GoTo Speaks Out on FTC Complaint

At last month’s On Line Advertising Forum,’s CEO Ted Meisel fired back at the complaint filed with the Federal Trade Commission (FTC) over paid listings on some search engines. His many comments included both right and wrong points.

The crux of Meisel’s argument is that users don’t care whether results are labeled: Put labels on them, and many users will ignore them; they’ll mainly judge a search engine based on whether its results are relevant and fulfill their search request.

This is absolutely true, but that doesn’t negate the need to have disclosure in some way. Some users do care, and these users deserve to have disclosure as a feature of a search engine — in the same way that other features may be offered, even if only a small percentage of visitors make use of them.

Meisel also argued that most search results are influenced by payment one way or another, and he’s absolutely right. There is no level playing field when it comes to search, nor has there ever been one. As with the traditional media, those who understand search engine “PR” may get better placement in results.

These PR specialists are certainly not paying for coverage in the “editorial” columns of search engines, nor are they guaranteed to get it, but the work they do can have an impact.

However, the point Meisel overlooked is that even though PR can play a role, at most major search engines editorial results are still supposed to be substantially different from the paid listings. There’s no free reign as there is in the advertising area. There is a supposition of editorial criteria, which the search engines that wish to position themselves as more than Web yellow pages are supposed to protect. One way to protect is clear disclosure, for those who want it.

Meisel was also right that the best way to solve the problem isn’t by involving the government, but his solution was the wrong one: “Rather than get government involved, the right way is, if someone thinks they have a competitive search product, let them market it and let consumers decide,” he was quoted as saying (in a Dow Jones article about his speech).

The correct solution would be for the industry itself to solve the problem. Why not simply use clearer words to describe when paid content appears? For instance, let’s look at Lycos, one of the search engines named in the FTC complaint, for a search for “anti virus software.”

First we are shown “Featured Listings,” which are simply paid ad links from GoTo. Next, we are shown “Popular” Web sites and are even given a short explanation of what these are: “3 Web sites reviewed by Lycos Editors match your search.” Unfortunately, that’s not true. The first numbered listing may have been chosen by an editor, but the second two are simply more paid listings from GoTo. There’s nothing “popular” or editor-selected about them.

Lycos also has a help page all about its search results, called “What are the various Search Results Page sections?” It makes no mention of what “Featured Listings” are for those who might care, nor any mention that paid ad links might appear at all.

MSN Search is another search engine named in the FTC complaint, but it is making a corrective move. Unlike Lycos, MSN Search has disclosed for some time within its help pages exactly what constitutes its “Featured Sites.” In fact, last year it even had an “About” link that appeared next to the “Featured Sites” heading to bring up its disclosure statement.

MSN Search dropped that link because almost no one selected it, the service says. However, it announced at the Search Engine Strategies conference last month that the link would be restored. Indeed, it’s now live, and selecting it reveals plenty of disclosure and explanation.

GoTo could be part of the solution by insisting that its partners use certain words or provide better disclosure, at the very least through their help pages. The company hasn’t done this in the past, saying the exact wording used is an interface issue for its partners. Of course, making such a push might not be well received by those partners, so GoTo probably believes that it is taking the wisest course from a business standpoint.

That may be wise for GoTo, but it is not for its major partners. “To label paid or not paid is not helpful,” the article about Meisel’s speech concludes. Well, it certainly would have been helpful to the several services named in the complaint. Had they provided better labeling, they wouldn’t have garnered the negative publicity that continues to be generated.

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