Dot-com responds to advertising sales decline by focusing on enterprises.
Seeking a tighter focus on enterprise customers while trimming expenses and unprofitable business, Northern Light Technology LLC this week will eliminate its free Web search service.
The Cambridge, Mass., company follows in the steps of other dot-coms that have stopped providing something for nothing on the Web in the face of declining advertising sales.
"Everybody wants to head there, but they have to wait until their revenues are weighted toward the enterprise as Northern Lights were," said Guy Creese, an analyst at Aberdeen Group, in Boston. "Its my understanding that about four-fifths of their revenue comes from their enterprise clients. Thats really the bulk of their business, but running the Web site takes up more resources, so it makes sense."
Northern Light maintains an online business library of more than 70 million pages from more than 7,100 sources. It also has an index of more than 350 million Web pages, officials said. As of Jan. 16, searches of that information will be available to only paying customers, mostly enterprises.
"Over the past year, Northern Light has seen booming demand for search, classification, taxonomy and content solutions from our enterprise customers and marketing partners," said Northern Light CEO David Seuss in a statement. "Meanwhile, the business model for free, advertising-supported, public Web search has not been developing for us. We made a strategic decision to discontinue free public access to our Web search in order to focus resources and investment on those parts of our business that are growing rapidly."
Seuss said Northern Lights sales bookings for its enterprise offerings in the quarter ending last month were double those of the previous quarter.
"Theyve always had a professional research focus," Creese said. "A couple of years ago, that wasnt very trendy, but it serves them well now. They have people who are willing to pay for it."
Northern Light is the latest Web search service to end the free lunch. News Edge Corp. ended its free search services and focused exclusively on the enterprise after it was bought by Thomson Corp. last September.
The Northern Light Web site will continue to serve as a news portal and content archive while the company concentrates on enterprise search and content integration, officials said.