Yahoo Stakes Out Paid Search Path

By Matthew Hicks  |  Posted 2004-03-03

Yahoo Stakes Out Paid Search Path

NEW YORK—Yahoo Inc., with it launch this week of a revamped program for Web sites to pay for inclusion in its search engine, is attempting to reap the rewards of its flurry of search acquisitions last year as it takes a different approach from rival Google Inc.

Search engine marketers and analysts, gathered here for Jupitermedias Search Engine Strategies 2004 conference, viewed Yahoos Tuesday announcement of its Content Acquisition Program as its logical next stop for bringing together the search properties from its Inktomi Corp. and Overture Services Inc. purchases. But they also raised fairness and pricing concerns about Yahoos paid inclusion approach.

Yahoos Content Acquisition Program includes paid inclusion as well as a method for tapping into documents from what is called the "invisible Web," content rarely reached through search-engine Web crawlers or sitting in proprietary databases.

Yahoo, of Sunnyvale, Calif., is allowing select non-profits, government agencies and academic institutions to submit Web content for free. They include National Public Radio, a collection of Supreme Court audio recording from Northwestern University and the Library of Congress.

The companys Overture division is running the commercial portion of the program, called Site Match. It merges what had been three separate paid inclusion programs from Inktomi and Overtures AltaVista and search properties. The consolidation both simplifies the process for Web sites that pay to be crawled or submit XML feeds and extends their reach to all of Yahoo Search, said Chris Bolte, Overtures vice president of strategic alliances.

Yahoo last month dropped Google for its Yahoo Search site and introduced its own search index and crawler that feeds search across all its services. The much-anticipated move has heightened competition in the search-engine market.

Bolte stressed that the paid inclusion program is a complement to Yahoos Slurp Web crawler, which indexes billions of Web pages. Free search listings make up about 99 percent of the index with only 1 percent from paid inclusion.

By embracing paid inclusion for its new search technology, Yahoo is opening itself to questions about fairness in its Web index and staking a sharp contrast from search leader Google, said Nate Elliott, an analyst at Jupiter Research, in New York. Google, of Mountain View, Calif., highlights the fact that it accepts no payments to guarantee inclusion in its Web index.

Even if search engines dont favor Web pages that pay to be included, as Yahoo has promised, they raise the appearance of a conflict of interest, Elliott said. "It always just looks a little bit fishy," he said. "Search engines index the Web on their own, and its almost like paying them to do their own job."

Next page: Google: No plans for paid inclusion.

Page Two

Google officials on Tuesday reaffirmed that the company has no plans to add paid inclusion. "To us, paid inclusion is fuzzy on the guidelines of separating church and state," said Tim Armstrong, Google vice president of advertising sales.

Yahoos search algorithm ranks search results without regard to whether Web pages come from paid or free listings, Bolte said. Providing paid inclusion provides a way to work more openly and cooperatively with Web sites and helps improve relevancy, he said. Submitted Web pages also must go through a human and technological review for quality.

"Our overall goal is to crawl 100 percent of the Internet for free," Bolte said. "This [paid inclusion] is a key added service."

In pricing Site Match, Yahoos Overture division has created two tiers—one for smaller sites submitting fewer than 1,000 URLs and another for larger sites submitting 1,000 or more URLs.

The smaller sites pay a yearly flat fee, starting at $49 for the first URL submission and decreasing to $29 each for the next two to 10 URLs and $10 each for the next 11 to 999. They also pay per click, either 15 cents a click or 30 cents a click depending on the search category. Bigger sites would only pay per click at a rate as high as $1 a click, varying by categories.

For smaller sites, the pricing model may "have gone too far," said Andy Beal, vice president of search marketing for WebSourced Inc., of Morrisville, N.C. Charging per-click fees for smaller sites is a departure from the previous programs that only charged the annual fee, he said.

The potential for higher cost leaves those smaller Web sites in a bind—face difficulty paying the extra cost or risk more infrequent crawler updates from the free crawl, Beal said. With paid inclusion, Yahoo is guaranteeing updates every 48 hours.

"Search engines have become so powerful that theyre almost a monopoly," Beal said. "What choice do the business owners have but to pay?"

But Bolte said that by adding a per-click charge, Overture is preventing spam-oriented paid inclusion listings by encouraging accurate Web page submissions.

"If you have to pay for the clicks then youll make sure the site has the most relevant content," Bolte said.

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