The Search Light Newsletter
Guiding your site to the top of the search engines... (23 Feb 2003 - Vol 3 Issue #2)
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Dear Reader,

It's only February and already this year the search industry has had more plot twists than a daytime soap. Yahoo's bought Inktomi, Overture's bought AltaVista and MSN's bought time by renewing their deal with Inktomi until 2005. 

All these developments have made other key players understandably nervous, especially LookSmart with their MSN deal now hanging in the balance. Our feature article this month is an article with LookSmart Vice President, Dakota Sullivan, with his take on how LookSmart plans to survive the industry shake up.

Before I go, a quick note that if you haven't already purchased our indepth report Search Engine Compatibility and the Top 100 Australian Public Company Web Sites, now's the time to do it - because for a limited time, we have dropped the 
price by 50 percent!

Enjoy this issue and remember to visit our daily Search Engine News Blog for the latest industry news and gossip.

Till next time - wishing you high rankings...



 

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In this issue... 
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* Interview With Dakota Sullivan of LookSmart 
* AltaVista Snapped Up By Overture 
* Terra Lycos Slashes Workforce by 20 Percent 
* Overture Doubles Minimum Bid for Advertisers 
* Sponsorship Notice 
* MSN Extends Deal With Inktomi 
* Nitty Gritty of Writing for the Search Engines 


Interview With Dakota Sullivan of LookSmart
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By Kalena Jordan of Web Rank Ltd.

Vice President of LookSmart, Dakota Sullivan, is apparently a very busy man, judging by the amount of chasing I had to do to have him respond to my questions. Nevertheless, he finally took time out to be interviewed and I'm happy to share the results with you below.
 
In the interview, Mr Sullivan reveals how the Yahoo/Inktomi deal will affect LookSmart, the new features LookSmart will be introducing for Small Business Listings customers shortly and why he thinks WiseNut is a better search engine partner for the major portals than Google:
 
(WR) = Web Rank, (DS) = Dakota Sullivan 

Question 1 (WR) - With Yahoo purchasing Inktomi, how will this affect LookSmart's search results?
 
(DS) LookSmart, Inktomi and Yahoo are discussing our relationship going forward. For now, it's business as usual, with LookSmart listings being distributed throughout the Inktomi network, and Inktomi providing fall through results on LookSmart.com and on LookSmart's hosted properties.
 

Question 2 (WR) - A recent email from LookSmart Public Relations staff mentions "The Yahoo! deal makes LookSmart prime for partnership (or the picking!)". Are LookSmart currently looking for new business partners? Have LookSmart received any take over offers?
 
(DS) LookSmart already partners with more than 100 major portals, search engines and ISPs including MSN, About.com, AltaVista, Netscape, Inktomi, InfoSpace, Cox Communications and Road Runner in the US, MSN in Japan, Australia and the UK, Lycos in Japan and Yahoo in Australia. We are continually in discussion with other portals and search engines in the US and around the world, as we expand our distribution network. 

 

Question 3 (WR) - Following the industry backlash last year when LookSmart moved from a directory to a pay per click model, there seems to have been a large loss of search market share and customer loyalty. Does LookSmart now regret their change of business model and are there any plans to counter the market share loss?
 
(DS) The truth is, our customer base has grown significantly since last April. At that time, a number of businesses had paid a one-time fee to be reviewed for our search directory, yet we had no customers paying an ongoing fee. Today, we have more than 30,000 businesses renewing their accounts with us each month, and actively participating in their relationship with us.
 
This spring, we'll be introducing the first update to our Small Business Listings product. The update will give customers more control over their account management and performance tracking, new tools to optimize their campaigns, and reduce costs for adding listings and making changes to their listings. Here are some of the new features you can expect:
 
1) Simpler submission of new listings - automated checks that look for incomplete submissions or potential violations of editorial guidelines, ability to automatically upload a large number of listings for our customers who have applicable contracts (our larger clients), and greater detail around guidelines and submission requirements.
 
2) Flexible options for grouping listings together - Multiple listing campaigns can be grouped together within a single billing account or each listing campaign could be set up in its own account, each with its own billing. (Note that monthly budgets can already be set up for each campaign).
 
3) Different levels of on-line account access - Several people can be given access to the same account, but each person would have their own log in and password. Additionally, each user could be given a different level of access to the account; for example, one user would just be able to see campaign information, but not change it, while a second user had permission to view and edit campaign information. This will be highly beneficial to SEOs, agencies or other people who manage listings on behalf of clients.
 
4) Ability to set flight dates - ability to set a specific start date and end date for a particular listing campaign. This is especially relevant to advertisers with seasonal products or promotions. (Note that monthly budgets are already available to advertisers to help manage spending levels).
 

Question 4 (WR) - That same email from LookSmart Public Relations staff talks about how "LookSmart is plotting against Google". Can you explain this?
 
(DS) Google provides an excellent search experience, and has helped raise the bar in terms of search relevancy for the entire industry. However, Google's rapid growth has come at the expense of its partners' search franchises. Most new Google users are former Yahoo or AOL search loyalists. Our position is that the optimal search engine partner for the major portals is a company that delivers best of breed search relevancy, yet does not compete with their brand for ownership of the search user. With our purchase last year of WiseNut, a world class, next generation search engine, we're focused on meeting this need. 

 

Question 5 (WR) - There have been some complaints in the various search engine forums about the inability to clearly track traffic from LookSmart pay per click campaigns or even clearly track keywords which will trigger an appearance of their listing. Given click-tracking is vital to ROI measurement and standard with PPC models like Overture and Google AdWords, do you plan to introduce a more transparent click tracking and reporting system in the future?

 (DS) Today, LookSmart enables and encourages our larger advertising customers, who work directly with dedicated account managers, to add URL tracking to their LookSmart listings. This spring, LookSmart will be expanding this functionality to Small Business Listing customers who use our web-based platform. At that time, both large and small advertisers will be actively encouraged to include their own tracking on submitted URLs, whether the site is submitted using our on-line forms or via our account management staff. 

 

Question 6 (WR) - According to this Ezula press release from 2001, LookSmart have partnered with Ezula. According to Scumware.com, there have been suggestions that LookSmart's partnership with the Ezula/TopText plugin produces false PPC clicks due to the way TopText siphons off traffic from other sites. With no way to track clicks and no accountability measures in place, people are understandably suspicious that their clicks are not "genuine" and instead come from TopText and affiliate links. Can you comment on this?

(DS) LookSmart no longer has a relationship with eZula. 

 

Question 7 (WR) - Given LookSmart results now rely largely on Inktomi and MSN, what does a listing in LookSmart offer customers these days? Why should people advertise on LookSmart when they can get high rankings in MSN using Overture PPC?

(DS) Actually, LookSmart serves >45 million search results per day on MSN, About.com, AltaVista, Netscape, Inktomi, InfoSpace (Excite, WebCrawler, MetaCrawler), Mamma.com, Cox Communications and Road Runner. According to Media Metrix Digital Media Audience Ratings, LookSmart search listings reach more than 77% or 4 out of 5 U.S. Internet users each month through this network. 

Specific to MSN, LookSmart's paid inclusion listings are an important complement to Overture's pay-for-placement listings for a number of reasons:

Web Rank would like to thank Dakota Sullivan for taking the time to respond to our questions.

 

AltaVista Snapped Up By Overture 
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Internet search company Overture made the shock announcement this month that it would be purchasing search portal AltaVista from CMGI Inc. for $140 million in cash and stock.
 
In their end of the deal, to be completed in April, Overture will pay AltaVista in common stock valued at $80 million, plus $60 million in cash and assume certain AltaVista liabilities. The deal represents a strategic move by Overture to expand their current product offerings outside the realm of pay-per-click and to start competing with rivals such as Google and Yahoo in the mainstream algorithm-based search market. 

According to Overture's Media Release on the announcement:

"The acquisition will enable Overture to offer a significantly enhanced Web search solution to portals, Internet service providers (ISPs) and other destination sites, as well as additional marketing opportunities to the company's large base of advertisers." 

The purchase decision was also thought to be a direct result of Yahoo's proposed $235 million acquisition of Inktomi. Overture currently uses Inktomi technology to provide back up algorithmic search results to their paid results, calling these listings "backfill." Yahoo's purchase of Inktomi may have put Overture's partnership with Inktomi in jeopardy, or made their use of Inktomi technology no longer financially viable, meaning they had to either develop algorithm search in-house or look elsewhere.  Purchasing the struggling search portal AltaVista appears to have been the preferred solution. 

According to observers, Overture plans to license AltaVista's technology to its customers, which include Yahoo, MSN and AOL Europe. Overture also will use AltaVista.com to test new search services and marketing products for its advertisers. In a conference call to investors, Overture president and CEO, Ted Meisel, said that AltaVista would open additional revenue streams for Overture and build on its pay-per-click advertising by giving marketers the option to participate in AltaVista's paid-inclusion program. 

With Yahoo supposedly developing their own in-house paid listings program and moving into Overture's paid search market territory, and now Overture making their foray into the algorithmic search industry, it's abundantly clear that search continues to be the major area of growth in the online advertising industry. 

 

Terra Lycos Slashes Workforce by 20 Percent 
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In a serious cost cutting measure, Spanish Internet Search firm Terra Lycos sacked more than 20 percent of its United Staff staff this month, bringing total US staff down to 500. The cuts were apparently necessary in light of major losses for the company, a direct result of a worldwide slump in online advertising expenditure. The across the board job losses impacted several offices nationwide, including including Waltham, Massachusetts, New York, Miami, San Francisco and California. 

The cost cutting measure comes amid extensive management shuffling, sparked 3 months ago by the resignation of Terra Lycos' former head of U.S. operations, Stephen Killeen.

 

Overture Doubles Minimum Bid for Advertisers 
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Overture has doubled their minimum bid for U.S. PPC campaigns from USD 0.05 to 0.10 and advertisers are far from happy. The warning signs started flashing when Overture UK announced last month that their minimum bid was going to increase from £0.05 to £0.10 from February 6.
 
Overture U.S. customers had their fears confirmed with the arrival of an email from Overture on February 8, with the USD minimum bid increase taking immediate effect. Thankfully, existing bids between 0.05 and 0.09 are being "grandfathered" at their current max bid for the foreseeable future. But if advertisers decide to change existing bid amounts or add new bids, they must comply with the new minimum. 

Interestingly, long-term advertisers at Overture who retain grandfathered listings ranging from 0.01 to 0.04 (prior to Overture's last minimum bid increase to 0.05) will see their minimum bid increase to 0.05 from March 29.

The price hike signals a significant change in Overture's target market over the years. Because of the company's increasing popularity, their administrative and overhead costs have increased to the point where it make sense for them to target large scale or high-end advertisers and spend less time dealing with thousands of smaller firms and individual webmasters. Unfortunately, such economies of scale mean smaller advertisers once again lose out to those with deep pockets. 

Fortunately, Overture's shift in focus provides an enormous opportunity for other PPC search providers to step in and gather up Overture's so called "left-overs". Overture's biggest competitor, Google AdWords, still offers a USD 0.05 minimum bid, as does Kanoodle, Ah-ha, FindWhat and Europe's most popular PPC engine Espotting. In fact Kanoodle is offering Pandia readers a free $5 PPC account with no deposit required. There are of course many other smaller PPC players who will be celebrating Overture's price increase because it gives them an opportunity to increase their market share.

As Pandia comments on the subject: "Overture is one of the most important pay-per-click text ads providers on the Net. When Overture changes its price structure, this has consequences for the whole industry". 

 

Sponsorship Notice 
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MSN Extends Deal With Inktomi 
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Search portal MSN surprised the industry earlier this month with their announcement they had renewed their deal with Inktomi through to December 2005. The non-exclusive deal sees Inktomi continue to provide secondary search results to MSN, who also uses LookSmart paid search listings as part of their search results. Following Yahoo's recent decision to purchase Inktomi in April, speculation was rife that MSN would dump Inktomi due to competitive concerns about their largest rival. The deal extension has ended such speculation for now, although things may change after the Yahoo / Inktomi deal becomes official in April. 

According to a February 14 filing with the Securities Exchange Commission, MSN contributed USD 5.6 million in revenue to Inktomi during the December quarter, with USD 5.1 million contributed indirectly through paid inclusion and USD 500,000 contributed in licensing fees. 

 

Nitty Gritty of Writing for the Search Engines 
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Anybody who subscribes to Jill Whalen's excellent SEO Newsletter High Rankings Advisor will know that she launched her new e-book The Nitty-Gritty of Writing for the Search Engines last week. What you may not know, if you haven't already bought it, is how fantastic it is!
 
Nitty-Gritty spells it all out for you: where to place your keyword phrases, how to use real text, how to make your copy make sense to your readers and things to avoid, all with crystal clear, practical, step-by-step examples. I highly recommend Nitty-Gritty to any webmaster seeking advice on how to edit their site copy or improve the search engine compatibility of their web site. 


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web: http://www.high-search-engine-ranking.com
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