Business.com Hops on Paid Listings Bandwagon

  |  November 16, 2001   |  Comments

Wooed by the promise of new profits, Business.com follows Yahoo!'s lead and begins selling featured listings in its search engine.

Paid search engine listings continues to gain in popularity, as B2B directory Business.com becomes the latest to take the plunge.

The Santa Monica, Calif. site -- which has principally relied on banner and sponsorship advertising -- only recently started charging for inclusion in its site directory and search engine. Now, the company said it would go one further to upsell the 400,000 businesses listed in its directory, offering them "featured listings," which are separate, higher, and thus more visible than the regular listings.

The listings include both search engine keywords and specific categories in its directory. Because the 25,000 categories on the site range from the general ("pharmaceuticals and biotechnology") to the extremely targeted ("mass spectrometry") the company believes it can find ample inventory and command high prices.

Naturally, the model calls to mind that of the leader in the space, Overture, formerly known as GoTo.com. Unlike Overture, Business.com doesn't sell by keyword (the company sells category listings, which include a set number of pre-defined keywords), nor does it allow users to input their own listings text -- which is written by the site's editors.

Business.com also said it doesn't plan to sell the featured listings on a cost-per-click basis, as Overture does, but rather on a monthly fee. (Typically, inclusion in the site's listings cost $25 to $500 per month, which Jake said equates typically to a $0.90 cost-per-click.) And unlike Overture, featured listings spots are doled out on a first-come, first-serve basis, rather than an auction model, though Chief Executive Officer Jake Winebaum said that might change.

Still, the site does have at least one crucial element in common with the industry leader: syndication. Just as Overture syndicates its search engine listings to AOL Time Warner, AltaVista and Terra Lycos, Business.com is also lining up several publishing affiliates -- including MarketWatch.com, Pearson Group's FT.com, and Primedia.

Business.com is aiming to make its listings business into a network play, as Overture has done successfully. MarketWatch, for instance, integrates the listings into its site for a cut of the sales revenue (potentially on a cost-per-click basis, Winebaum said). Business.com, meanwhile, can charge its businesses higher fees because of the added exposure.

Additionally, publishers themselves can sell the listings to advertisers, adding to their revenue.

"We've been a search engine and directory focused exclusively on business since we launched almost two years ago," Winebaum said. "Typically the way we made money was contextual banners, sponsorship tiles, and some in-line ads ... We realized that we created such a clean interface and such a fast, efficient search engine, that that 98 percent of traffic off the site was through people clicking in listings," rather than banners.

"The concept was delivering phenomenal value to businesses by providing these listings and having users click on them and go to their site," he added. "That's where we figured we should charge, and move the monetization from banners to the listings themselves."

While Business.com might be one of the newest to roll out a paid search engine listings product, it certainly won't be the last. None other than Web giant Yahoo is planning to begin selling search engine listings, starting with a six-month trial program with Overture.

With Overture turning its first profit last quarter, the model to many looks like a relative safe haven amid the widespread problems in online advertising. Indeed, Yahoo executives say their company is sold on the model as a way to help the site veer away from traditional online advertising revenues.

That's clearly a major testament to the model's efficacy, especially since it comes in spite of the harsh criticism weathered by GoTo.com when it debuted its pay-for-placement search engine in 1997. In fact, during Yahoo's annual meeting with Wall Street analysts this week, chief executive Terry Semel said that by not moving to monetize search engine listings earlier, Yahoo had "left money on the table for years."

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