Search Engine Executive Roundtable, Part 2

How do the search engines view search marketing firms? What are the growth drivers of the industry? And is the search “bubble” going to pop soon? Danny Sullivan continues his discussion with four top search executives.

A special report from the San Jose Search Engine Strategies Conference, August 2004.

On the panel were Gerry Campbell, vice president and general manager of AOL Search and Navigation; Paul Gardi, senior VP of operations and strategic planning, Ask Jeeves; Christopher Payne, VP, MSN Search; and Jeff Weiner, senior VP of search and marketplace, Yahoo.

In part one of this series, these executives talked about the key differentiators of their respective services, strategies for pleasing searchers, and a discussion of important verticals.

The Search Marketer: Friend or Foe?

Danny posed the question everyone in the audience was waiting for: “How do you view search engine marketing firms?”

Ask Jeeves’ Gardi was tactful, noting the search engine has two constituents. Users are paramount, but the company also sends traffic to advertisers or publishers — the people who pay the bills. “If we create the right experience on the page, we can help to increase the conversions or help the user target the right information,” he noted.

This means Ask Jeeves acknowledges the importance of search engine marketing (SEM) firms. “When you look at the good side of SEM, we actually support that,” he said. “We very much support people optimizing as long as they’re ranking for the right reasons and not the wrong reasons.”

Yahoo’s Weiner was similarly tactful. “Bad, irrelevant results are the enemy, not [SEMs],” he said, noting Yahoo still considers feeds and content that can be refreshed regularly via its paid inclusion program a good thing.

AOL’s Campbell was more blunt. “I don’t think SEM is a bad thing — I think it’s one of the best things that’s ever happened, because now we don’t sit around and figure out who pays who.”

Best and Least Recognized Features

Danny asked each panelist to describe their companies’ best, and least recognized, search feature.

“I think the feature [most people] don’t recognize is that AOL has search,” said Campbell. He praised AOL’s “walled garden” characteristics. “We do all of this stuff, and it’s locked into the client,” he said. “It’s the payoff — they get exactly what they’re looking for.”

Ask Jeeves’ Gardi said, “The feature that we like best is one that no one knows is there. Our feature is the unfeature — it’s smart search.” He was referring to specialized results Ask Jeeves’ provides for certain types of queries. “Rather than asking people to find the answer, we need to know what they’re looking for and give it to them,” he said.

Weiner cited Yahoo shortcuts as a relatively obscure but helpful feature. His favorite feature is the related “also try” search suggestions appearing at the top of result pages, “which is essentially a query helper or a narrower.”

MSN’s Payne offered something surprising as his favorite: Microsoft’s newly acquired Lookout tool. “It creates a local index of your email and lets you search your email just as you would the Web,” he said, offering a tantalizing hint on what may come with Microsoft’s long-rumored integrated search initiatives.

Importance of Paid Listings

Danny turned the discussion to search advertising as the driver of industry revenues. “How important is it to have control of paid listings in-house?” he queried.

MSN’s Payne dodged the question, saying it’s “important to have a comprehensive package — a direct connection with users.” But he added, “Our partnership with Yahoo is important as well,” deflecting the unstated question of whether MSN will develop its own sponsored listings program to replace Overture’s listings at some future point.

Yahoo’s Weiner said, “What’s nice about owning the technology is that for the consumer, the entire page of results is a package.” He stressed the importance of relevance in paid listings. “We want the advertising to be the same quality as the algorithmic results,” he said. He added that by owning both paid listings and organic search technologies, Yahoo can leverage algorithmic technology into paid listings to improve the overall experience.

“Paid listings actually [provide] very good information,” said Ask Jeeves’ Gardi. “We want to have a mix of products.” He noted the company recently extended its relationship with Google for several more years but also builds its own products.

A Search Bubble?

In a nod to the Google IPO mania at the conference, Danny asked, “Is the search bubble going to pop? What are the growth drivers of the industry?”

MSN’s Payne believes the most important thing all search services can do is “increase supply” and get users to search more often. The way to do that is to make the search engine a more useful tool. Payne predicts CPC advertising prices will continue to rise, at least for the next year, so this really isn’t a bubble similar to the dot-com boom of the late ’90s.

Yahoo’s Weiner thinks search has just scratched the surface and there’s still room for tremendous growth. “As search becomes more essential, we’re going to be seeing more traffic,” he said. Yahoo believes the invisible Web is huge, comprising over 100 billion digitized documents. Uncovering this information and making it searchable should help stimulate demand.

He also cited the search advertising circle. As merchants become more sophisticated with search advertising and return on investment goes up, they can in turn spend more of those profits on advertising.

Ask Jeeves’ Gardi echoed the sentiment that search is just starting to reach critical mass. He said improvements in understanding user needs and behavior, combined with search advertisers using analytics, portend a complete shift in the nature of the advertising landscape.

Gardi also noted search is unique because, unlike traditional media, you can measure advertising effectiveness.

Whither Google?

Danny asked: “What impact will you see from Google’s IPO?”

“I don’t think it will affect the industry to a great extent,” said MSN’s Payne. The only significant change will be to give better “optics” into what’s happening in the business.

Ask Jeeves’ Gardi thinks the IPO would bring more visibility and credibility to the industry.

Yahoo’s Weiner said, “We wish them well and welcome to the publicly-traded-company life… It’s a very different experience.”

Those Surprising Searchers

Danny next asked, “What surprises you most about searchers?”

MSN’s Payne said it’s the sheer diversity of what people look for. Examining query logs is often a surprising and humbling experience. “Wow — we don’t know these folks very well,” he said.

Ask Jeeves’ Gardi: “It’s still very interesting to us that searchers are unique.”

Yahoo’s Weiner, in a thinly veiled swipe at Google, said what surprised him most was “the number of people who use the search box to navigate the Internet rather than to find information.” He mentioned what he called the gap between perception and reality of search result quality at the various services. “I think if you stripped off brand, you’d be surprised at what you see.”

In all, a lively and informative panel. The most inspiring takeaway, consistently echoed by all the panelists, was how young the industry is and how much room is left for growth.

“Search is still only a tiny part of people’s lives,” said Gardi. “It’s going to be a much bigger part of their lives going forward. It’s going to be everywhere.”

Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.

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