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November 24, 2004

Performance-based online marketing

According to The Kelsey Group, small and medium-sized businesses (SME's) that use performance-based online marketing fall into three distinctive groups, based on the age or maturity of their business, their use of the technology and their preference for measuring actual results.

A report released this week lists three segments of the small and medium-sized enterprise (SME) marketplace most inclined to adopt performance-based Internet marketing -- newer businesses, "tech-forward" organizations, and direct mail marketers.

"People speak of a 'small-business market,' yet in essence there is no such thing," said Neal Polachek, senior VP of research and consulting for The Kelsey Group. "While there are common SME characteristics, there is also remarkable diversity.

What this report reveals is that there are certain categories of small businesses that are much more likely to adopt online marketing than others."

The report found that businesses that have been in operation less than 10 years, especially service-based ones, embrace performance-based marketing online.

These businesses typically generate fewer revenues, but allocate more dollars to marketing compared with more established businesses and even young product-based businesses, Polachek said. For this reason, they are generally interested in measurable advertising vehicles to ensure an efficient return on investment, he said.

"Tech-forward" SMEs, with high-speed Internet access and a Web site, tend to utilize technology to its fullest extent, the report found.

These businesses show no signs of relying on traditional advertising and marketing approaches, according to the report.

The Kelsey Group analyzed the data and found implications that the use of direct mail by a small-business marketer may be a signal that a business owner is more oriented toward measuring media performance.

Therefore, this group tends to be more inclined to devote resources to media that can show a demonstrable and dependable positive rate of return, such as performance-based online marketing, Polachek said.

Source: ClickZ

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November 15, 2004

Internet advertising to reach $9.4 billion in 2004

Dow Jones will buy MarketWatch, owner of the financial news site CBS MarketWatch, for $519 million.

That deal is being billed as a way for the publisher of The Wall Street Journal to expand its online audience and capitalize on a revived Internet ad market.

Executives at Dow Jones are not the only ones taking notice.

The Internet is now the nation's fastest-growing advertising medium, with sales expected to reach a record $9.4 billion this year -- up 16 percent from the bubble days. What's more, Internet research firm eMarketer expects companies will nearly double their annual Web ad spending by 2008.

Another sign of revival Monday: the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers said Internet ad spending jumped 35 percent to a record $2.4 billion in the third quarter from a year earlier, and were up 2 percent from the second quarter.

The ad revival is driving revenue spikes at some top news sites, including CNET, The New York Times Digital, and Knight Ridder Digital.

But strong ad sales overall are masking a challenge that many Web sites operators face: while demand is up, so too is the total supply of ad space available. That means ad rates aren't rising nearly as fast.

"There's more inventory in general," said Denise Garcia, a principal analyst with GartnerG2. "There is still more supply than there is demand for online advertising."

It's the paradox of the Internet's second act. While everyone reaped the benefits of skyrocketing rates during the late 1990s boom, this time around a handful of ad-driven sites are going gangbusters, with no available ad space.

Everybody else, however, is saddled with too much inventory. Companies like ValueClick (up $0.45 to $11.94, Research) and privately-held Blue Lithium, which specialize in aggregating sites' excess supply and selling it off cheap in exchange for a commission, are going strong.

"At a macro level I guess you could say that spending is going up," said Gary Stein, a senior analyst with Jupiter Research. But he estimates that about half of ad dollars spent online are going to four sites: Google, Yahoo!, MSN (owned by Microsoft (up $0.42 to $27.31, Research)) and AOL (which, along with CNN/Money, is a Time Warner (down $0.11 to $17.29, Research) property). From there, he said, "it starts to fragment pretty quickly."

Yahoo! (down $0.36 to $37.44, Research) and Google (up $3.18 to $185.18, Research) are on a tear because they dominate paid search advertising, which is by far the hottest form of online advertising. A IAB-PricewaterhouseCoopers survey shows that search advertising comprises about 40 percent of the total online ad market, up from nearly 30 percent a year ago.

The beauty of paid search is that the ads that appear are directly related to the keywords a consumer uses to conduct a Web search. A sponsor pays only if and when a user clicks onto the company ad that appears along with Web search results.

So, for instance, a mortgage lender will bid to have its ad appear next to a search of "mortgage rates." The assumption is that someone who's looking for a new house might be interested in finding out about loans.

Last month a bank paid on average $4.31, or 36 percent more than in September, for each mortgage-related search that ended in a click, according to Fathom Online, a San Francisco research firm that began tracking paid search rates in August. Fathom says prices for keywords jumped 14 percent last month, from September.

Web site operators that don't sell paid search advertising are discovering too that they can charge more if they can deliver the customer the marketer wants to reach.

Jason Vogelpohl is the vice president of advertising at, a subscription-based information site for active day traders that draws advertising from financial services companies. If an advertiser wants to sell itself to, say, Canadian investors, Vogelpohl said he can command top dollar if he can produce them.

"The more you can tell advertisers about your demographic, the more money they will spend," said Vogelpohl.

The problem for Web sites that don't have the benefit of detailed subscriber lists is that they still don't know the faces behind the clicks.

To change that, some online publishers are embracing technology that tries to profile users based on all the pages they visit on a single site.

The idea is to help Web sites sell ads at higher rates on less-popular pages by, for instance, showing auto makers that site users head not only to the automotive section but also to information on the weather or general news.

But behavioral targeting technology is still in its infancy, said Garcia of GartnerG2. "It will be awhile before that really starts to take off," she said.


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November 08, 2004

Pheedo launches ad management tool

Blog and RSS feed ad firm Pheedo launches an ad management tool that will let publishers insert paid ads into their RSS or Atom content feeds, and then track the resulting activity.

Kanoodle, which has been a pioneer in RSS ads, will provide syndicated ads, but publishers may also sell ads directly. Participating publishers at launch include Topix, Lockergnome and

The Web-based ad server, called SimpleAd Feed Management and Server, monitors feed activity to determine how often an ad should be inserted, according to Pheedo. It also serves ads tailored to the characteristics of each news reader, the company said.

Reporting includes both data on ad views and click-throughs. It also gives publishers information about their audience size, the popularity of their content and what aggregators audience members are using.

As blogs and XML-based feeds have begun to catch on with early adopters, start-up companies like Pheedo have begun working to help publishers monetize their investment in content feeds.

Another firm,, is also developing an ad model for feeds, while FeedBurner provides audience metrics similar to those offered through Pheedo's new product.

Source: Click Z

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November 04, 2004

40% of people begin their holiday shopping before Thanksgiving

A national survey done in October warns that the buying frenzy is set to start sooner rather than later. Although the new "Shopping in America" report, just released by the Macerich Company, concentrates on offline shopping trends this holiday season, online marketers and retailers should pay special attention — because their sales season comes even faster, and ends even quicker.

Over 40% of the 6,200 respondents said they would begin their "serious" holiday shopping before Thanksgiving, and almost 30% will shop on "Black Friday," the day after Thanksgiving.

The survey also found that shoppers will spend an average of $898.38 on holiday-related purchases, which includes $608.15 on holiday gifts — up 4% from the $584 average consumers spent on holiday gifts in 2003. This year, consumers say they will spend the remaining $290.23 on holiday decorations, parties and other related purchases.

"Despite some industry predictions of a modest season, the Shopping in America report shows that over 80% of consumers plan to spend the same or more than last year on holiday gift purchases," says Garry Butcher, Macerich VP. In fact, only about 19% of shoppers surveyed plan to spend less than they did in 2003.

Nationally, shoppers will spend an estimated $58.48 for each recipient on their 10.4-person gift list. The survey also revealed that shoppers in the Southern region of the US plan to spend the most on total holiday gift purchases, at $630.20 while those in the Midwest will spend the least, $582.70.

In a finding that might be of special interest to online retailers, since online household income demographics still skew slightly higher than the national average, the survey indicates that planned holiday gift expenditures rise with annual household income. Shoppers in the highest income level plan to spend the most at nearly $900.00.

In its soon-to-be-released Holiday Shopping report, eMarketer projects online spending in the holiday months — November and December — will total $16.7 billion, up from $12.9 billion last year, representing a rise of 29.3% for the year.

According to Senior Analyst and author of the report, Jeffrey Grau, "As consumers gain online shopping experience, their expectations rise. With holiday shopping beginning very early in some cases, e-retailers will have to be extra nimble and ready for high traffic volumes to occur soon."

Bricks-and-mortar stores are breaking out the holiday decorations now. Online retailers should also be preparing because it looks like the holidays are coming early this year.

Source: eMarketer

Posted by nakul at 12:41 PM | Comments (0) | TrackBack

A9 search engine adds adult products to its database

Amazon's A9 search engine offers visitors a large collection of quality adult products available on Amazon's website.

Who says a shopping search entity can’t turn up the heat and still not bow down entirely to the porn industry.

As some of the major online shopping and search sites have been laying down the law on riskee sex driven sites, signs on one of the largest companies in adult products.

Adam & Eve, a leader in adult entertainment, and Amazon Services, Inc. announced that they have teamed up to offer users the ability to purchase over 1,200 of Adam & Eve’s top quality adult products., which recently launched the a9 search engine in conjunction with Google, offers customers the biggest collection of anything you might want to buy online.

Now they can add adult toys to that list with the recent alliance with Adam & Eve adult products. Adam & Eve products can be found by doing a search on the website. For instance if you search for “adult toys,” you will see a large display of Adam & Eve-related products (notice how we did not include a link).

According to a press release from Adam & Eve “This new addition to brings an exciting blend of enjoyment and edgy shopping that customers of have not had access to before.

The 1,200 Adam & Eve adult products sold on are displayed with Amazon customers in mind so that only products that appeal to that audience are accessible.”

Sean Trotter, Chief Technology Officer of Adam & Eve, said: “We are excited to offer Adam & Eve products on

We are able to reach a new audience for our products with this new relationship with Amazon. For years Adam & Eve has been the best-known company in the adult toys business and now we are reaching new markets with alliances such as”

Source: Search Engine Journal

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November 03, 2004

Retailers' search engines boost online sales

In DoubleClick's latest quarterly eCommerce trend study, it reveals that 2.1 percent of consumers who visited a retail website's search engine made an online purchase.

Those numbers are up from 1.5 percent in the third quarter of 2003.

Online marketers and eTailers who sell to consumers would be well-advised to purchase premium placement in retailers' on-site search engines, based on the findings by DoubleClick's report.

In total, 9.3 percent of e-commerce sales came from the search function on shopping sites, compared to 6.6 percent a year earlier. Of those who bought products through on-site search in the third quarter, the average order size per online buyer grew to $126 from $100 in the same period last year.

Search engines are particularly important because most online consumers still don't know exactly what they want when surfing for products online, said Patti Freeman Evans, a JupiterResearch e-commerce analyst. "On-site search presents a tremendous opportunity to influence purchasing decisions," she said.

Freeman added that retailers can also use their sites to highlight items that are high margin, overstocked, or close to out of stock. She said that many large marketers have a site similar to's "We Recommend" section, which gives marketers the opportunity for premium placements on their on-site search pages.

The report says that marketers should also be aware that consumers shop in different ways. "Marketers need to understand how consumers use [retailers'] on-site search engines," said Richard Fleck, DoubleClick strategic services manager. There are searchers who are actively searching for specific products, and others who are simply browsing--waiting for something to catch their attention.

Jupiter's Freeman added that some active searchers don't do a lot of research ahead of time, while others plan their shopping strategies very carefully, visiting product pages an average of 2.5 times before making a decision.

Fleck said that marketers should react to the different consumers in a similar manner: through a call to action that leads them down a certain purchasing path.

Freeman said that online retail marketing should always be proactive, but there should be a specific call to action for different demonstrated behaviors. To achieve best results, Freeman said retailers need to deploy sophisticated tracking tools to aid marketers to that end. Behavioral targeting, for example, is something several retailers are looking into, she said.

Other e-commerce report data said that shoppers are spending 10 percent less time on commerce sites during their shopping sessions. Third-quarter 2004 data said users spent 4.4 minutes at each site compared to 4.9 minutes a year earlier, and far less time on each page--29 seconds in 2004 versus 43 in 2003. Users are also viewing more pages during each site visit--10.3 pages versus 7.7 year-over-year.

Those results jibe with a report of the Online Publishers Association released earlier this week, showing that consumers are spending a smaller proportion of their online time at commerce sites (See MDN, "OPA: Users Spending More Time At Entertainment And News Sites" Nov. 2).

It is unclear how much of that change can be attributed to increased broadband adoption; Nielsen//NetRatings reported in July that broadband usage surpassed dial-up among Internet users. DoubleClick said the report did not differentiate between dial-up and broadband users.

The trend report shows that shopping cart abandonment continues to grow. Of those who initially add something to their carts, 57 percent abandon the carts without making a purchase--up from 53 percent a year ago. However, once shoppers start the checkout process, more are going through with the purchase. Checkout conversion increased to 63 percent in the third quarter--up from 59 percent in same period a year ago.

The data for the report comes from DoubleClick's SiteAdvance, a hosted Web site measurement and analysis product for online marketers.

The results are based on hundreds of millions of unique visitors, tens of millions of online shopping carts, and over $1 billion in total e-commerce sales. DoubleClick began collecting and compiling this data in second quarter 2003.

Source: Mediapost

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November 02, 2004

Online sales to reach $21.6 billion this Christmas

According to projections released by JupiterResearch, online retail sales will reach $21.6 billion this holiday season. Such numbers would mark a rise of 19 percent over 2003, the market research firm said.

Nearly 86 million Americans are likely to make purchases online this season, compared with 73 million last year, it said.

JupiterResearch is also predicting a 2 percent jump in spending per buyer compared with last year.

In addition, U.S. consumers will expand their range of purchases beyond the traditional top-selling categories of toys, books and apparel.

"Over half of online holiday shoppers say they will use the Web to get gift ideas or to seek better prices," Patti Freeman Evans, a JupiterResearch retail analyst, said in a statement.

"To capture these customers this holiday season, retailers are wise to use e-mails to alert customers who have left items in their shopping carts or wish lists when the price changes or inventories get low on those items."

Jupiter's projections are at variance with the data released by Forrester Research recently.

Forrester predicts holiday sales to be around $13.6 billion. However, Forrester defines the holiday season as between Thanksgiving and Christmas, while Jupiter's holiday projections cover the whole of November and December.

But like Forrester, Jupiter's predictions indicate slowing growth in online holiday sales. Jupiter recorded a 31 percent jump in holiday sales from 2002 to 2003.

"Despite the strong online sales forecast, many offline retailers are expecting a 'tight back-end,' or a challenging fourth quarter, due to the back-to-school sales bust," the Jupiter report stated.

"The positive September retail sales results notwithstanding, continuing economic, employment and global political uncertainties have influenced retailers to plan their inventories carefully this year."

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October 18, 2004

Tiscali offers search and targeted advertising

Tiscali offers search and targeted advertising on Tiscali’s European portals, thanks to a partnership with Google.

Through the agreement, Google will provide Tiscali users with web search as well as targeted advertising from Google AdWords advertisers.

Tiscali and Google will share revenues generated from the search engine’s sponsored links. Google’s search results will be available on Tiscali portals in The Netherlands, Denmark and the Czech Republic and will be extended to the other main countries where Tiscali operates by mid-2005.

Mario Mariani, Tiscali’s SVP for Business Development commented, "We have always been committed to offering our customers the best possible Internet experience and to experimenting with new Web frontiers.

The agreement with Google not only guarantees that we can offer our users the best search technology on the market, but will allow us to be the first to offer new functions which will become available as the technology evolves."

Omid Kordestani Senior Vice President of Worldwide Sales and Operations at Google said, "The agreement with Tiscali, one of Europe’s leading Internet operators demonstrates the continued value we provide to ISPs through innovative products that drive both user loyalty and site profitability.

The agreement also enables Google AdWords advertisers to reach Tiscali’s 17 million European unique visitors with targeted advertising, increasing their reach across Europe."

Source: DM News

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October 07, 2004

Kanoodle launches BrightAds

Kanoodle launches BrightAds™, a self-service tool for small to medium-sized content publishers that will enable them to run Kanoodle's content-targeted sponsored links on their sites.

With the launch of BrightAds, it is now easy for independent Web publishers to add highly relevant sponsored links advertisements to their sites and generate immediate revenue.

Kanoodle's listings have until now only been available to the Web's largest content publishers, currently running on a number of the Internet's most well-known and respected sites, including CBS MarketWatch,, and others.

A unique benefit of BrightAds is that it maps ads by "topics" rather than keywords, which prevents core keyword mapping challenges and provides publishers with ads that are more relevant to their site's content.

This protects the editorial integrity of publishers' sites, ensuring that the ads appearing on each page are directly related to the context of the reader and are not dependent on arbitrary keywords.

Furthermore, BrightAds is the first self-service network to combine the scalability of dynamic targeting with the integrity of editorial review. Relevance generates more clicks and more conversions to sale for advertisers, ultimately resulting in higher revenue for the publisher.

"BrightAds offers small- to medium-sized publishers the ability to monetize all of the pages on their sites using the same leading suite of content-targeting products enjoyed by the Web's leading publishers," said Doug Perlson, SVP and General Manager of Kanoodle.

"BrightAds was created directly from the feedback we received as part of our ongoing dialogue with publishers about what they wanted from an automated network - it was specifically built to be the most publisher-friendly product in the market."

Key features of the BrightAds network include:

-- The ability for publishers to monetize their entire site, even on dynamic content pages;

-- An easy to navigate sign-up, review and code generation process;

-- The confidence that Kanoodle provides only paid ads, so publishers running ads are always generating revenue;

-- A variety of adaptable ad units, giving publishers the flexibility to seamlessly integrate listings into their sites;

-- A clearly defined revenue share;

-- An easy payment program, currently including PayPal.

Perlson continued, "At launch, publishers in the BrightAds network will have access to Kanoodle's ContextTarget listings. We intend to roll out our BehaviorTarget listings, our RSS targeting solutions and our subsequent targeting products, in the very near future."

Publishers can join BrightAds by visiting, filling out an application and then selecting the topics that are most relevant to the content appearing on their site.

They can then expect to begin generating revenue immediately upon their application approval.

Source: Kanoodle

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October 04, 2004

Paid search exploding in the legal field

Paid search is really driving new business in certain areas, such as the legal profession.

A day after Merck recalled its arthritis and painkiller Vioxx drug last week, many class-action lawyers started bidding for the term "Vioxx" on paid-search engines.

A search for that term on Google (GOOG) will bring up three law firms advertising their services to represent anyone who's been injured by taking Vioxx. The top paying law firm, Brown & Crouppe, said the advertisement just went up.

In a subtle sign that Google's ads are more relevant than Yahoo's in this particular case, Yahoo's (YHOO) Overture ad division kept an online drugstore selling Vioxx in the No. 1 position. But in the No. 2 spot was Fort Myers, Fla.-based law firm, Paige & Tropp.

A Google search for "vioxx victim" also resulted in sponsored ads for law firms while the same search on Yahoo did not result in sponsored links.

Paid search isn't new, but the immediacy of the ads going up underscores the real-time and personalized nature of this channel.

The advertisements went up in response to Merck's (MRK) announcement on Wednesday that the drug company was withdrawing the drug, which generated $2.5 billion in sales last year, from the global market.

Vioxx currently has 2 million users worldwide. An estimated 84 million people have taken the drug since its approval by the FDA in 1999.

That's a lot of people. And, increasingly, paid search has proved to be one of the best ways to target and find specific buyers, or in this case, possible victims.

At the moment, the price the law firms are paying for the term "vioxx" is roughly $2 per click.

If all 84 million people went to a search engine and clicked onto the ads, they'd ring up $168 million worth of clicks for the ad agencies. The best online ad agency will put various keywords together in order to target the most people.

It's important for search companies to have the ability to deliver ads for any combination of search terms. New search terms have helped drive the paid-search industry in the last couple of years.

Some search terms are ridiculously expensive. For instance, the price to be ranked at the top of the sponsored links for the term "mesothelioma" is $100 per click. Mesothelioma is a rare form of cancer that legal cases seek to link to asbestos exposure.

Paid search has been the fastest-growing segment in the online advertising business. Paid search shot up 182 percent in 2002, and rose to $2.5 billion by 2003, or about a third of the online ad pie, according to Thomas Weisel Partners. TWP also estimates that paid search will be half the total ad pie by 2008, implying an annual growth rate of 21 percent.

Currently, paid search accounts for 35 percent of U.S. Internet advertising. And, Internet advertising accounted for 3 percent of the total U.S. advertising pie in 2003, according to Morgan Stanley.


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Network news anchors criticize bloggers

Network news anchors are criticizing bloggers more and more. At a panel discussion sponsored by The New Yorker magazine on Saturday, NBC news anchor Tom Brokaw and ABC anchor Peter Jennings lashed out at Internet bloggers in defense of CBS anchor Dan Rather, according to reports from the Associated Press and Reuters.

Brokaw compared the bloggers' attacks on Rather's "60 Minutes II" report about President Bush's National Guard service a "political jihad".

"What I think is highly inappropriate is what's going on across the Internet, a kind of political jihad," Brokaw said during a panel on which he appeared with Rather and Jennings. "It is certainly an attempt to demonize CBS News, and it goes well beyond any factual information a lot of them has, the kind of demagoguery that is unleashed out there."

Brokaw and Jennings both acknowledged that a mistake had been made in a "60 Minutes II" report questioning Bush's National Guard service, but the network news anchors also offered their support to their fellow news colleague Rather. Neither held back their contempt for Internet bloggers, who have kept the scandal alive with thousands of posts criticizing Rather and CBS.

"I don't think you ever judge a man by only one event in his career," Jennings said. "I think the attack on CBS is an attack on mainstream media, an attack on the so-called 'liberal media.' To me, when you make a mistake, you apologize. You go back and review your standards."

Rather declined to comment on the situation, saying he had been asked not to talk about it further by news division executives while an investigation was under way.

Michael Paranzino, founder of Web site, wasted little time responding to Brokaw's statements.

"Tom Brokaw reads the news, but does he understand it?" Paranzino said in a statement. "Jihad is not Americans demanding reforms from an arrogant and biased media. Jihad is Islamists mowing down children for sport, blowing up families at Tel Aviv cafes, and in case he forgot, terrorists sending jet airliners into the World Trade Center and Pentagon."

He added: "We will not be cowed into silence by Mr. Brokaw's intemperate remarks."

"60 Minutes" aired the "Guard story" on Sept. 8. Within hours, bloggers flooded the Internet with information discrediting the story because it relied on documents that appeared to be fake.

At first, CBS and Rather defended the story. But two weeks after the scandal erupted, CBS announced it had appointed a special investigator to look into how the story was reported, and Rather issued an apology on air.

Blogs, short for Web logs, have grown in popularity over the last couple of years. Bloggers, who don't necessarily need to be professional journalists, often break news before most news agencies.

But even when they aren't breaking stories, some offer opinions and analysis of news. Really Simple Syndication, or RSS, technology, which lets online publishers automatically send Web content to subscribers, has helped fuel the growth of blogging by giving readers a powerful tool to compile news on the fly from several sources at once.

Blogging has become so popular and such an integral part of how people consume news that both the Republican and Democratic conventions this summer reserved areas in their press boxes for political bloggers.

Campaigns for Bush and presidential challenger John Kerry have posted their own blogs as a way to provide news updates and to hammer out the issues surrounding their platforms.

While some newspapers and TV networks also have launched their own Web logs, many old-guard journalists have criticized the "non-journalist" blogs.

The debate has folded into a broader discussion of how the Internet, which has dramatically changed the way people consume news over the past 10 years, should be used as a journalistic tool.

The venerable Walter Cronkite has been on record several times in the past expressing his distaste for all things Internet.

But at a Society of Professional Journalists gathering in New York last month he went as far as to call Internet bloggers "scandal mongers," according to reports from the USC Annenberg Online Journalism Review.

"I cannot understand how the Internet should have gotten so entirely oblivious to the whole theory of libel and slander," Cronkite said.

"How is it possible for these people to get on the air with any allegation they want to make, any statement they want to make as if it were true, as if they were journalists which they are clearly not? They are scandal mongers."

Source: C-Net News

Posted by nakul at 10:19 PM | Comments (0) | TrackBack

October 03, 2004

Bill Gross launches Insider Pages

The driving force behind search pioneer Overture, Bill Gross, is once again battling in Web search.

The founder and CEO of famed venture capitalist Idealab plans to unveil a new search venture Tuesday at the first annual Web 2.0 Conference being held in San Francisco.

Meanwhile, his venture fund has bankrolled a new localized service that ties online yellow pages with social networking.

Called Insider Pages, the Web site lets people sign up to connect with friends and mine their recommendations for local shops and services. The free product, still in experimental form for Los Angeles residents only, puts a new spin on social-networking services like Friendster by infusing it with the local insider feel of Craigslist.

Wholly owned and funded by Idealab, Insider Pages has yet to make a public debut. But company CEO and founder Stuart MacFarlane said he plans to introduce the service more fully in additional cities in the first half of 2005.

Idealab has been a weighty force in Web search since Gross founded Overture, formerly, in 1998. Against popular dissent, Overture sought to commercialize Internet search by allowing marketers to bid for a higher position in query results.

That business model has since been adopted by Web heavyweight Google and has become the biggest driver in online advertising's turnaround. Yahoo, which has profited handsomely from paid search, bought Overture last year for $1.63 billion.

Gross is now expected to unveil a new Internet search venture, apart from Insider Pages, which some executives speculate will bring a more personal touch to finding information online.

"Anything that Gross does in search can't be underestimated," said John Battelle, co-founder of Wired magazine and program chair of the Web 2.0 conference.

Insider Pages is entering a market rife with promise, at least as investors and big-league Internet companies see it. In the last year, Yahoo, Google and InterActiveCorp's have invested heavily in improving local-search services and mapping in order to lure new visitors and to begin to attract regional advertisers online.

The prize could be big; small and midsize businesses spend about $22 billion on local advertising annually, according to The Kelsey Group.

Insider Pages could also bring a more focused business model to online social networking, in which people sign up to meet new friends or date.

Although services such as Friendster and Google's Orkut have been popular, investors and analysts wonder if they can keep people's interest and prove to be a viable businesses.

Insider Pages plans to make social networking valuable by helping consumers find trusted advice on services. That, in turn, will be valuable to advertisers, MacFarlane says.

"The most important driver for people when selecting local business providers is personal recommendations," said MacFarlane, who has worked at Idealab for two and half years and spun off Insider Pages into a new company. "It's the way the real world works."

He added: "We're aggressively going after local businesses to advertise online."

Insider Pages will sell advertising space at the top of search pages, charging marketers only when people use their service, or with a "pay per lead" model.

Still, Insider Pages faces the uphill battle of drawing new subscribers in an environment laden with too many pitches to join other social networks.

It also may have difficulty in maintaining the listings and recommendations of friends, given that people often move and listings could be biased. Finally, companies like Google and Yahoo are working hard to bring regional advertisers online, and Insider Pages is just a small voice in the market.

The company also faces competition outside of Yahoo and Google. Craigslist could be developing new business models, given that eBay just took a 25 percent stake in the company.

And Seattle-based upstart Judy's Book plans to release a similar service in the coming months. The company recently received $2.5 million in funding from venture capitalists Ignition and Ackerley Partners.

Source: C-Net News

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October 01, 2004

FindWhat has alternative to Google's AdSense program today unveils AdRevenue Xpress, an automated distribution partner program targeting small to mid-sized businesses.

The distribution method is similar to Google's AdSense, but it uses category- or keyword-targeting, rather than contextual targeting.

The program allows smaller partners, through a step-by-step set up process, to add a search box which returns ads from the Network. Alternatively, publishers who want to display ads on their site directly, rather than via a search results page, can choose a FindWhat category and display ads from that category.

In this way, a publisher could avoid displaying ads for a competitor and instead show ads for related products or services in other categories. Google's AdSense allows its publishers to block competitors' ads by creating a filter list of sites they do not want to link to from their site.

The visual result of this category directory implementation is similar to AdSense text links, with short text ads listed down the side of a page. The difference is that Google delivers its ads based on the content of the page, rather than on pre-selected categories or keywords. There is nothing to stop a publisher from displaying ads from both Google and FindWhat on the same page, if they choose.

As with all Network distribution partners, users of AdRevenue Xpress share a percentage of the revenue earned by when their site visitors click through to an advertiser's Web site.

"Web publishers don't currently have this kind of flexibility in their advertising options," said Rick Szatkowski, senior VP and GM of the Network. "We're letting them display it how they want and where they want. We also give them a whole set of reporting tools."

Initially being offered only to its 25,000 existing advertisers, the program offers a special 10-percent reward bonus to distribution partners who reinvest their share of the earned revenue back into their advertiser campaigns.

" advertisers already understand the value of advertising on the Network in driving highly qualified leads to their Web sites. Now they can reap all the benefits of our network by becoming distribution partners, too," Szatkowski said.

Szatkowski believes this move will help both advertisers, who will benefit from additional traffic being driven from quality sites in the Network, and distribution partners, who may not currently have taken advantage of's network to advertise their own site.

"With the reinvestment option, publishers who typically may not have participated in paid search to drive traffic to their site could now reinvest back into an advertising campaign and drive more traffic to their site, and not really ever have to have an advertising budget, because it's self-funded," Szatkowski said.

Web publishers who are not currently advertisers can open a new advertising account, then utilize AdRevenue Xpress to place ads on their own site and avail themselves of the 10% reward bonus. A typical small business might earn $100 a month in paid listings revenue, then reinvest $110 into their own advertising efforts, Szatkowski said.

"It will put them right into the game at that level," he added.

Source: Click Z

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September 30, 2004

Vivisimo launches

Search engine upstart Vivisimo is trying to convince people that Google isn't the most efficient way to find things on the Web.

The little-known Pittsburgh company is taking aim at Google and other industry leaders like Yahoo Inc. with a new search engine called, scheduled to debut Thursday after four years of fine tuning.

The search engine's name refers to the clustering technology that Vivisimo has refined to sort search results into different categories related to the initial search request.

For instance, entering "San Francisco" into's search box produces a set of general results at the center of the Web page, with a list of more specific categories, such as "Bay," "Hotel," "Art," "University" and "Giants" featured at the left. Clicking on any of the subgroups delivers a new list of links in the center of the page while still preserving the different groups.

Other search engines, most notably Ask Jeeves Inc.'s, offer similar clustering approaches, but Vivisimo's approach has been hailed as the most sophisticated and user-friendly.

The clustering technology is meant to simplify online search by breaking down results into related categories instead of bunching them in a single listing that can span tens of thousands of links scattered across hundreds of Web pages.

"There is almost too much information on the Internet now," said Vivisimo CEO Raul Valdes-Perez. "We think we have a better way to differentiate the results."

Valdes-Perez's likens Vivisimo's clustering system to a book store that stacks its selections by subject matter or author instead of just scattering all the titles across a sprawling floor.

Vivisimo already has attracted a cult following among the online cognoscenti who use a sample search engine offered on the company's Web site. The site handles about 6 million search requests per month - an amount that Google processes in less than an hour on a typical day.

Despite its low profile, privately held Vivisimo turned profitable two years ago, Valdes-Perez said. The 20-employee company, seeded by a $1 million grant from U.S National Science Foundation, collects most of its revenue from licensing its technology to other Web sites.

Valdes-Perez, along with Vivisimo co-founders Jerome Pesenti and Christopher Palmer, decided the unusual spelling of the company's Web site frustrated visitors and prevented more people from discovering the clustering technology. That inspired the decision to launch a separate search engine under, which is expected to make money by displaying text-based ads common on other search engines.

Naming the new search engine Clusty probably wasn't the best choice, said industry observer Chris Sherman, predicting many people will confuse the site with Krusty the Clown from the TV show, "The Simpsons."

But Sherman does believe's approach will appeal to the widening audience of Web surfers who are becoming more discriminating as Google, Yahoo and Ask Jeeves add more bells and whistles to their own search engines.

"The search engine experience is becoming much richer," said Sherman, editor of Search Day, an industry newsletter. "The big question for (Clusty) is whether it will be able to generate enough buzz to get people to come try it out."

Clusty isn't relying solely on its clustering technology to make its mark. The site also is introducing a feature that offers customized index tabs devoted to Web blogs, or "blogs," online gossip and online auction giant eBay.

Supplanting Google as the Internet's search kingpin won't be easy, partly because the company's name - also once ridiculed as a silly - has become synonymous with looking things up online.

Google controls 36 percent of the Internet search market, trailed by Yahoo at 29 percent, according to the latest data from research firm comScore Networks. Software giant Microsoft Corp. hopes to make the market even more competitive with its own search engine at

Clusty also covers a small slice of the Web compared to the better-known search engines. The site will crawl 5 million to 10 million Web pages and draw upon the indexes of other sources to supplement its results. By comparison, Google crawls 4.3 billion Web pages.

"We don't think it matters if you are crawling 5 million or 5 billion pages because no one looks at more than a handful of the results anyway," Valdes-Perez said.

Source: Forbes

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Will search engine advertising last until 2010?

Speaking before 100 people gathered for the Emerging Technologies Conference (ETC) at MIT, Eric Brill, a senior researcher at Microsoft, said the monetization model of Internet search technology could be at risk.

Brill said search technology will be a big money maker for Google and others in the short term, but he predicted the trend may not last long.

Brill's comments come on the heels of Google's highly successful IPO last month and bullish Wall Street reports this week that sent Google shares soaring to a high of $127.

"There's tons and tons of money to be made," said Brill. He acknowledged that Microsoft is intent on playing catch up with its own web search engine later this year yet projected that both companies could hit a fiscal wall.

"There are two fears here: The better we get at search, the cheaper the ads are," Brill said. "Another possible problem is it is cheaper and cheaper to build a search engine. It could at some point get commoditized."

His brief -- and targeted -- comments annoyed one ISV who sat on the M.I.T. panel, entitled Next-Generation Search.

"I have to disagree with Microsoft saying search engine is not a formidable task," said Liest Capper, CEO of Australian ISV Mooter, which developed a web search engine that tracks down data based on sophisticated user profiling technology.

The panel included representatives from Mooter and other web search innovators including Blinkx, Nexidia and Dipsie. Blinkx, of London and San Francisco, offers an IE plug-in that provides contextual searches of data stored on local drives and the web.

Nexidia, Atlanta, offers high speed phoenetic searching that is capable of searching data far faster and more accurately than other engines today, company executives said.

Dipsie is an ISV in Chicago whose web crawling and indexing engine will search well beyond the number of web pages Google and Yahoo index today, said Jason Wiener, of Dipsie. He estimated that those two leading search engines scour only 1 percent of all the web pages available on the Internet.

Dipsie's SEO offering will be announced to the market in the coming weeks, he said.

Brill had little to say about Microsoft's next-generation web search technology except that the traditional text-based hunt and peck search would vanish within three years.

"What's wrong is we have document-centric views" of search results, he said. "We're trying to take a more info-centric view of search." The Microsoft researcher, however, avoided a question by the panel moderator on Microsoft's search technology plans for Longhorn.

Microsoft recently acknowledged that it will delay the release of the next generation file system in Longhorn code-named WinFS and will instead offer enhanced and faster searching in the Windows client upgrade due in 2006.

Recently, Microsoft CEO Steve Ballmer acknowledged that web search -- and corporate data search -- is a big focus for Microsoft. At another event in the Boston area last month, Ballmer pointed to AltaVista as Search Version 1.0, Yahoo as Search Version 2.0 and Google as Search Version 3.0.

Microsoft, he said, will develop a next generation of search technology that would not only allow companies to search the Internet more effectively but search their computer networks, hard drives and e-mail more effectively.


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September 18, 2004

ThomasB2B launches new online advertising network will launch a new online advertising network which is based after similar ones from the likes of Yahoo's Overture and Google, but which differs in two key aspects.

First, it is focused exclusively on the business-to-business market; and second, it matches ads with search queries and content through predefined categories, not keywords.

As in the case of the Overture and Google ad networks, advertisers build text-based ads with links to their Web sites. These ads, in turn, run on Web sites that participate in the ad network. Whenever a Web surfer visits an ad network Web site and conducts a search or calls up a page, ads that are contextually related to the topic of the search or the page are served up.

Following the Overture and Google models, a ThomasB2B advertiser decides how much it is going to pay each time someone clicks on its ad to go to its Web site, a model known as pay-per-click. This amount of money in turn determines which position that ad occupies when it runs, in relation to other ads. The more an advertiser pays, the higher the ad runs, a method commonly known as bid-for-position. Minimum bids are $0.25 per click.

However, by focusing only on the business-to-business market -- in other words, on companies looking to sell their products and services to other companies -- the network has a narrower focus than the Google and Overture networks.

What may miss in amplitude of scope, it hopes to make up for in the depth it expects to gain in the business-to-business segment, said Dan Savage,'s president and chief executive officer.

"We believe we're entering the era of specialized online advertising networks," Savage said. This development is comparable to the emergence of trade magazines, which cater to advertisers that find little value in marketing themselves through general-interest magazines, he said. "It's the beginning of a growing field."

More significantly, has devised a taxonomy for matching ads with searches and content that eschews the common keyword approach, where for example ads about baseball would be served in pages and searches containing related keywords such as "bats," "world series" and "gloves."

Instead, has its advertisers tie their ads to predefined business categories, which the company believes eliminates a common problem with the keyword method, in which a keyword's multiple definitions could result in an ad for, say, a baseball glove appearing in a page about winter gloves. "The problem with keywords is that words can mean many things," Savage said.

With the category-based approach, an advertiser can be very granular and specific about the context of its ad. For example, has over 100 categories for paper, including tissue paper, blueprinting paper or cigarette paper. There are about 10,000 categories in the ad network. has a sophisticated query processor that takes natural-language search queries from affiliates and comes up with a category match, Savage said. The system to match ads to content on pages is still in development, he said.

Currently, has signed about 10 sites for its network, but expects that number to grow to about 200 by the end of this year, Savage said.

At the site (, corporate buyers can search for suppliers of products and services in seven different languages and find business directory listings on companies from 29 countries. These listings come from one of its owners: Thomas Publishing Co.'s Thomas Global Register Directory. The other partner in the joint venture is

Source: Info World

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August 31, 2004

ClickRisk reduces click fraud

Security developer Inviplex says its ClickRisk service would be released on September 1, 2004. The ClickRisk service is designed to raise awareness of click fraud, which some analysts believe accounts for more than 18 percent of cost per click advertising traffic.

ClickRisk identifies a client's risk profile and analyzes Web server data, helping determine whether clicks are genuine or fraudulent.

"We must raise awareness of click fraud, and find new ways to help identify and stop it, millions of dollars are being lost and jobs are at risk because of it," says Adam Sculthorpe, founder and CEO of Inviplex, Inc.

Sculthorpe said his experience in the security industry led him to create the ClickRisk service. He believes issues surrounding advertising integrity will continue to increase in importance.

"We need to monitor integrity and put tracking of potential fraud into the hands of the paying customer, the advertising providers simply do not have access to their client's equipment and therefore cannot accurately determine whether the click-through is a real one or a fake," says Sculthorpe.

"If a business spends marketing dollars on a cost per click basis they need to know a genuine person is clicking their ad, not a computer program. We can help to resolve that issue with intelligent risk management strategies," Sculthorpe says.

Source: The WHIR

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August 23, 2004

The Internet beats catalogs and direct marketing by a country mile

In 2003, close to 100 million adults completed purchases after doing online research. This is higher than the number of adults who actually purchased through catalogs, direct-mail ads and even telemarketing calls combined, The Dieringer Research Group says in a study released today.

Dieringer noted that 114.1 million adults searched for product information on the web last year, and that 98.9 million of this group went on to make purchases either online or offline.

By comparison, 106.7 million adults made purchases through catalogs, direct-mail and telemarketing, it added. Dieringer’s annual American Interactive Consumer Survey of 3,000 U.S. adults, which was completed in June, also noted that three out of five adults go online regularly and that the majority of U.S. residents now use the web to shop.

"Consumers use of the Internet to research products continues to rise, even though the number of people going online for the first time has dropped considerably," said Thomas E. Miller, senior consultant at The Dieringer Research Group. "Our research shows that the Internet now influences the purchase decisions of as many shoppers as mail order catalogs, direct mail, and telemarketing combined."

Online shoppers are also more brand-impressionable online than ever before, Dieringer said. It noted that online research changed opinions toward brands among three out of five shoppers who researched products online before purchasing. "This represents a 20% increase in shoppers whose brand opinions changed online compared to 2003," Dieringer said.

Dieringer, noting that more than half of online adults now also access financial accounts on the web, said that use of online shopping and financial services rises significantly among adults under age 35 and adults with incomes above $75,000.

"This means that the earliest adopters of the Internet are also the ones most likely to continue to reap the benefits of going online," Dieringer said.

Source: Internet

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August 20, 2004

Google and others hit with lawsuit over gambling ads

Gambling ads on Google, Yahoo and other major Web sites are illegal in California, according to a lawsuit filed Tuesday.

The 60-page filing, presented in San Francisco Superior Court, alleges that the companies sell rights to Web advertisements based on searches for terms such as "illegal gambling," "Internet gambling" and "California gambling."

The online businesses also use geotracking software to target particular regions, including California, for illegal gambling ads, according to the lawsuit.

The lawsuit demands that the companies stop accepting the advertisements and give California "millions of dollars in ill-gotten gains," said attorney Ira Rothken, one of several attorneys from firms involved in the class-action lawsuit.

The suit is the latest to involve Internet gambling, which has become a multibillion-dollar-a-year business and is usually focused on online poker or blackjack. Wireless interests, including European cell phone service providers, also offer gambling opportunities to their subscribers.

Yahoo and Google, in turn, rake in a majority of the millions of dollars gambling firms spend on advertising, according to the lawsuit. Representatives from the two companies did not return a call seeking comment.

In all, about a dozen high-profile Web companies are named as defendants. Included among them is CNET Networks, publisher of

Source: C-Net News

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August 17, 2004

A billion people online by 2010

It is expected that, by around 2010, a billion people will be clicking away on the Internet. However, generating a profit out of some of the newly wired portions of the world could be more difficult.

The number of PC users is expected to hit or exceed 1 billion by 2010, up from around 660 million to 670 million today, fueled primarily by new adopters in developing nations such as China, Russia and India, according to analysts.

The number of PC users worldwide is expected to reach 1 billion by 2010, up from about 670 million today, fueled primarily by new adopters in developing nations.

PC and software makers are ready to make new sales but have their work cut out for them. Poverty, unreliable energy supplies, a multiplicity of languages, regional laws and education levels are all potentially major obstacles.

"It took more than 20 years to grow the worldwide base of PC users to 600-plus million. By 2010, I expect that to grow to 1 billion, due to opportunities in emerging markets and new scenarios and form factors," Microsoft CEO Steve Ballmer wrote in a recent e-mail to employees, outlining the company's growth potential.

Selling computers to people in these countries, however, won't be easy. Poverty, unreliable energy supplies, a multiplicity of languages, regional laws and education levels are all potentially major obstacles. And they could all get more daunting, rather than easier to manage, as time goes on.

"The problem isn't with the first billion, but the second or third billion," said Roger Kay, an analyst at IDC.

To penetrate these markets, companies are creating the sort of nation-building programs more often associated with organizations like the U.S. Agency for International Development (USAID) and the United Nations.

Microsoft, for example, has set up an initiative called the Local Economic Development Program for Software, in which company employees advise government officials on building tech programs at local universities, intellectual-property laws and other issues. Brazil is one of eight countries in the program.

"A lot of companies want to get into the export business, but you have to build your internal capabilities first." -- Maggie Wilderotter, senior VP of Microsoft's worldwide public sector division.

"A lot of companies want to get into the export business, but you have to build your internal capabilities first," said Maggie Wilderotter, senior vice president of the worldwide public sector division at Microsoft, who, as part of her job, meets with people like Brazilian President Luiz Inacio Lula da Silva and ministers of Jordan's national cabinet.

Designing products to be cheaper is also an issue. Hewlett-Packard's 441 system is an early attempt to grapple with the price and management issues. Introduced in South Africa, the computer features four keyboards with mice and monitors so that four different people--in a variety of the local languages--can work simultaneously. The Linux-based computer may get introduced to Southeast Asia later.

If technology can be seeded in a national economy, the gross domestic product will grow and in turn lead to future customers, said Maureen Conway, vice president of emerging market solutions at HP.

"But you've got to start the cycle somewhere," Conway said. "The low-cost access device is critical to product development."

Paid Inclusion

In South Africa, the company has also taken over an abandoned university to train people on call center procedures and PC repair. In September, President Thabo Mbeki will speak at an HP-sponsored event.

Intel, Microsoft and others are developing cheaper components and software for these regions, along with technologies like voice and handwriting recognition.

Hitting a billion in a few years appears inevitable. IDC estimates that there were 670 million PC users worldwide in 2003. A little more than a 152 million PCs will leave factories this year, and that tally is expected to grow over time. With about half of these going to new users, IDC believes that the PC user population will grow to 1.2 billion by the end of 2009, a 79 percent increase over six years.

Gartner says there were 631.8 million PC users at the end of 2003 and 661 million now. The number will hit 953 million at the end of 2008 and cross over the billion mark in 2009. While those are huge numbers on paper, the annual compound growth rate is about 8 percent, Gartner analyst George Schiffler said.

Prices, however, will increasingly become an issue as the user population expands. A low-end Windows PC costs about $350 without a monitor. That's just above the $340 per-capita income of Vietnam, according to statistics from that country's Can Tho University. Not all the new users will own their own system: Many will likely first learn through places like the PC baangs in South Korea.

"There is a remarkable reliance on cybercafes in many of the emerging markets, especially in Asia and Africa...We are sometimes talking about just a battered old PC sitting on the sidewalk in a lane off a busy street." -- Genevieve Bell, anthropologist.

"There is a remarkable reliance on cybercafes in many of the emerging markets, especially in Asia and Africa--and these are not the cybercafes as we imagine them, either. We are sometimes talking about just a battered old PC sitting on the sidewalk in a lane off a busy street," wrote Genevieve Bell, an anthropologist at Intel who has been researching PC use in Asia for the past few years. "At least 70 percent of the market in India and many other markets is still 'assembled PCs' that are built for a particular person."

Microsoft is already facing some of the thorny price disparities. HP sells Pavilion desktops in China with Windows and Linux. Spot checks at stores show a basic Linux Pavilion with a monitor, selling for $700 (5,499 yuan), while the Windows XP version sells for $60 more.

Dell has certified its business laptops and desktops to work with Red Flag Linux, a local variant of the operating system, and sells some PCs with DOS, which can be loaded with Linux later. Lenovo sells Linux PCs, but only to the government. The price is lower, but a Lenovo spokesman would not specify how much lower.

The price delta gets even larger with regional manufacturers. In Kuala Lumpur, Malaysia, a dealer called PC Zone can put together an Intel Celeron 2.0GHz PC and a 15-inch monitor for about $272. Installing Windows XP adds $83, a 31 percent price hike. Piracy, of course, also remains a problem. Microsoft has developed cheaper, cut-rate versions of Windows XP for Thailand and Malaysia.

Wilderotter acknowledged that Linux is gaining popularity in some sectors of the world but asserted that open-source software comes with hidden costs. Additionally, Microsoft has developed programs to familiarize developing nations with its software. In 67 countries, schools can obtain a certified copy of Windows at no cost for a donated PC and can buy a copy of Office for $2.50, she said. The company is also providing millions in educational grants.

Meanwhile, multinational hardware manufacturers must contend with local, often cheaper providers. In Mexico and China, multinational PC makers are making gains. Dell will likely soon become the No. 1 PC maker in Latin America, which is currently the fastest-growing geographical market, according to Charles Smulders, an analyst at Gartner.

But in Eastern Europe, Russia and other places, local manufacturers like Optimus and Kraftway remain strong.

Web Hosting

Component makers, similarly, have to contend with a sea of their own recycled parts. In Western China, some schools are tacking down motherboards and other parts onto pieces of wood to make school computers.

"You can get a PC price tag down to 100 bucks," IDC's Kay said. On the other hand, the opportunity is immense. If 670 million people are currently using PCs, that only comes to 11 percent of the global population. Although declining prices lead to lower profits per unit, low prices can also lead to increased shipments, larger aggregate profits and a ubiquity of use that fuels further sales. That happened in North America, after all.

"The success of the PC platform is its ability to adapt to new forms and capabilities," Smulders said. "That is going to be a major influence."

People in these regions also adapt to technology fairly quickly in the right circumstances, HP's Conway said. In India, HP gave a group of village women solar-powered printers and cameras. The idea was that they would create a business out of making ID cards, a requirement for Indians to have but difficult for rural villagers to obtain without hours of bus travel.

The women have tended to double their family incomes, not so much through ID cards but rather portraits. "Instead of owning a camera, they are very happy to have a picture of their children taken every couple of days," Conway said.

In another Indian experiment, the company has stocked a van with PCs and wireless connectivity that drives between villages and allows farmers to test their soil, get information about crop prices, or receive advice from agricultural experts in Bangalore. HP is now looking at ways to turn the van over to local entrepreneurs.

Developing nations are also not necessarily bargain shoppers. China adopted the Pentium 4 at a more rapid rate than the United States, according to Intel.

Many technology companies have also honed the art of breaking into new markets. Company executives hold high-level meetings with local leaders to discuss the growth of the local high-tech industry. Intel CEO Craig Barrett, for instance, regularly conducts regional sweeps. Partnering with local companies and universities has become commonplace.

In the end, though, it comes down to a question of the PC's utility. "If (potential consumers) see it as a productivity tool, then they can see it as an investment
--like a car," Kay said.

Source: C-Net News

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August 10, 2004

Online advertising to beat magazine ad spending

The Internet’s ability to target consumers and deliver TV-like advertisements are two reasons why online advertising spending is rapidly growing and will overtake the amount spent on magazines by 2008, according to a report by JupiterResearch.

By then, online ad spending will total $15 billion, compared to magazines’ $14.5 billion, said Gary Stein, a senior analyst.

His report is set for release on Wednesday in New York at the Jupiter/ClickZ Advertising Forum Conference & Expo.

Stein said Web sites have become “more targeted and much smarter” about measuring audiences.

Paid-sarch advertising, which links marketers’ messages to Web content, is an especially attractive vehicle, Stein told the Wall Street Journal.

Source: CBS MarketWatch

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July 22, 2004

Click fraud becoming a growing problem

Internet marketers facing higher advertising fees on search networks are becoming increasingly concerned about a form of online fraud that was thought to have been contained years ago.

The practice, known as "click fraud," began in the early days of the Internet's mainstream popularity with programs that automatically surfed Web sites to increase traffic figures.

This led companies to develop policing technologies touted as antidotes to the problem. But some marketing executives estimate that up to 20 percent of fees in certain advertising categories continue to be based on nonexistent consumers in today's search industry.

Net marketers facing higher ad fees as are becoming increasingly worried about an online practice known as "click fraud."

The persistence of click fraud has exposed a fundamental weakness in the promising business of Internet search marketing, but most advertisers aren't sure how to address the problem.

In one recent example of the problem, law enforcement officials say a California man created a software program that he claimed could let spammers bilk Google out of millions of dollars in fraudulent clicks. Authorities said he was arrested while trying to blackmail Google for $150,000 to hand over the program. He was indicted by a California jury in June.

Matt Parrella, chief of the San Jose branch of the U.S. Attorney's Office in Northern California, said that case was "not unique." The problem "is certainly not shrinking, and we're ready to prosecute people," said Parrella, whose office handled the Google case.

Click fraud is perpetrated in both automated and human ways. The most common method is the use of online robots, or "bots," programmed to click on advertisers' links that are displayed on Web sites or listed in search queries. A growing alternative employs low-cost workers who are hired in China, India and other countries to click on text links and other ads. A third form of fraud takes place when employees of companies click on rivals' ads to deplete their marketing budgets and skew search results.

Although the extent of click fraud is impossible to measure with any certainty, its persistence has exposed a fundamental weakness in the promising business of Internet search marketing. Google's pending initial public offering has been widely anticipated as a barometer of online advertising and the post-apocalyptic dot-com climate in general.

"It's hard to tell how big the problem is, but people are looking at it closer and closer as the cost of search advertising goes up," said John Squire, vice president of business development of Coremetrics, a Web analytics firm. "Click fraud is a fin sticking out of the water: You're not sure if it's a great white shark or a dolphin."

Unlike advertising in traditional media such as billboards and print publications, "cost per click" Internet ads displayed with specific keyword searches have been promoted as a definitive way for companies to gauge their exposure to potential customers. As a result, U.S. sales from advertiser-paid search results are expected to grow 25 percent this year to $3.2 billion, up from $2.5 billion in 2003, according to research firm eMarketer. From 2002 to 2003, the market rose by 175 percent.

As more advertisers have competed for desirable keywords in their industries, the cost for clicks has risen too. On average, advertisers are paying 45 cents per click this year, according to financial analysts, up from 40 cents in 2003 and 30 cents in the second quarter of 2002. In certain sectors, such as travel, legal advice and gaming, the cost can reach several dollars per click.

But marketing executives say click fraud is pervasive among affiliates of search leaders Google, Yahoo-owned Overture Services and In a typical affiliation, any Web publisher can become a partner of these large networks by displaying their paid links on a Web page or within its own search results and then share in the profits with every click.

"There's a fatal flaw in the cost-per-click model because a ton of marketing dollars can be depleted in a fraction of a second," said Jessie Stricchiola, president of Alchemist Media, a search-engine marketing firm based in Los Angeles that specializes in fraud protection. "Technology is continuing to be developed that can exploit this pricing model at incredibly high volumes."

Google declined an interview for this report, citing the mandatory "quiet period" before its initial public offering, which is expected to raise $2.7 billion. But the company said in a statement that it has been "the target of individuals and entities using some of the most advanced spam techniques for years. We have applied what we have learned with search to the click fraud problem and employ a dedicated team and proprietary technology to analyze clicks."

In recent documents filed with the Securities and Exchange Commission, the company also acknowledged the problem as a threat to its revenue, of which 95 percent is derived from advertising. Google and other search networks provide refunds to advertisers when click fraud has been discovered.

"If we are unable to stop this fraudulent activity, these refunds may increase," Google said in its SEC filing. "If we find new evidence of past fraudulent clicks we may have to issue refunds retroactively of amounts previously paid to our Google Network members."

Google and Overture employ "fraud squads," or teams of people dedicated to fighting click schemes. But at least two marketing executives say such countermeasures are missing fraudulent clicks that are responsible for between 5 percent and 20 percent of advertising fees paid to all search networks.

Overture spokeswoman Jennifer Stephens refutes that estimate, saying that the numbers likely represent acts of fraud that are ultimately caught. She added that Overture filters most fraudulent clicks with the best antifraud system in the industry, which combines technology and human analysis.

"We take this very seriously; it's the foundation of what we do," Stephens said. "If an advertiser has a question about it, we look into all matters."

Cost-per-click advertising comes in many forms, but it essentially lets marketers gain exposure on a Web site and pay only when people click on their ads. Google and Overture let advertisers bid for placement of paid links, which appear when certain keyword searches are conducted on the networks' sites or those of third parties that partner with them. Keyword ads can also be distributed according to the content of partners' sites and displayed on non-search pages. (CNET Networks, which publishes, partners with Google for shared advertising revenue.)

Most advertisers are aware of the click-fraud issue but have not delved into it because of the technical complexities involved. Others are concerned that they could jeopardize their relationships with the powerful search networks if they complain too loudly.

"It is a bigger problem, but folks just don't want to take the time to track it down because it's a complex problem," Coremetrics' Squire said. Given that some of the largest marketers manage up to 1 million keywords in a campaign, he added, the data can be difficult to crunch.

Danny Sullivan, who runs a quarterly search-industry conference, said many advertisers do not raise their concerns with the ad networks because "they're afraid that if they complain, it will hurt their free listings."

Still, more fraud-detection technologies are emerging to help advertisers analyze their campaigns and traffic. Some advertisers and search-engine marketing companies say they are compiling lists of sites that generate a high number of clicks but not sales.

Coremetrics, Urchin and are just a few that sell technology to examine click rates and sales that result from paid searches. Alchemist Media, which charges flat fees for its consulting services, has detected fraud while acting as an intermediary between search networks and marketers.

In general, Alchemist's Stricchiola estimates that 10 percent of all search ad clicks could be fraudulent. But she said the rate can reach 20 percent in particular businesses that have been targeted for click fraud.

Roy de Souza, CEO of advertising technology firm Zedo, said his company's geotracking systems have traced Internet Protocol addresses to detect click operations in China. In describing one common scheme, he said a legitimate site is duplicated under another name, complete with text ads from a search network. A bot would then be trained to click on the ad links that appear on the bogus site, said de Souza, who estimated that click fraud affects 10 percent to 20 percent of today's search network ads.

Many policing technologies can counter click fraud by analyzing Web traffic logs or surfing behavior. If a page is turned every 1.8 seconds over a period of time, for example, fraud-detecting systems will flag the traffic as suspiciously uniform.

Human operations can be more difficult to detect because a wide network of people can click on ads from different computers across many regions, without a steady pattern. According to a report in the India Times, residents are being hired to click paid links from home, with the hopes of making between $100 to $200 per month.

In other instances, the source of bogus clicks can be much closer to home.

Joe, the chief executive of an Internet marketing company, enjoys clicking on his rivals' text ads on Google and Yahoo because his competitor must pay as much as $15 each time he does it. Eventually, such phantom clicks can add up and drain a rival's budget.

"It's an entertainment," said the executive, who asked to keep his name and company anonymous. "Why do you run into a store without dropping a quarter in the meter? You know it's wrong, but you do it."

Kevin Lee, chief executive of search marketing firm Did-It, estimates that fraud from such "drive-by" competitive clicks and affiliate scams makes up about 5 percent of the industry's total sales. Lee concedes that he can only guess at the number, but he does know one thing for sure:

If it gets much higher, he said, "then we should all be getting worried."

Source: C-Net News

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July 20, 2004

How to solve irrelevance with Textonomy

Any Web user trying to carry out online searching is faced with excessive amounts of irrelevance, incoherence and downright inaccuracy.

Routinely, search-engine enquiries fail to produce relevant results; advertisements fail to link appropriately to websites; and products cannot be found in online store catalogues.

Successful searching can come only from a procedure which places sense at the core of its operation. A sense engine provides the frame of reference within which a search engine can operate. This means relying on those branches of linguistics which analyse what is involved when people handle sense - in particular, semantics and stylistics.

Any procedure which wants to improve the relevance, coherence, and accuracy of online searching has to be semantically based, to enable them to choose the right words to capture relevant records, and also stylistically aware, reflecting the way people vary their language according to their regional, social, and cultural backgrounds.

Semantic and stylistic principles are at the heart of any linguistically based approach to online searching - searchlinguistics.

A lexicological solution derived from this frame of reference is the basis of a suite of products known as Textonomy.

Textonomy rejects the view that searches based solely on statistical algorithms can achieve a successful outcome. It relies instead on the systematic harnessing of human linguistic intuition, tapping into native speakers' knowledge about the semantic relationships between words and the contexts in which words occur.

Because any word in the language can (in principle) be part of a search enquiry, all words have to be analysed to determine their potential as discriminators of online documents.

This is done by assimilating the content of both a dictionary and an encyclopedia The sense engine identifies all the likely search words in a language and rates them for their contextual distinctiveness. The words are then related to a taxonomy of semantic categories that is encyclopedic in scope. Each sense of each dictionary word is assigned an encyclopedia classifications.

The sense engine which drives Textonomy is the result of a searchlinguistics development programme which has taken six years to date and involved an investment of over £4 million in lexicographic and encyclopedic research.

The dictionary component currently has a coverage of over 200,000 items, and the encyclopedia component contains some 4 million words. The apparatus developed to enable the sense engine to function has received a UK patent, with US patent pending.

Source: Crystal Semantics

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July 11, 2004

Paid search taking a breather

For the past two years, paid search has been increasing at a fast pace. However, the past quarter showed some signs the industry is simmering down.

Analysts and industry executives dismiss the idea that the paid search business is contracting. Instead, they say, paid search may be growing up.

"Could the search market--after explosive growth in 2002 and 2003--have reached the beginning stages of maturity, with pronounced seasonality in terms of price and volume? Probably," Mary Mahaney, an equity analyst at American Technology Research, wrote in an investor note Thursday.

The first and most pronounced sign of this trend taking hold occurred Wednesday, when Web giant Yahoo reported quarterly earnings that only met Wall Street expectations.

Because Yahoo's Overture Services subsidiary runs one of the largest paid search businesses--and counts CNN and Microsoft's MSN as clients--its results are closely watched as a litmus test for the industry.

The other heavyweight is Google, which feeds cash to big-name partners such as America Online and Ask Jeeves. Google is preparing to go public this year and bases more than 90 percent of its revenue on paid search.

During a conference call Wednesday with analysts, Yahoo executives admitted that its paid search query volume and pricing were flat last quarter, causing a scare on Wall Street. Shares of Yahoo stock plummeted 12 percent in after-hours trading, but recovered a bit the following day.

Paid search is still growing, but not as quickly as the previous quarter. Overture revenue grew 39 percent from last year, but that's less than the 45 percent growth it saw during the first quarter, according to Mahaney's note.

"Yahoo grows in step functions," said Safa Rashtchy, an equity analyst at Piper Jaffray. "You always have a flattish period. You can't have two jumps in a row at (the) level of the first quarter."

Commercial search is a business that relies on volume. Companies such as Yahoo's Overture subsidiary and Google allow advertisers to bid on keyword placement, and then they pay the companies a fee every time a Web surfer clicks on the link.

Overture and Google have sparked a financial revival for many Web companies and brought battered giants such as Yahoo, America Online and MSN back to life. The business has helped Yahoo so much that it acquired Overture last year for $1.63 billion.

While the business has been booming, there are some concerns that per-click pricing has reached its peak. Once Google goes public later this year and reports earnings every quarter, there will be a better understanding of how to measure paid search.

"Seasonality was only a minor concern last year, and it is a major concern now," said Jordan Rohan, an equity analyst at Schwab Soundview Capital Markets.

Still, Wall Street analysts are bullish and putting a positive spin on these results. The euphoria and the breakneck growth for paid search may benefit from a bit of a slowdown, they say. Just look at traditional advertising, which shines when the weather is lousy and then sags during beach-going months.

To its credit, Yahoo continues to show strong signs of growth outside of paid search. Subscription revenue jumped to $104 million from $88 million last quarter, while the company's long-stagnant HotJobs subsidiary showed some signs of much-needed life.

In the meantime, Yahoo executives are crossing their fingers and hoping the mood swings will change like the seasons.

"To us, we're very happy," Yahoo CEO Terry Semel said in an interview Wednesday. "We weren't at all surprised. Pricing is stable. Everything is good."

Source: C-Net News

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July 08, 2004

IT Interactive launches new design for GenieKnows

IT Interactive today announces the launch of, Version 3.0.

The new version of the innovative search engine integrates an attractive design with relevancy- focused results.

The search portal underwent an extensive overhaul; the redesigned interface features clear and comprehensive navigation architecture for search users, advertisers, and affiliates, alike.

"We are thrilled to announce that Version 3.0 is now live; our technicians and designers have been working hard to bring users an innovative site design that is both visually and functionally appealing," said Barbara Manning, President of IT Interactive Services.

"The new face of marks the beginning of a series of new and exciting ventures for us.

We are currently involved in industry-leading research with several Canadian universities that is certain to change the face of Internet search as we know it." delivers search users direct access to highly relevant product and service search results from a broad base of advertisers. delivers users editorial content and the latest news and information in Featured Articles, a unique complimentary online media-outlet dedicated to supplying visitors with quality, informative, entertaining content distributed across eight sites: Globe, Health, Taste&Style, Travel, Entertainment, Business, Life, and Sports.

GenieKnows Pay-Per-Visit Advertising allows advertisers to bid for keyword placement, based on site relevancy, within the GenieKnows network search results.

GenieKnows provides targeted search traffic for a wide range of advertisers through a Search Network that consists of over 350 partner sites, and serves over 180 million searches monthly. empowers its broad distribution network by conveying meaningful, relevant, revenue- generating search resources.

GenieKnows Pay-Per-Visit Advertisers and Search Distribution Partners can easily learn more information about Advertiser and Search Distribution Programs, as well as set up and manage their accounts using the new user-friendly interface.

Source: IT Interactive

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July 05, 2004

Telstra to revamp its Sensis youth-focussed search engine

Sensis – which owns the Yellow and White Pages telephone directory businesses – will announce its new Internet search engine at a briefing for analysts and media next Tuesday.

But analysts are most interested in how classifieds newspaper The Trading Post is fitting in with Sensis, after it was purchased for $636 million in March.

"The big issue is where they see the business going now they have acquired Trading Post – what they are going to do with that part of the business and how it's going to be integrated with Sensis," Graeme Woodbridge from CommSec said.

"What aspects of its integration with Sensis will add value to Trading Post?"

Sensis has embarked on an unusual, multi-million dollar advertising campaign in recent weeks to raise awareness of its brand, with the word "Sensis" written in chalk on city footpaths, as well as using traditional advertisements.

The campaign was to raise brand awareness, with the main product to be unveiled next week.

Previously, Sensis' general manager of search Greg Ellis has said the search engine would be aimed at people aged 15 to 28.

The company has said the search strategy will link up elements of online, voice, wireless and print, using Sensis' database of advertisers with the White and Yellow Pages as well as the online Citisearch and Whereis services and the Trading Post.

Sensis also acquired the Australian assets of Internet search company Looksmart earlier in the year.

Sensis has already launched a new operator-assisted voice service under the phone number 1234, and there is speculation the new website will be

Analysts say Telstra is trying to make a pre-emptive strike with its Sensis revamp, to protect its advertiser base from rivals such as Google and Yahoo.

Those search engines generate their business by advertisers who pay not just for ads, but for higher listings in searches.

That is an attractive option for businesses aimed at net-savvy young people who might prefer to look up a restaurant or tradesman through a search engine rather than flip through the Yellow Pages book.

"The major marketing campaign that we have seen over the last month is getting on board before competitive launches of the likes of Google over the next two to three months," one analyst said today.

"Google is going to be coming very aggressively here over the next three months. Telstra is trying to be a bit proactive."

Source: Mercury News

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July 04, 2004

Online advertising staging a comeback

Internet advertising and online marketing, once heavily criticized for its aggressive, repetitive use of banner ads is making a comeback, with rekindled interest in the industry triggering some deals.

"What you're finding is a lot of undervalued assets in some of these firms," said Don Scales, president and chief operating officer of Ltd., a Chicago online ad firm that on Tuesday, June 29, acquired rival Exile On Seventh LLC of San Francisco for undisclosed terms.

"As the market picks up, people recognize the assets are undervalued and are acquiring them for future growth."

In a related deal, e-mail marketing company Return Path Inc. of New York on Tuesday bought NetCreations Inc., also of New York, a provider of permission-based e-mail acquisition and sampling services, for undisclosed terms.

Those transactions come a day after Seattle online media firm aQuantive Inc.bought Web services firm SBI.Razorfish from Salt Lake City-based SBI Group Inc. for $160 million and a June 24 deal by New York-based Time Warner Inc.'s America Online Inc. to purchase Baltimore-based Inc. for $435 million.

"Online advertising is bouncing back," said Gary Stein senior analyst with JupiterResearch. "Surviving companies have money in the bank and want to further strengthen their positions, and there are a lot of new companies doing interesting and clever things that can be bought at a good price."

According to a May report by the Interactive Advertising Bureau and PricewaterhouseCoopers, Internet advertising totaled nearly $2.3 billion in the first quarter, the highest quarterly total since the two firms began tracking online ad revenue in 1996. That figure also represents a 39% increase from the $1.6 billion in advertising in the first quarter of 2003, though only a 4% increase from the $2.2 billion reported in the fourth quarter.

Denise Garcia, an analyst with Stamford, Conn.-based Gartner G2, expects Internet ad sales to total $10 billion in 2004. Although that remains a fraction of the $250 billion ad market, online advertising is growing at a 15% clip after years of single-digit growth, she said.

"Whenever an industry starts to mature, you start to see companies becoming more full service because their customers want to go to one company," Garcia said. "They don't want to go to one place for rich media, another for e-mail marketing. They want it all in one place."

To expand its range of service offerings, online marketing firm DoubleClick Inc. of New York acquired Chicago-based Performics Inc., a provider of search engine marketing services, for $65 million in a deal that closed June 24.

Search engine marketing firms help companies develop programs to drive traffic to their Web sites through search engines such as Google Inc. of Mountain View, Calif., and Overture Services Inc. (Nasdaq:OVER - news) of Pasadena, Calif., which Yahoo! Inc (Nasdaq:YHOO - news). of Sunnyvale, Calif., bought last year for $1.9 billion.

Stein said other search engine marketing firms that could draw acquisition interest include iProspect Inc. of Watertown, Mass.; Fathom Online Corp. of San Francisco; Inc. of Rockville Centre, N.Y.; icrossing inc. of New York; and Enquiro Search Solutions Inc. of Kelowna, British Columbia.

Garcia said she expects larger online marketing companies such as DoubleClick and Internet giants such as like Microsoft Corp.'s MSN, AOL, Yahoo! and Google to pick off other small, creative or specialty shops.

"The smaller guys who realize they just can't compete with the larger holistic approach to advertising are more likely to say, 'Buy me,' " she said.

Source: Yahoo News

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June 30, 2004

Ad agencies find SEM challenging

Traditional advertising agencies find that search engine marketing is really difficult. Not only is it more complicated than it would appear, but it's also difficult in making it profitable.

Companies offering keyword bidding tools have lulled some agencies into a false sense of confidence. "Our bidding tool will make search engine marketing effortless," they were told.

What these companies didn't tell the agencies was that they still needed search engine marketing expertise to use these tools effectively to maximize their clients' results.

As a result, many big, traditional ad agencies-and even interactive agencies-hate search engine marketing. Here are the top five reasons why:

1. Achieving profitability in managing clients' paid search advertising is extremely difficult: If you don't use a bid management tool, and if each of your customers doesn't spend in excess of $50K per month on paid search advertising, you won't make money. Period.

Trouble is, even many of the large client companies who employ agencies cannot justify spending more than $3K to $10K per month. The conversions aren't there; the keyword query frequency is not there. Charging a service fee of 20 percent (a typical pricing model for PPC management) on top of a monthly PPC spend of $3K is peanuts for the time necessary to do a good job. But ad agency clients are clamoring for search marketing: they know it works; they know they have to be in the game; and they want their agencies' help. But trying to do SEM is breaking the agencies and they know it.

2. A shortage of skilled SEM practitioners: Employees with even a few years of search engine marketing experience are hard to find and expensive! Most are groomed at search-engine-marketing-only firms. Without experienced staff, an internal training program won't succeed. Without an in-house training program, you won't develop experienced staff-presenting a catch-22.

3. Even "poaching" experts cannot produce superior results: If an agency lures away a few ex-SEM-firm types, they join the agency ill-equipped to deliver results. Much of the intellectual property and knowledge that made them successful were contained in the tools that the SEM specialty firm developed in-house. Most, if not all, of the tools that made these employees efficient, speedy, and successful are not commercially available.

SEM firms have spent the last six to seven years building proprietary tools that provide enormous leverage to staff. These tools evolve and grow with the organization, and because they are enterprise-based application suites, they don't leave with the employee.

4. SEM is so complex it requires singular focus. Performing effective SEM requires practitioners to deal with 10 or so search properties who are always changing database partners, algorithms, PPC bidding rules, and paid inclusion programs. Keeping up on it all requires a dedicated focus. There's a significant learning curve every month. Most agencies are not built to manage that much change, that much data, and constantly evolving best practices, strategies and tactics.

5. SEM requires a commitment to research: The biggest breakthroughs in process improvement come through data intensive research and analysis of linguistics and search engine user behavior. This requires collection of data and results for millions of visitors in a variety of verticals with a variety of online marketing objectives for their sites.

In the same way that most agencies didn't build direct marketing capabilities in the 1970s, because the practice was too data dependent and mathematically based, most agencies do not want to be bothered with the ongoing research and analytics necessary to make SEM effective.

With all this being said, some agencies have decided to partner with SEM firms and are letting the SEM firms have direct client contact. Why? Because there is too much education required for the agency to deliver the work required and yet the agency wants to successfully meet the demands of its clients.

But most agencies still hate search engine marketing. So they can curse the wind or adjust their sails.

Source: Mediapost

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June 25, 2004

Harder to distinguish between regular and paid results?

There will soon be a report published by a consumer panel that concludes searchers find it harder to distinguish between paid pay-per-click text ads and regular (organic) search results.

In a discussion on "Building Trust on the Web" under the Consumer WebWatch's April summit on Web credibility, Leslie Marable of Consumer WebWatch told that according to one study of April last year 60 percent of the consumers they polled "had no idea that some search engines charged fees in exchange for prominent placement of search results."

It should be added that since then several search engines have started designating their pay-per-click search results more clearly, not at least because of pressure from the American Federal Trade Commission. This was clearly one of the reasons Consumer WebWatch commissioned a new study.

The new study is not based on a phone survey like the previous one. Instead Consumer Webwatch has opted for an anthropological/ethnographical in-depth study of 17 people.

It turns out that all participants were surprised when they learned about pay for placement -- even the more "advanced" Web users.

Search sites often mark paid results as "sponsored". One participant noted that "A sponsor is someone who gives money to support programs," and he did clearly not read this to mean "paid text ads".

This is not a representative survey. You need more than 17 respondents to achieve that. Still, we would not be surprised if a majority of searchers are unable to distinguish between pay-per-click text ads and regular search results -- especially when the text is formatted and presented in a similar way.

Does it matter? Well, a cynic may argue that "what they do not not won't hurt them" -- as long as they find relevant results that is.

Both Overture and Google AdWords spend a lot of resources on ensuring that the paid text ads actually are relevant -- not only to avoid complaints from organizations like the Consumer WebWatch, but also in order to make advertisers happy. Relevant text ads results in more click-throughs and higher conversion rates.

But there is also the question of credibility. If this marks the start of a new debate on the legitimacy of pay-per-click text ads, the search sites may get hurt, as these ads have become one of their most important sources of revenue.

Moreover, the success of a site like Google is built on a good reputation, and Google cannot afford to loose that.

Google has actually done a lot to distinguish the text ads from regular search results, placing them i colored text boxes set apart from the rest of the listings. However, they are still called "Sponsored Links".

So why don't they just call the adverts "Adverts"? Our guess is that they are afraid that this will cause a drop in click-throughs and lower revenue.

In the long run, however, the risk of more bad publicity may make that a more sensible option.

The searchers may like it as well. This especially applies to those that are searching for information instead of goods and services. People who want to know more about how to grow a lush lawn are not always looking for fertilizer.

Source: Pandia

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June 24, 2004

Ask Jeeves adds site preview tool

Search portal Ask Jeeves expands its Smart Search capabilities and adds site preview tool called Binoculars, making it easier and faster for users to find information.

The company has expanded its Smart Search features, which enable users to conduct more effective searches by helping narrow, broaden or more directly answer user queries.

Smart Search uses Ask Jeeves' combination of everyday language and structured-data search technologies.

Ask Jeeves' also introduced Binoculars, a patent-pending site preview tool, currently in beta launch, which enables users to preview their search results before clicking through to visit the end pages themselves.

The company said that a study conducted by VeriTest, a unit of Lionbridge Technologies Inc., concluded that Binoculars reduced the number of clicks required to find relevant results by 50-70 percent per search.

Source: Click Z

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June 23, 2004

Wanadoo not clearly identifying sponsored links

French ISP Wanadoo argued before the UK's Advertising Standards Authority that all sponsored links at its web site were clearly identified as being delivered by Overture, by a link at the foot of each sponsored search result.

Freeserve plc has been told by an advertising watchdog that search results on its web site, now re-branded as Wanadoo, must clearly identify sponsored links following a complaint that its rankings are based on the sums paid to search advertising company Overture, not relevance.

Clicking the Overture link would open a window with the following text:

-- "Overture ranks its Advertiser Listings based on the amount the Websites bid, with the highest bid amount at the top of the search listings. Websites pay Overture the amount shown on next to the Advertiser Listing, when a user clicks through to their Website."

The ISP said the sponsored results were all checked manually for relevance to the search criteria and the most relevant results always appeared first. It argued that because advertisers had to pay each time a consumer clicked on their search entry, it was in their interests to appear only in relevant search results.

A visit to reveals that Singers Outdoor bid up to 30 pence per click-through, eBay 26 pence and 25 pence.

The ISP said it did not believe its web site was misleading or its search results were less relevant because they showed sponsored links first. It said it would add a link to its search page that consumers could use to find more information about how its search engine service worked and how results were ranked.

But it seems that this promise was insufficient for the ASA, which became involved following a complaint from the head of web design firm “I contacted the ASA on behalf of all our small business clients”, said Managing Director, Andrew Ellam.

“Since they pay less than a hundred pounds to get their website, they can’t afford to spend hundreds on advertising - and they shouldn’t have to," he continued. "Consumers are likely to be fooled into thinking these adverts are unbiased search results, and small businesses who should appear in the listings are suffering”.

The ASA noted that each sponsored link on Freeserve's site had a hyperlink to an explanatory pop-up box and sponsored links were identified by the Overture hyperlink.

However, because sponsored links were not clearly identified by a headline or title, and the search page did not contain an explanation of the purpose of the hyperlink, it considered that consumers were unlikely to realise that the Overture hyperlink indicated that results were sponsored and concluded that "consumers could be misled."

It asked the ISP to ensure that sponsored links were clearly identified in future.

This follows the CAP Code, the ASA's rule book, which states that "marketing communications" should be "designed and presented in such a way that it is clear that they are marketing communications". Another rules states that marketers "should make clear that advertisement features are advertisements, for example by heading them 'advertisement feature'."

The ruling is a clear endorsement of Google's approach: Overture's biggest rival clearly marks all 'sponsored links' in search results as such.

This UK ruling will likely be of less concern to Overture itself. Its biggest search partner is its parent company, Yahoo!, and a search on Yahoo!'s UK site already separates 'Sponsored Results' from 'Web Results'.

While the ASA ruling is in the name of Freeserve plc, the brand launched by High Street retailer Dixons, the ISP was re-branded as Wanadoo in April. Wanadoo, part of France Telecom, bought Freeserve for £1.6 billion in December 2000. The complaint to the UK's Advertising Standards Authority was made two months before the re-branding.

A spokesperson for Wanadoo told OUT-LAW.COM that the company is looking into today's ruling "with interest" but that the company has no further comment at this time.

ASA spokesperson Donna Mitchell said consumers "need to know when advertising is advertising" and warned that today's ruling applies to the industry as a whole. "Anyone who doesn't currently clearly identify their sponsored links should do so now," she said.

Andrew Ellam said he has contacted the ASA about a number of other UK search engines and asked it to issue UK guidelines to correspond with those in the US, where the Federal Trade Commission demands that search sites make ‘clear and conspicuous disclosure’ when advertisers have paid to appear in their results.

Ellam said that a check of the UK's top 20 search sites indicates that 13 may have similar problems to Wanadoo.

Source: Out

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June 14, 2004

A rebirth of Internet advertising

Is online advertising undergoing a rebirth? Some might argue it is, first spurred by paid search advertising, then contextual ads and adware placements.

Now, there is another new game in town, if the buzz-o-meter is any indication. While not altogether new, behavioral advertising is getting more play than ever, perhaps because it’s now being married with every marketer’s favorite word: targeting.

Is behavioral targeting really all that? Let’s take a closer look.

The Process
One basic premise in marketing is that to more effectively sell your product or service, you should understand how your customers’ minds work. What do they like to see? What do they want to hear? What do they like to do? And can you determine these things with as little time and money as possible? Now there are technologies that *can* easily establish these answers quickly and effectively to give you an at-a-glance picture of behavioral targeting to these consumers.

Behavioral targeting technologies work by anonymously monitoring and tracking the content read and sites visted by a designated unique user or IP as that user surfs the Internet.

This is done by serving tracking codes, which are implemented as cookies, on a user’s computer as s/he is served ads from various online advertising networks. Sites visited, content viewed, and length of visit are then all databased and analyzed to predict an online behavioral pattern for such a user, thereby classifying that user by his/her online demographic. Behavioral ad networks then serve targeted advertising related to that user’s behavioral classification, regardless of where s/he then visit.

For example, if a computer user frequents sites such as SlashDot, Maxim Online, Wired, and Men’s Health, behavioral targeting would classify such a user as a male, with interest in technology.

When behavioral targeting advertising companies such as Tacoda or 24/7 serves ads on such sites, their ads place behavior targeting cookies on the user’s computer.

Then, if that same user later visits a site with ads served by these networks, an advertisement might be served for shaving cream or even a tech job site (especially if the user is reading the news online during regular work hours). If that user becomes target to a behavioral advertising, he may be served a series of the same ad campaign across various sites, all without his awareness of the targeting going on around him.

The Players
Companies like Tacoda Systems, Claria, Revenue Science and Kanoodle - 24/7 provide advertisers with behavioral targeting technologies (a.k.a. “audience management systems") that pinpoint the actions that users are likely to make in the future based on recent behaviors.

Founded in 2001, Tacoda has the ability to collect audience data from existing data sources (ad servers, email databases, etc.) and then merge that information with subscription, contest and registration data. These profiles contain both demographic and audience site behaviors to provide marketers with a picture of a site’s audience.

Claria publishes advertising messages for various companies and ad agencies to consumers who are part of its GAIN Network of 43 million consumers who agree to receive advertising based on their actual online behavior.

Revenue Science, boasting no upfront costs for publishers, provides its own Audience Search analytics system. A publisher can simply type in specific words from an advertiser’s RFP and have delivered to them precise audience segments. The technology then allows the marketer to drill down and build customized audiences.

Kanoodle and 24/7 Media have partnered to put a new spin on behavioral advertising via sponsored text ads. Dubbed BehaviorTarget, the service will be the first behaviorally targeted sponsored text links network.

Case Studies
According to some recent studies, behavior-based ads are faring much better than content-placed ads. TM Advertising of Dallas recently ran an ad campaign for American Airlines that included rint, radio, TV and online placements on 14 various sites, including a behavioral targeting test on the Wall Street Journal Online. The specific goal was to “increase brand awareness and reach the maximum number of audience members likely to have a live interest in making business travel plans in the near future.”

Working with Revenue Science, TM Advertising was able to determine what pages visitors to the site were reading and what they were reading, as well. From there, a database-targeting system was employed to narrow visitors into different user-groups. The system then tagged these unique visitors to see what activities they were engaging in.

The results of this behavioral targeting proved to be quite dramatic. When compared with the basic web ads, the behavior ads were seen by 115 percent more business travelers making at least one trip a year. The targeted consumers also scored three percent higher than the average viewers in brand awareness.

Another case study involving Snapple and iVillage had a positive outcome. Rather than placing its Snapple-A-Day meal replacement drink ads on the iVillage dieting/fitness pages, Snapple implemented Tacoda Systems’ tracking technology to determine who had visited that channel in the past 45 days.

These users were then followed and received the Snapple ads while visiting ALL pages of Dynamic Logic, an independent research company, concluded that these specific visitors scored higher for key brand metrics than others who saw the same ads within the dieting/fitness channel.

Because behavioral marketing enables advertisers to more easily determine and then postulate about user preferences and purchasing habits, the advertiser is able to treat each prospect more as an individual than an advertising collective. If, in the long, the buyer is unobtrusively being sold on a particular product/service run and the seller profits as a result, behavioral targeting may be a benefit to all.

Source: Search Engine Journal

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Domain name registrations hits record

According to a report released by VeriSign, more than 4.7 million new domain names were registered during the first quarter of 2004. That's the highest quarterly figure for new domain registrations in the history of the Internet.

In total, more than 63 million domain names are now been registered, approximately one for every 100 people in the world today. This number is greater than at any time in the Internet's history, surpassing even the heights that were seen during the Internet "bubble."

Perhaps even more important than raw numbers, VeriSign data reveals that the current base of domain names is being utilized more actively than ever before, as measured by renewal rates, look-up rates and the percentage of domain names tied to live sites.

A high rate of new registrations, as well as growing stability and utilization of existing domains, are strong indicators of overall Internet vitality.

Highlights of VeriSign's "Domain Name Industry Brief" point to increased growth, utilization and globalization:

1) New registrations, renewal rates and the number of domain names under registration, all set records in the first quarter of 2004.

2) At 21% growth over the first quarter of 2003, total domain name registrations passed 63 million in Q1.

3) 72% of today's domain names now link to a Web site, up from 55% in December 2002.

4) Total domain name resolutions for .com and .net reached an average of 11 billion a day in the first quarter (indicating that the speculative purchase of domain names that fueled much of the growth in the late nineties has been replaced by real Web sites and e-mail boxes that real people are using).

5) Country Code Top Level Domains (ccTLDs) account for a growing portion of overall domain names, and currently represent 40% of all domain names registered in the world.

6) The majority of ccTLDs are registered in Europe, including .de (Germany) and .uk (United Kingdom), which account for 12% and 8%, respectively, of all domains registered in the world.

"Though North America has the highest number of Internet users as a percentage of its population—some 55%—increasing Internet traffic is a reflection of a fast growing group of Internet users around the world," said Rusty Lewis, VeriSign EVP.

"For instance, 223 million people in Asia and 173 million people in Europe currently use the Internet on a regular basis, compared with around 175 million in North America. But, those Internet users represent only 6% and 22%, respectively, of the total populations of Asia and Europe."

The Web may not be worldwide yet, but give it time. It is still growing. In fact, it may be growing faster than ever.


Posted by nakul at 11:19 AM | Comments (2) | TrackBack

May 13, 2004

Google's AdSense now to provide banner ads

Since yesterday, on Google's Web site, there is a description of it's modified AdSense program, which now allows advertisers to publish image, or banner ads on third-party Web sites that participate in this revenue-sharing program.

Google's AdSense program promises to place ads on Web pages that are relevant to a marketer's message, based on an analysis of the page's content.

Search giant Google plans for the first time to sell ads that include images, a surprise reversal for a company that has won regard for its pioneering use of text-only marketing pitches and for keeping its home page religiously free of banner advertising.

The posting noted that Google will not put image ads on its own site for now, but the company said it looks "forward to offering more image ad distribution options in the future."

The image ad program was launched late Wednesday in a beta, or test, version, said Tim Armstrong, Google's vice president of advertising sales. He said the decision to wade into banners came after nine months of interviews with Web surfers, publishers and advertisers, and was based on what he called Google's core mission.

"The noise in the advertising market is really going up over ROI (return on investment)," he said. "There was a pretty clear signal from advertisers that there is an opportunity to use Google's relevance technology for images as well as text. Over the last 14 months, we've been able to grow a network of content publishers (that use AdSense), and the message was to make it more useful."

In just a few years, Google has grown from a start-up to an Internet giant, thanks in large part to an advertising program modeled on the ground-breaking efforts of Yahoo's Overture Services division. Both companies auction search keywords to the highest bidder and ask customers to pay only when Web surfers click on advertisements.

So far, these pitches have steered clear of designs incorporating images, which have been deemed a distraction that would likely diminish the Web surfer's experience. Although it's not clear whether image ads will be coming to Google's own site any time soon, the company is poised to put them to its first test, potentially opening the door for wider use.

The move puts Google more firmly into the camp of Internet advertising network providers such as DoubleClick, a company that came to define intrusive Web advertising during the dot-com boom.

Using attention-grabbing methods could help make up for shortfalls in Google's relevance technology, which has not proved to be as clear a winner on ordinary Web pages as its has alongside lists of its search results. Google's Armstrong declined to discuss response rates for AdSense, saying that the company is continuing to innovate to improve relevance and return on investment for its advertisers.

In a list of frequently asked questions describing the new program, Google said it would offer four layouts of varying sizes: leaderboard, banner, skyscraper and medium rectangle. The image ads will be limited to 50KB--much larger than the typical 1KB to 2KB used by text-only ads. Nevertheless, Google said the limit will ensure that the images have a minimal effect on load time for most sites.

Armstrong added that Google will include a "user bar" along the bottom of its image ads displaying the addresses of the sites the ads link to, a feedback button to let people send messages about an ad directly to Google, and an "Ad by Google" label.

Google is looking to expand its advertising programs as it prepares for an initial public offering that could value the company at more than $25 billion.

The company has already gone well past its bread-and-butter AdWords search engine advertising program.

In recent weeks, Google has reversed a policy restricting the sale of trademarked terms to non-trademark holders and has begun testing a system for automatically matching ads to little-used keywords.

Sales from U.S. search engine marketing will reach $2.1 billion in 2004, up from $1.6 billion last year, according to Jupiter Research. By 2008, sales are expected to hit $4.3 billion.

According to a securities filing, Google generated $961.9 million in revenue in fiscal 2003 and posted $105.6 million in net profit. That marked the third consecutive year of profit for the Web's most popular search engine. During the most recent quarter, which ended March 31, Google collected $389.6 million in revenue and posted a $64 million profit.

Google's image ad program was noted Wednesday by Search Engine Journal, an online newsletter.

"There has been some questions about whether Google is getting away from (our) core business, and I feel that we're not," Armstrong said. "The thought from four years ago was to come up with a way to create better relevancy for ads. We've done that with text ads, and that's how we've come to this."

Source: C-Net News

Posted by nakul at 11:17 AM | Comments (0) | TrackBack

May 12, 2004

BlogPulse search engine launched by Intelliseek

BlogPulse is a new online search and tracking tool that measures and ranks “buzz” about key issues, people, phrases and links that occur daily in more than a million Internet blogs.

Blog is short for “weblog,” a type of self-published diary, journal or daily log that represents one of the fastest growing areas of published content on the Internet. serves as a useful and entertaining research tool for Internet users, consumers, the media, observers, risk and reputation managers, pundits, politicians – anyone interested in tracking issues, personalities, trends and rumors that are circulating on the Internet, often before they hit mainstream media.

BlogPulse is built on Intelliseek technologies that specialize in Internet search, machine-learning and natural language processing, and the analysis of the types of unstructured data found in online word-of-mouth behavior, or consumer-generated media.

And with content updated and ranked daily, can be used by bloggers to determine which blogs attract and generate the most traffic and to gauge interest in their own blogs.

Intelliseek developed and launched BlogPulse as an outgrowth of the company’s expertise in locating and analyzing unstructured data and consumer-generated media for marketing and business intelligence.

“BlogPulse is Intelliseek’s contribution toward new sets of tools that identify and measure what’s happening in the public’s mind, society, the marketplace and on the Internet,” says Mahendra Vora, Intelliseek CEO.

“Bloggers are a progressive, influential and opinionated group, and their important insights can serve as harbingers of what’s on the minds of the public, consumers, voters – any individual or group that’s active on the Internet.”

The BlogPulse home page offers:

* Links to each day’s key trends, phrases, people and links – updated daily.

* A search engine to find specific information in blogs.

* A showcase search tool that graphically charts and compares key issues, trends, people and phrases over time.

* A BlogPulse blog that mixes editorial content and trend-mining tools toprovide interesting tidbits to site visitors.

BlogPulse joins the list of Blog Search Engines and Directories, which are redefining the way some search the Internet for trends and news items.

Source: Search Engine Journal

Posted by nakul at 07:44 AM | Comments (0) | TrackBack