Snap Gets Into Search Game

Idealab founder Bill Gross just unveiled the latest entry in the search arena: Snap.com.

“We built Snap to save you time. We think we can cut the time it takes to find what you’re really looking for in half,” said Gross in the site’s blog. No stranger to paid search, Gross was an Overture co-founder.

The site, which launched Tuesday, is both a general search and a shopping engine. It returns general search results from LookSmart, Gigablast, the Open Directory project and Snap’s own database of sites. Product search is driven by comparative shopping engine Smarter.com, founded by fellow Overture alumni. Advertisers wishing to promote specific products would do so through Smarter.com.

Payment models for advertisers go well beyond the usual cost-per-click (CPC) to include other cost-per-action models. Advertisers can elect to pay based on completed transactions, such as a sale, download, referral or new customers gained.

“A cost-per-action model provides a great user experience. It aligns the interests of advertisers with those of the users,” said Tom McGovern, CEO of Perfect Market Technologies, the Idealab company behind the Snap service.

Other search results are sorted by a “Snap Rank,” an algorithm that looks at user satisfaction, site popularity data, and the amount advertisers pay. (Paid listings are identified with a “paid result” label.) The greatest factor weighed in the ranking process is user satisfaction. User satisfaction is, in turn, most heavily influenced by the conversion rate — a measurement of sales, downloads, or leads generated as a result of clickthroughs to a site.

“Conversion rate to us is the most important metric to present to a search user,” McGovern said. “The beauty of conversion rate is that it takes all of the other things into account that a human goes through in assessing the relevance of a listing to a keyword. The price of the goods, architecture of the site, the return policy, the in-stock position — all of the things a human goes through when they’re looking at an e-commerce site to decide if they’re going to buy or not.”

While many advertisers may balk at putting their conversion rate out there for all to see, McGovern sees a parallel with paid search. He notes that when Idealab started GoTo (now Yahoo’s Overture) in 1998, people looked at that model and thought it was going to ruin search, but today it is widely accepted.

“We think this approach will provide great user benefit, and in time it will provide full alignment of the interests of advertisers with users. If you want to have a risk-free way of advertising, and only pay when you get business, you need to provide that information to the search engine and we’ll publish that,” he said.

Since Snap.com doesn’t get conversion data from non-advertisers, it’s possible a paid listing could get a better rank, just because the search engine has more information about that merchant. Other benefits available only to advertisers are the ability to edit the listing and tailor the message that shows up in the search results page; to include an action button in the listing, like a “buy it now” link; and to upload product images in addition to their company logo.

The Web site popularity information is gleaned from clickstream data from a network of 1 million users whose online movements have been tracked anonymously since January. This data comes from log files licensed from select ISPs, with all personally identifiable information removed. Snap.com processes the several terabytes of data in the files to identify patterns of user behavior after a search.

“We’ve created a ’library of intentions,’ which we use to tailor our search results,” McGovern said. “We use the data about what other people are doing when they search to make our results more relevant.”

Popularity of a given listing, the site it links to, and the number of pages viewed by visitors once they arrive there, are all factors that affect search result rankings. Results can then be sorted or filtered by one or more of these values using technology licensed from Idealab’s X1 Technologies.

Idealab has a history of innovation in the search arena. It launched Overture, then called GoTo, in 1998. Overture, of course, was snapped up by Yahoo in July 2003 for $1.6 billion. Idealab also holds search technology provider X1 Technologies and search/social networking site Insiderpages.com in its stable of startups.

The Snap.com URL has a dot-com history of its own. The name was used for a joint venture between CNET and NBC, which went out of business in 2001. The only connection with that site is the domain name, which Perfect Market Technologies bought earlier this year.