By Jim Hedger (c) 2006
I am going to step way out on a limb. I suspect, and am willing to propose; this short period is a major transition point in the history of search. I’m marking it in my archive, if only because a niece or nephew of mine might study economics and ask about it one day. A number of events over the past three weeks have set in motion a chain of events that will unfold over the remaining months of 2006, setting the stage for a bizarre and highly fluid 2007.
On or about November 1, 2006, three interesting press releases found their ways into my inbox. While meditating over them with Hypertext The Cat (she who watches like vulture) and a cup of coffee, it occurred to me that Nov 1 was a watershed day in the history of online advertising.
The first news item is extremely important for organic search and for information distribution in general. Ask and Lycos announced an alliance with Ask providing the organic, image and sponsored search results for Lycos users and Lycos pushing Ask search products. While the vast majority of search analysts will likely see this as the least important development in the first week of November, the combination of up-and-coming Ask with the old but still popular property Lycos signals a small shift in the search engine landscape.
“We selected Ask.com over other providers because of its great search technology and tools like Zoom related search, which cannot be found on other engines,” said Brian Kalinowski, CEO of Lycos, in a press statement. “By partnering with Ask.com, we aim to deliver a world-class search experience to our millÃons of Lycos users.”
Ask appears to finally be making its move and actively seeking partnerships with other smaller search firms. While it is good to see forward momentum for any search firm whose name does not begin with the letter G, it is also important that some sense of competition be re-injected into the organic search market.
In the same press statement, Ask CEO, Jim Lanzone said, “With stiff competition in the marketplace for syndication deals, we are pleased that Lycos recognized the merits of our search technology and advertising products. This new relationship will enable Ask.com to broaden its search offering to new users while also increasing the reach of Ask Sponsored Listings inventory.”
Ask.com is, in and of itself, an interesting search engine, and one whose story could have turned out very differently. It is nevÃ«r too late to start over and, 2006 has been a time of renewal at Ask. Owned and operated by the InterActive Corporation, Ask has new energy, an almost impossible goal its staff fully believes in, and, ultimately, a new lease on life. No longer defined by their popular but ineffective butler mascot, Ask has spent the past ten months reinventing itself by incorporating the strongest offerings from IAC such as Citysearch, Ticketmaster and Expedia into the search products it offers its users.
Things looked very different at this time last year for the small Oakland CA based company. Then again, things looked very different in the search engine marketplace at this time last year. Today, Ask appears to be looking for partners to bolster themselves as the smallest of the largest search entities. With the enormous lead Google has over the rest of the pack, these types of partnerships are both necessary and inevitable.
The second item from November 1st’s news is a story from British newspaper the Times Online saying Google’s rake of UK advertising monÃ«y has surpassed Britain’s second largest advertising funded TV station. With annual revenues projected to surpass 900 million -poundUK this year, Google has blasted past Channel 4’s anticipated revenues of 800 million – poundUK.
Again, this might not seem like much of a surprise to long-term Internet watchers but it is a massive story for advertisers and media buyers who continue to spend the majority of their clients’ monies on traditional outlets like television, radio and print. The ad-purchase pendulum was already rapidly swinging away from the traditional media and reports like this only add momentum to that movement.
Channel 4 CEO Andy Duncan was quoted in the article saying, “People need to wake up and realise that this is not just a cyclical issue – there is deep structural change, rather like global warming.”
Comparing Google’s success in drawing revenues that would otherwise fund other advertising venues to Global Warming might seem a bit extreme at first glance however, Mr. Duncan is quite correct in his observation that the global advertising environment has altered so significantly that traditional assumptions no longer necessarily apply to the emerging realities. The monÃ«y is not flowing the way it used to, threatening what was once solid ground with accelerating submersion.
The biggest thing most of us will have to worry about in regards to Global Warming is if, not where, we will find lunch. Similarly, traditional media outlets are struggling to find ways to survive now that the rivers of wealth have been diverted to fund the efficiency of the electronic marketplace.
A third news item, a report published in the New York Times that has certainly been noted by media buyers shows how badly newspaper subscriptions have declined over last year while, at the same time, viewership of websites published by those same newspapers has increased by about 24%.
According to the article, the LATimes has lost 8% of its daily circulation. The Boston Globe is down by 10% for its Sunday edition. In 1984, circulation of major daily newspapers in the United States peaked at 63.3 million. Today, that number has decreased by about 1/3 to 43.7 million. Clearly, not as many people are taking delivery or buying newspapers anymore. That doesn’t mean they are not reading them. According to the Newspaper Association of America, over 57 million people visited the websites of American newspapers in the third quarter of 2006.
The mainstream media marketplace is changing rapidly and ad buyers are having that reality hammered home to them time and time again. At the same time, the search engine marketplace is changing quickly as well.
Over the past several weeks, the search engine marketplace has shifted significantly with the third quarter reports from the two largest paid search entities, Google and Yahoo. What these reports revealed is that there is no longer any real competition in the PPC marketplace with Google literally sucking the profÃt away from Yahoo.
While the ceiling is not caving in at Yahoo, a weak fourth quarter report will not bode well for a revival of competition in paid search. Yahoo’s weakness however, provides an open lane-way for other formats and methods of paid-search advertising, one that Ask is only too happy to start to explore. Ask is not the only company exploring the paid-search marketplace. In the last couple of months, Microsoft’s adCenter has started to look like a serious player with inventory and interface improvements.
Now, I realize everything I have said above seems, on its own, either inconsequential or perfectly obvious. The inference I draw from these three stories, all of which appeared on November 1st is that these stories are both indicative of and propelled by, the seismic shifts happening in the search marketplace right now.
Weakness at Yahoo makes a place for Microsoft, Ask and its new alliances, and a host of other alternatives at the paid-search advertising table. On the table is a rapidly growing pile of monÃ«y, most of which is likely going to go to Google. What’s left is a fortune worth fighting over. 2007 is going to be bizarre and highly fluid.
About The Author
Search marketing expert Jim Hedger is one of the most prolific writers in the search sector with articles appearing in numerous search related websites and newsletters, including SiteProNews, Search Engine Journal, ISEDB.com, and Search Engine Guide.