimately driving the direction of the company. The multi-million dollar Founders’ Award attaches heavy bonuses to this activity, giving employees a reason to stay in the corporate nest, rather than founding their own companies and ultimately hoping to be acquired again by Google.

But a paradox lies at the heart of Google. For all its encouragement of grassroots innovation, the company is also portrayed in the book as a serfdom, with Brin and Page as the iron-fisted and mercurial overlords prone to micromanaging. There is one particularly vivid scene where CEO Eric Schmidt finds Brin shaking at his desk, suffering through a bad back, meticulously poring over 500-plus applications for internal development projects, to see which will get his stamp of approval.

Despite the name, “The Search” is not just another search book. It’s a probing look at the crux of what makes the Internet such a powerful force for change. It explores the fabric of our society, and makes us realize that fabric could be ripped apart by forces already unleashed by technology. I’m not sure it will be as compelling a read for those outside the industry. Like most things to do with search, there will likely be more who say “Huh?” than “Wow!”

If I Had $4 Billion: Part One

First published September 1, 2005 in Mediapost’s Search Insider

Get your ringside seats. The fight is about to begin. The flurry of announcements coming out of Google and Yahoo! recently show their preparations for the onslaught of MSN Search. And one of the most interesting was Google’s announcement of another issue of 14.6 million shares, to give them an estimated $4 billion cash injection.

First, let’s look at the recent Google announcements. Google Talk, the new IM application, is in beta now, which probably explains the current lack of advertising; don’t expect an ad-free zone for long. A few days before the IM report, Google announced the new version of their desktop search appliance with new features, such as RSS integration and self-updating navigation. To top it off, The New York Times ran an article claiming Google is taking Microsoft’s position as Silicon Valley’s favorite villain. According to the article, Google’s huge roster of engineering talent can do almost anything it puts its mind to, basically freezing start-ups in their tracks.

Look closely at the progression and a trend occurs: Get online users to spend more time on Google real estate.

Yahoo! has taken a different approach. The recently inked deal with Verizon pushes Yahoo! into the broadband biz. Again, it’s another attempt to stake a claim with a user base by introducing a more defensible touch point than search is currently.

The problem with search is the ease of switching. Going from Google to Yahoo! or MSN is a quick click. There are no barriers to exit. Google is painfully aware of that fact. When it comes to claiming online real estate, Google is in a vulnerable position.

Yahoo! has had a head start in creating a more complete user experience, as its roots are in the portal space. Ironically, it’s the same thing that almost killed them as a search property a few years ago. At that time, Google’s no-frills approach and clean interface captured the lion’s share of search traffic. Now, as our relationship with search evolves, Yahoo!’s more holistic approach might be a key factor in survival.

Rockefeller’s Choke-Point Strategy

John Rockefeller was the master of identifying and controlling the choke points of an industry. These are the points that allow absolute control over access to a market. With Rockefeller, it was the distribution of the oil that drove all industry. Today, the choke point is access to the desktop. And guess who’s sitting right on top of it? Mr. Gates. In fact, he has a double hold on us. The reason Microsoft destroyed Netscape in the browser war was to control a choke point. Now, as long as Window’s dominates as the operating system (OS) we use, Microsoft controls the ultimate choke point. Nothing can get to us through our computer unless it passes through the OS first.

Currently, Google is building a war chest. They know as long as they’re not in control of the choke point, they’re incredibly vulnerable. The recent activity shows Google desperately trying to add layer upon layer of touch points with its user base. Chat through Google. Network socially through Google. E-mail through Google. Search the desktop through Google. Unfortunately, each layer is built on the Microsoft OS. It’s like building your fort on enemy territory. At some point, the landlord may just kick you out. And I’m not sure $4 billion is enough to change that.

Ready to Rumble?

Google is beginning to build its defenses. Yahoo! is betting on maintaining access through its broadband subscribers. Meanwhile, Microsoft is still lumbering to the starting line.

Back to my original speculation. If you were Google, you had access to $4 billion in cash, and you were taking on Microsoft on their home turf, what would you do? E-mail me at gord@outofmygord.com and let me know. I’ll put it together into the Search Engine War Book in the next column.

Deep Thoughts from the Googleplex

First published August 18, 2005 in Mediapost’s Search Insider

It was one year ago that I wrote my first Search Insider column. I remember that by the fact that I wrote about the San Jose Search Engine Strategies Show and now here I am, back in San Jose, going for my semi-regular search marketing total body immersion. Thank goodness this only happens occasionally. It can do strange things to one’s perspective to spend four days with thousands of people who live, breathe, and eat search. Compare this to my other life, where my wife is still not exactly sure what I do for a living.

For those of us privileged to live on the inside of this industry, we gain a glimpse into a fantastic and highly illogical world. It’s a world where empires can grow from mere ideas overnight and where vast territories can disappear just as quickly. Intellectual capital is the currency here, and it can be redeemed only through the acceptance of the masses. The winners in our world are the ones that pull the gem of an idea, nurture it into life, and find it picked up by the world. It’s like throwing little bits of our soul at the public, and hoping one of them sticks.

Case in point: Google. While here in San Jose, I had the opportunity to visit the new Googleplex in Mountain View. I walked through the immense complex (on the morning after the Google Dance, so I was still bleary-eyed) and joined my host for a hot breakfast in Google’s gourmet cafeteria, one of many places to grab a meal. I was surrounded by impossibly young, blue jean- and t-shirt-clad Googlites (Googlians?) that were all searching for the next big idea that will resonate with the public. They bellied up to the counter for a custom-made omelet or fruit smoothie, and then gathered around tables to start discussing the future, built in their terms. As my host said, this was the kingdom of the engineers, and Google is still very much an engineer-driven company.

In our world, this is as close to Camelot as it gets. Our society has switched paradigms. Many of us no longer look to our governments or spiritual organizations to make the world a better place. We’ve put our faith in the raw power of ideas. And if we happen to make a few billion in the process, so be it. Empires like Google no longer need assembly lines or oil wells, smelting plants, or factories to grow and prosper. All you need is people with bright ideas.

It was a telling note that my host told me that the new Google campus was in fact the old Silicon Graphics headquarters. As technology passes on, a new king has come to occupy the castle. The old guard has passed the torch to the new. He acknowledged the irony and said, “Hopefully we’ll be able to stay here awhile.” Meanwhile, the engineers downed their omelets and smoothies, blissfully unaware of the fact that, more often than not, history is doomed to repeat itself.

As I took in the sheer immensity of the complex, with all its high-tech touches and iconic lava lamps, I couldn’t help but think that all this came from one single idea. And it’s not even that defensible an idea. The Google Empire has been built from a clever thought, a shard of the souls of Mr. Page and Mr. Brin that has lodged in our collective bosoms. By making “Googling” a verb, they have built an enormous company. And they’ve done it in seven years. Yet no one seems aware of how ephemeral this all is. The phrase “Castle in the sky” couldn’t help but come to mind.

I felt torn between the father in me and the self-acknowledged tech geek. Part of me loves the idea of a world built on sheer intellectual horsepower. I am excited by the constantly shifting challenges and the persistent question: “What’s the next big idea? Who could be the next Google?” As I often say, working in this industry is like dancing on quicksand. But the dad in me says: “Be careful. This could all come crashing down tomorrow.”

Murthy vs. the Goliaths: The Power of Search at Work

First published August 9th in Mediapost’s Search Insider

In the good old days, online was the place where David could beat Goliath. It was the forum where success was decided not just by market cap or the size of your advertising budget, but by nimble strategies and just plain chutzpah. It was the place where the little guy could triumph and slam one in the face of the corporate behemoths. But those days are over, right?

Not quite, at least not in the legal field.

As part of a client project, I was using Hitwise to determine who the category leader was in law firms. Who was grabbing the biggest slice of the potential 100 million visitor-per-month pie? After sorting through record search sites like Intelius, people finders like US Search and directory sites like Lawyers.com, I started looking for those huge firms that you would expect to find on top. Here are the usual suspects:

Baker & McKenzie: 3,246 attorneys, 69 offices around the world
Jones Day: 1,822 Attorneys, 29 offices around the world
Skadden: 1,822 Attorneys, 22 offices around the world
Latham & Watkins: 1,627 Attorneys, 22 offices around the world

(The information on the firms comes from the Internet Legal Research Group and the firm’s own sites.)

And the winner was….

The Law Office of Sheela Murthy.

Who?

Murthy.com is the official online home for a small immigration law firm based in Owings Mill, Md. There are just nine attorneys in an office that’s probably smaller than the executive washroom at Baker and McKenzie. Yet, Ms. Murthy is kicking the big guys around the online block. And we’re not talking a slight edge in traffic. According to Hitwise’s market share report, Murthy.com captures 10 times the market share of these four huge firms combined.

I must admit, I was a little skeptical at first. So, I tried some quick checks on Alexa. Sure enough, the small firm from Owings Mill was decimating the big guys when it came to generating Internet traffic.

Frankly, I’m at a bit of a loss to explain this. The only explanation must be that the big guys don’t really care. This is surprising, considering that well over a million people searched for some kind of lawyer on the Yahoo! network in May. And that’s just on Yahoo! Google’s numbers would easily double this. That’s a minimum of 5 million potential clients up for grab every month, and the four largest firms in the United States haven’t even optimized their title tags. You guessed it. Just the name of the firm shows in every case!

As search marketers, we often assume that the whole world knows about the power of search. Sometimes, it takes a blatant example like this to make us realize that a large part of the world is still waking up to the new reality of online marketing. And, as long as the giants are sleeping, there’s still the opportunity for the Sheela Murthy’s of the world to eat their lunch.

Come on, admit it: Aren’t you going to be just a little bit sorry when those days are gone?

The Separation of Church and State in Search

First published August 3, 2005 in Mediapost’s Search Insider

The people at the major search engines like to talk a lot about the separation of church and state. They use the historical reference to explain the unbreachable divide between their organic listings and the sponsored ones, and the departments that govern each. It represents some ethical buffer zone between the two sides of search.

The History of Church and State

The reference goes back to Thomas Jefferson and the U.S. constitution. It began when “a wall of separation between church and state” was entrenched in the first amendment to the constitution by restricting Congress from passing laws respecting the establishment or prohibiting the free exercise of religion.

In looking at search’s use of the term, a more relevant comparison is the adoption of the term by the newspaper and journalism industry, where it described the division between the editorial and the advertising departments. The idea was that budgets spent on advertising shouldn’t have any influence over the journalistic integrity of the reporters. They should be free to pursue the story without fear of the impact it might have on advertising revenues. Good in theory, but of course, theory often breaks down in the real world.

Church and State Online

Church versus state is often a fiercely guarded concept by the keepers of the editorial content. They cite it often, and usually passionately. Search (especially Google) is no exception. The term is mentioned often when the thorny issue of organic optimization is raised. I heard Google co-founder Larry Page quoted once as saying, “If it’s good for search engine optimization, it’s bad for the user.” The whole church versus state dilemma is at the root of search’s bipolar relationship with search marketing practitioners. They love our money, but hate the fact that we want our clients to appear in the prime section of the search results page, the top three or four organic listings.

As in most things, I find this is all a matter of perspective. Search engines have their perspective, as do advertisers and the agencies that represent them in search. For a different view, let’s look at it from the user’s perspective.

Do Users Separate Sponsored and Algorithmic Search?

When we turn to a newspaper, we can do so with a number of intentions. We can be looking for news, sports scores, the latest weather, how our stock did, or perhaps we just want to do the crossword puzzle. When we find a story that catches our interest, we spend some time on that page and may see an ad that happens to be adjacent to the story. Chances are the relevancy of the advertising message to the news story we were reading is minimal. It’s more a matter of positioning and happenstance than anything. If I’m Charles Schwab and I consistently buy an ad on the stock report page, that’s about as far as my contextual targeting will go.

But what if I could tell when someone was going to the paper to look for the latest share price on one particular stock, and I placed my ad, highly targeted to that stock, right next to the stock price? Is this maintaining the idealistic standard of separating church and state? According to ConsumerReports, Ralph Nader, and many others, the answer is a resounding no!

When we do a search, we’re looking for relevant results. The search engines use the same criteria to serve both organic and sponsored results: keyword relevancy. And the results are presented on the same piece of real estate, the search engine results page. In fact, as we confirmed in our eye-tracking study, the search engines are happy to use our natural scanning behavior to ensure that sponsored ads are placed in the most prominent section of the page. Other than a small label identifying the results as being paid, there is little to distinguish the two results.

Maybe Some SEO Is Good, Mr. Page…

It seems to me that the search engines want to have their cake and eat it too. When it suits them, they’re more than happy to blur the lines between algorithmic content and paid content, using the same rules and real estate to present both. But as soon as a marketer tries to use this “hot zone” created by the engines themselves to effectively market, the search engines cry foul.

I am fully aware that there is a thriving industry that tries to constantly beat the algorithms. I, as a user, am frustrated with the pollution of results by affiliates and other aggressive marketers who use spam tactics to push garbage sites up the ranks. As a user, I want the search engines to do anything they can to clean up black-hat spam.

But the fact is, there are organic optimizers that are doing the search engines a huge favor. We have several clients that are recognized leaders in their industry. They have thousands of pages of useful content that searchers should be able to find. But, for various reasons, they aren’t in that “Golden Triangle” for the right terms. It may be that no one has tried to find out what the right terms are, or it could be a missing title tag, or site architecture that confuses the spiders, or one of a hundred other technical reasons. We’re helping Google, Yahoo!, and MSN do their jobs more effectively. Yet, as soon as I sit down at a table with a representative from an engine and the conversation turns to organic optimization, it turns awkward and within a minute I’m guaranteed to hear the words “separation of church and state.”

The fact is, despite the intentions of Thomas Jefferson, church has never been successfully separated completely from state. The real world lives somewhere in between.

A Battle Plan for MSN Search: Innovation and Integration, not Inundation

First published March 17, 2005 in Mediapost’s Search Insider

We know Microsoft wants to win the search battle. Bill Gates has gone on record repeatedly and publicly saying his biggest business regret is not having recognized the importance of Internet search soon enough (this would be the same Bill Gates who said the Internet would never amount to much). And during the Super Bowl, an ad for MSN Search invited millions to try the new, more precise, more powerful search engine.

Rumor has it that Microsoft has a gargantuan battle chest set aside for further advertising. The intention is clear. We will keep being hammered by MSN Search ads until we give in and give up on Google.

But at the Search Engine Strategies Conference in New York, Jupiter Media Analyst Gary Stein reminded us of something. Google got to where they are with a total ad budget of… $0. They just built a better search engine.

I think the future success of MSN lies not in showcase television ads, but in giving us a reason to switch.

Google Is Not Invincible It sometimes appears that Google has a stranglehold on search. Take a room full of people pretty much anywhere on the planet and it’s a safe bet that most of them will be Google users. But recent research has shown that there may be a few stress fractures showing in our love affair with Google. I don’t think it’s because Google has done anything overtly to cause us to look elsewhere. It’s just that they don’t have the clear performance advantage they once did.

Again, Gary Stein had an excellent point. There’s no significant user pain involved in switching search engines. You don’t have to reinstall software, reformat files, or change computers. One day you’re using Google, and the next, MSN. It’s that easy. In fact, you can switch search engines in the middle of a task. Millions of people do it every day. Google’s brand equity can disappear in the time it takes to click a mouse.

Putting Search One Click Away In any type of measurement of search engine market share, there emerges an interesting contradiction that speaks of another vulnerable area for Google. If you do a survey and ask people what their preferred search engine is, my bet is that at least 75 percent or more will say Google. In the last survey we did with 1,600 participants, the number was almost 83 percent. Yet, when you look at Nielsen or comScore’s market share numbers, Google ends up with somewhere between 35 and 45 percent of the market. So, if three out of four people prefer Google, why don’t they own a proportionate share of searches?

The reason is that we’re basically lazy. If we’re on MSN and a search box is handy, we won’t bother going to Google. This is one reason why the battle of the search toolbar heated up so quickly. It also points out the precariousness of Google’s position. Yes, we love Google, but ask us to spend another three to four seconds to type in the URL and we’ll head off with the first search opportunity that catches our eye. Online, brand love is a very fickle thing.

It’s Time to Raise the Bar, Again What we really want is a better way to search. Something that gets us just the destination and information we want, quickly, seamlessly, and, while you’re at it, it wouldn’t hurt to wow us with some new innovation as well. I think we’re on the threshold of another breakthrough. It’s time for a giant leap forward in search. There are a number of startups that are knocking on the door, but we’re waiting for a search site with enough market traction to really up the ante with search.

The blizzard of incremental improvements we’ve seen coming out of the major players is nice, but the market advantage they give only lasts for a week or two and then the competition evens the playing field again. Somebody has to stake the high ground and keep it for more than a few days.

The Secret? Search at the OS Level I believe the functionality to make this quantum leap forward in search has to rest at the operating system level. Search needs to be more fully integrated into our daily online activities. It needs to achieve the transparency that can only happen when search works in the background, totally integrated with programs and the basic functionality of our computer.

This is where MSN Search can deliver the knockout punch to Google. And I believe Google knows this. I’m guessing a fair number of the hundreds of Google PhD’s are wrapping their collective intellect around this blockbuster challenge. Google has to gain a foothold on the desktop to effectively fight off Microsoft’s attack. And this means surrendering privacy. Privacy is something we are protecting more and more diligently. We won’t give it up easily.

But Microsoft has already integrated themselves at the root level on our desktop. They don’t just own the high ground, they own the whole landscape. And when they can deliver a search experience that’s truly better than the competition, they’ll have already won. It won’t take another Super Bowl ad.

Microsoft, you had us at hello.

Rashtchy’s Golden Search turns Platinum

First published on Feb 3, 2005 in Mediapost’s Search Insider

On November 9, 2004, Piper Jaffray analyst Safa Rashtchy dropped a bombshell on a small handful of people at the New York Ad:Tech show. He doubled his search revenue projections for the next five years. And, he bumped these projections less than two years after they originally came out.

Back then, Rashtchy’s $7 billion by 2007 revenue projection was quoted everywhere. You couldn’t turn around without seeing a reference to these amazing growth predictions. And now, he nonchalantly walked up to the podium and said search revenue in 2007 will be more like $13.5 billion! I was sitting in the audience and my jaw dropped.

But a strange thing happened this time. Nobody seemed to care. In preparing for this column, I scoured the Internet for any mention of Rashtchy’s exciting announcement. I found nothing. While it’s not surprising that the announcement missed the mainstream press, I can’t believe our own industry didn’t pick up on it. I finally had to resort to contacting Rashtchy’s team and getting a copy of his presentation.

In the process, I asked Rashtchy why the announcement didn’t seem to gain attention. His response indicates that the lack of attention means search is now accepted with more credibility: “I think search is now accepted as a big business. You have a $60 billion company on the market doing only search, so people are saying that with these valuations, we expect that you will up your estimates significantly.”

Sorry Rashtchy, Better Late than Never…. I think the readers of this column would be well served to get the high points of Rashtchy’s announcement, so let me share them with you.

First of all, the growth numbers. In March 2003, Rashtchy estimated that worldwide search revenues would hit $7 billion by 2007. Just a few months later he was quoted as saying that these numbers are likely too conservative. With last November’s presentation, he had the opportunity to bump those numbers up.

Rashtchy now feels we’ll not only hit that target, but surpass the 2007 – $7 billion mark this year. Next year, he predicts search revenues to top $10 billion, and then hit $13.5 billion in 2007, $16.2 billion in 2008, $19.8 billion in 2009 and top $23 billion in 2010.

Factors of Growth Rashtchy feels there are a number of revenue drivers fueling the growth: • The increasing use of search by big business

  • A second wave of small business just discovering search
  • The international growth of search
  • Discovery of the branding value of search
  • The growth of contextual search, with local search perhaps poised to take over

 

In addition, he sees four immediate and fundamental drivers of search growth. He collectively refers to them as T.C.P.C.

Traffic – More people doing more searches, especially commercial searches Coverage – Expansion of keyword baskets, monetizing more search terms Price – Increasing prices per click Conversion – As we get better at converting clicks to buyers, advertisers are willing to bid more

Local Search Rashtchy feels that local search could become a significant driver of new search revenue. I know there are mixed opinions about this (I for one agree with Rashtchy on this one and have said so in previous columns), but I think the salient point here is that local search, if successful, dramatically increases the market size for Google and Overture.

It takes search from a global consumer activity and brings it back home. It ties the Internet much closer to our day-to-day shopping activities. It will take a few years for local search to make much of a difference in overall search revenues, but once felt, the impact will be significant.

Search Efficiency – It Still Can’t be Beat In comparing methods for customer acquisition, search still comes out far ahead. Piper Jaffray estimates the average customer acquisition cost for search to be between $7 and $10, compared to $15 and $25 for Yellow Pages, $40 to 80 for e-mail and $60 to 80 for direct mail. Search is growing because it works.

Bottom Line Rashtchy summed up with five conclusions that state the future potential of search in no uncertain terms: – Search is likely to become the most successful marketing method for all businesses

  • Local search is a huge force that could change the dynamics of search for online-only merchants, putting them at a big disadvantage
  • Concepts like broad match could make search an effective soft sell, suggestive advertising mechanism
  • Merchants should focus on customer conversion and extending the customer life cycles
  • Search providers should focus more on merchant conversion rates and offer lower charges for broad match and contextual search. They should also focus heavily on local and international expansion.