The Commercial Web

The Washington Post is running an article on the pay-for-placement practices of the most popular search engines. It is a more prevalent practice than most people believe, and in many cases, it is actually insidious, rasing flags with consumer watchdog groups who have filed complaints with the FTC.

A couple years ago, Overture (then called GoTo.com) became one of the first, popular search services to offer up its search results to the highest bidder. So, when a user searches for a keyword phrase like "cape cod" on Overture, they are presented with the links of those companies which have bid on that specific phrase. In the case of "cape cod," for instance, companies like Expedia have bid over $.30 for each person that clicks on their listing.

At the time, most of the then major search engines laughed at Overture, arguing that no one would pay to be in a search engine. Instead, search engines like Yahoo!, Excite.com, and AltaVista concentrated on becoming portals. Remember "portals," that failed attempt to trap users...errrr...ummm...I mean, convince users that a search engine was a destination in and of itself rather than a means to an end.

Now, however, most of the major search engines are singing a different tune. Most have replaced some, if not all, of their search results with those from Overture. In return, Overture reportedly gives the search engines over half the money made off the listing clicks the search engine provides, a huge motivation to floundering dot coms, struggling to scrape up advertising dollars.

So, what's the problem with this? Well, several years ago search engines competed to provide the most accurate or relevant results for each search phrase. In addition, they pushed technology to its limits, indexing millions of Web pages in the quest to be known as the largest or most complete database of Web sites on the Internet.

This has all changed. Most search engines no longer operate their own database, instead licensing those from companies like Inktomi and Fast. Most major search engines have given up in the race to provide the most accurate and complete results. The true search results are receeding deeper into the depths of their sites, replaced by a new breed of ad on the homepage.

The legal issues are profound with companies purchasing the names of their competitors and their products (most of which are trademarked). As noted above, consumer watchdog groups are concerned about the implications to the end users, who think they are looking at the best site for a particular keyword phrase but are really looking at the ad of the highest bidder. Bait and switch anybody?

Relax, all is not as bad as it may seem. There is still some honor among search engines. Amidst a list of young up and comers is the search powerhouse Google, whose site is marked by its spartan design and whose results are almost eerily accurate. In addition to pioneering new search technologies, Google's index has grown to an unrivaled 2 billion+ Web pages.

This is not to say that Google does not support advertising. As a search for "Cape Cod" reveals, however, Google's ads are clearly marked as such and are visually set apart from their search results. In addition, Google does not allow companies to purchase ad space for keywords for which they are not relevant.

Does this mean that Google is the only search engine to use? No. Google is simply one useful tool for searching the Internet. Web sites like the Open Directory Project categorize Web sites by hand, which can be useful when looking for general products and services (i.e. when you're not exactly sure what you're looking for yourself). These directories also offer Web sites categorized by region, making it easier to find companies who offer a particular service in your area.

So where does that leave companies like Yahoo? Well, in Yahoo's case, their local movie listings, online games, and free e-mail may still be enough of a draw to counteract the relative quality of their search results. Other companies, however, will not be so lucky.


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