Wednesday 16 July 2003
Corporate Idiocy
There’s No There Here Long ago, I built websites for a living. In the early days of the commercial web, it was a mess. Nearly every company insisted on a recorded ‘welcome message’ from the CEO, and they all wanted total control of the user. ‘Can we make it do that people can’t save the file? So they can’t print anything? So they can’t cut and paste?’ As it turns out, we could — simply by following the clients’ instructions and making the websites so useless, so boring, so control-focused that nobody in their right mind would ever want to read them, much less save, print, or copy them. I don’t think this is what they had in mind, though. Another familiar feature of the mid-1990s commercial web landscape was what a lot of people called a ‘virtual mall’. The idea behind this was that you’d put all these online ‘storefronts’ in ‘one place’ and thus drive more ‘shoppers’ through the ‘stores’. Putting a store in a real-world mall is possibly the single best thing you can do to increase sales, they said, so the same thing must be true of the web. Of course, this is idiotic; on the Internet, everything is in the same place, more or less. in the early 1990s, networkMCI even ran a series of TV ads featuring Anna Paquin talking about networking, in the most abstract sense imaginable. One of them had the line: “There will be no more there. We will all only be here.” (Click on the image to pop up a 944KB Quicktime movie.) These ads look kind of cheesy now, but it has to be remembered that, at the time, almost nobody had heard the term ‘information superhighway’, or ‘Internet’. These ads were one of the first hints that the broader public ever had that anything new was going on in telecommunications; they were fantastic. And they showed that MCI clearly had some idea of what the future would bring. At the same time, of course, another MCI was running a ‘virtual mall’ called marketplaceMCI. They seeing see not; and hearing they hear not, neither do they understand. The virtual mall died out, and eventually so did MCI for all intents and purposes. Today, MCI is a brand name for those parts of Worldcom that haven’t been seized by creditors, and a ‘virtual mall’ is something you encounter on the never-updated website of a small-time ISP — if that. The people who, in 1995, insisted that there was anything to be gained by serving as a ‘virtual mall’, or ‘portal’, or one of any number of similar silly things, have been proven wrong. That didn’t stop Yahoo from paying $1.63 billion this week for Overture, a company whose specialty is selling the ability to jigger search results. The way a normal search engine, like Google, works is that it tries to find the document that most closely matches your search request. That is, if you type “Tinotopia MCI” into Google, it’ll come up with the document you’re reading now (assuming it has indexed this document). This is presumably what you’re looking for, and it’s trying to make you happy. What Overture does, or did, is offer people that amount to advertisers the ability to influence the results of your search, for a price. So if you search for “Tinotopia MCI”, your top result might be an offer from MCI to sell you long distance. If you actually perform this search on Google, you’ll see a link to www.mci.com at the top of the page. MCI has paid Google so that every search with the string ‘MCI’ in it gets a link to MCI at the very top. If you search Overture for the same thing, you get paid links interspersed with the actual results of the search. You’ll also notice that you get a lot more results, many of which having absolutely nothing at all to do with what you searched for. This is why you’ve almost certainly used Google in the past, and why you’ve almost certainly never used Overture’s search engine. And this is what Yahoo paid $1.63 billion for. In this story (subscription required), the Wall Street Journal said that this acquisition is the result of Google’s ever-growing dominance of the search-engine market.
But the very reason that Google succeeds is that it doesn’t do this — or it doesn’t do it much, anyway. And if they did, fewer people would use Google, and they would lose this capability anyway. When someone types “Tinotopia MCI” into a search engine, it’s a good bet that they’re looking for something Tino has had to say about MCI. They’re not looking for a long-distance plan, they’re not looking for an RFC, they’re looking for piping hot Tino goodness. If you offer reliable, accurate, helpful results to people’s explicit requests, as Google does, you’ll have the chance to sell them something on the side. There isn’t any there here; were the search engine technology perfect, and were your knowledge of how to search for what you wanted perfect, there would be absolutely no advantage to buying placement in the search results: the best possible match for what you wanted would already be at the top. Accepting payment from someone to boost their web page’s rank in search results means, at least theoretically, returning lower-quality results to the user. The idea behind this is that the search engine is a ‘place’ that a lot of people pass through, and that selling placement there is something like selling ads in a subway station. Unfortunately, the search engine isn’t a place like a subway station — there is no place online, no there or here — it’s a service, more like the entire subway system. Selling placement is less like selling ads in a station and more like selling the right to drive rolling billboards down the tracks. The billboards might get the attention of a lot of people at first, but since the billboards would displace trains, more people would take the bus, or drive, or walk, and the rolling-billboard concession would lose its value. Amazon went through a period where a search for, say “A Tale of Two Cities” on their site would produce all kinds of highly dubious results for cookware, toys, electronics, and Snoop Doggy Dogg albums before anything about Charles Dickens showed up. The thinking was, I suppose, that you were probably looking for a book, and would scroll down if necessary to find it in the search results. While you were scrolling, Amazon would have the opportunity to sell you some pots and pans. It was a tiny inconvenience, but it put me off using Amazon for a while; and I can’t have been the only person. And since Amazon no longer does this, so maybe they noticed. Yahoo used to be my first stop when I was looking for most things on the web. It didn’t work for a lot of really esoteric topics, but if you were looking for something basic, like an online version of the King James Bible, or the Declaration of Independence, or a list of all the newspapers in Montana, it was an excellent resource. It consisted of a human-built hierarchical index of the web, and you could count on it to have links to authoritative sources on most general-interest topics. Then Yahoo decided they needed to make money. This isn’t a bad thing, but the problem is that they decided to make money in the hierarchical-web-index business and semi-related rackets, and they decided to make a lot of money. Before long, the Yahoo index started to go downhill; in the name of cost-cutting, they weren’t pruning dead sites from it, and they weren’t adding new sites unless they either were too big to ignore, or paid to be included. Yahoo’s web index very quickly ceased to be valuable, and I haven’t used it in a couple of years now. Yahoo is now mainly about personals ads, free e-mail, auctions, fantasy baseball, and advertising, and less about searching. If Yahoo’s purchase of Overture is anything to go by, it’s going to get even less about searching. Google has the power to, as the Journal puts it, “steer web users to anyone with a product to sell or advertise” because it doesn’t steer people. If you have a key to the bank vault, you have to opportunity to steal a lot of money. This is why the bank only gives the key to people that it considers very trustworthy. The people at Google understand this; they make a bit of money by selling some very subtle advertising on search results, but they understand that the search results are what attract the eyeballs that they’re able to sell access to in the first place. If they accepted payment from advertisers in return for damaging the value of their product to users, fewer users would use the system, and the advertising would become less valuable. They’d then have to do more harm to the product in order to sell even more advertising, which would result in even fewer users, etc., etc., etc. On their site, they tout the integrity of their search:
Google’s position isn’t unassailable — there’s no brand loyalty with search engines — and they may yet be swept off their perch should someone come up with better technology or a more complete index. They’re not at risk from Yahoo any time soon, though, because Yahoo is still partying like it’s 1995. Posted by tino at 23:28 16.07.03This entry's TrackBack URL::
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Yahoo is buying Overture for $1.6 billion in cash and stock. Yahoo has been run up to 114 x earnings, which is ludicrous for a company that is obviously getting it’s ass kicked in the market place. I fail to see how this acquisition can possibly help Yahoo regain their former fame and dignity, but they probably will get Overture very cheaply…as long as their stock stays up until the deal closes. Posted by: Nicole at July 18, 2003 09:00 PM |