Last week I wrote: Ask.com should stop spending $100M per year in ads and buy up new search companies, then once bloggers began to increasingly criticize its ad strategy (and thus put the company in the spotlight), I asked maybe I owed them an apology, after all, it encourages folks like yours truly and many others online to put forth what Ask.com should be stressing. I doubt the thinkers at Crispin Porter Bogusky actually planned it that way, but welcome to marketing: where you get paid regardless and someone will find a way to suggest you’re brilliant.
Anyway, today the New York Times talks about how more and more people are still launching search-based startups, and how backers like Sequoia - who invested in both Yahoo! and Google - are still open to suggestions.
Engines like Hakia, Accoona and Powerset are trying to grab market share by writing a more sophisticated algorithm. A growing number of entrepreneurs are placing their bets, however, on a hybrid system that puts humans back into the search equation. They are grouped under a newly coined rubric, “social search,” and it is becoming a crowded field.
Newcomers like Squidoo, Sproose and NosyJoe offer search results based on submissions or votes by users. Bessed also relies on users to suggest the best Web pages for a topic, but then has editors refine them. ChaCha gives customers the opportunity to have an online chat with a human being who can provide search assistance.
Sometimes a small variation on an existing idea is enough to make it stand out. In October 2006, when Bessed began its search service with the manually edited results pages, it had only two editors and covered just a few hundred search terms suggested randomly by users.
Last month, another company, Mahalo (Hawaiian for “thank you”), inaugurated a search service with manually edited results. It started with several advantages: venture capital backing, 30 editors, systematic focus on the most commonly requested search terms, and the added idea of supplying Google’s search results for any search not covered by its own best-of-the-best lists.
Mahalo will run into challenges, but much like YouTube, Sequoia’s already planned its exit wisely.
The article references (even though the online version does not link to!) Don Dodge’s post where he suggested that 1% market share translates to $1B. I wrote a follow up saying that that is actually not true for laggards, though search is lucrative enough to create winners out of losers.
Just this past week, Business.com - who has been on the auction block for a couple months but yet to find a buyer - whispered its financials to the market in the hope of finding a suitor, at a $300-400M price range. Photobucket did the same thing, via the same method, and ultimately sold on the low end of the desired $300-400M asking price, when News Corp. paid roughly $250M plus an earn-out of $50M for the Denver-based photosharing site.
I think Ask.com - after selling to InterActive Corp. for $1.85B in January 2005 - is now worth $3.15B. This NYT article only reiterates the notion that if Ask.com stopped advertising tomorrow and bought a bunch of search engines, it would be money better spent.
I don’t want to pretend that I’m the first or only person who’s suggested this, but trust me, not enough people are. Ask.com’s market share has fallen, and I’d be hard pressed to find many people who have turned to Ask.com as a result of their marketing.
Disclaimer: Our sister site, MetaMojo.com, runs two search products: a domain specific, contextual vertical search network and a video meta search engine. As well, I own shares in Yahoo!, Google’s main competitor.
I make that [first] disclaimer in the middle of the post, because I think that for the odd search query, any search engine can be better than Google. Our MetaMojo.com is very strong in health, travel, entertainment, etc. Take for example our result for Barcelona versus that of Google’s. But the problem is in the context of who can be relevant in search, the quality of the search result is secondary to the distribution the results will get. We boost search queries by growing the overall ad traffic on the Mojo Supreme network. Many of these search engines might die, not because their algorithm or results are weak and ineffective, but rather, because they will fail to get the search market’s equivalent of oxygen: traffic and distribution.
But once you have traffic, as does IAC, then you better ensure that your search is up to snuff.
Remember this week Terry Semel resigned from Yahoo!, one of this cardinal sins, say critics, was not buying Google for $1B early on. I doubt any one of the engines NYT mentions is the “next Google,” but I wonder how many of them $100M would buy.
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