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Search Engine Executive Roundtable, Part 2

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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, SVP of Operations and Strategic Planning, Ask Jeeves, Christopher Payne, VP, MSN Search, and Jeff Weiner, Senior Vice President of Search and Marketplace, Yahoo

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

SEM/SEOs: Friend or Foe?

Danny put the question that everyone in the audience was waiting for: "How do you view search engine marketing firms?"

Ask Jeeves' Gardi was tactful, noting that the search engine had two constituents. Users are paramount, but the company is also sending 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 said.

This means that Ask Jeeves acknowledges the importance of search marketing 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 that Yahoo still considers feeds and content that can be refreshed regularly via its paid inclusion program as a good thing.

By contrast, AOL's Campbell was 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 company's best search feature and least recognized feature.

"I think the feature [most people” don't recognize is that AOL has search," said Campbell. He also praised AOL's "gated neighborhood" 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."

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 said, referring to the specialized results 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 a surprising feature 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.

The importance of paid listings

Danny next turned the discussion to search advertising as the driver of revenues for the industry. "How important is it to have control of paid listings in house?" he asked.

MSN's Payne dodged the question, saying that it was "important to have a comprehensive package -- a direct connection with users," but then added "and our partnership with Yahoo is important as well," deflecting the unstated question of whether MSN developing its own sponsored listings program to replace Overture listings at some point down the road.

Yahoo's Weiner said, "What's nice about owning the technology is that for the consumer the entire page of a 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 also said that by owning both paid listings and organic search technologies, Yahoo is able to leverage algorithmic technology into paid listings to improve the overall experience.

Ask Jeeves' Gardi said, "Paid listings actually [provide” very good information. We want to have a mix of products." Gardi noted that the company recently extended its relationship with Google for several more years, but is also building its own products.

A search bubble?

In a nod toward the Google IPO mania that was swirling around the conference, Danny asked: "Is the search bubble going to pop? What are the growth drivers of the industry?"

MSN's Payne said that the most important thing all search services could do was to "increase supply," getting users to search more often. The way to do that is to make the search engine a more useful tool. Payne predicted that cost-per-click advertising prices will continue to go up, at least for the next year, so we really aren't in a bubble similar to the dotcom boom of the late 1990s.

Yahoo's Weiner said we've just scratched the surface with search, and that there's still room for tremendous growth. "As search becomes more essential, we're going to be seeing more traffic," he said. Weiner said that Yahoo believes the invisible web is huge, made up of more than 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 their ROI 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 that the 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 that search is unique because you can measure the effectiveness of advertising, something can't do with television or billboard advertising.

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 said he thought the IPO would bring more visibility and credibility to the industry.

Yahoo's Weiner said, "We wish them well and welcome to the public traded company life... It's a veeryyy different experience..."

Those surprising searchers

Danny next asked, "What surprises you most about searchers?"

MSN's Payne said it was the sheer diversity in what people are looking for. Examining query logs is often a surprising and humbling experience. "Wow -- we don't know these folks very well," he said.

Gardi's Jeeves: "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 also said he was surprised at what he called the gap between perception and reality of the quality of search results 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 take away, which was 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 Ask Jeeves' Gardi. "It's going to be a much bigger part of their lives going forward. It's going to be everywhere."

Want to discuss or comment on this article? Join the Search Execs Discuss the State of the Industry discussion in the Search Engine Watch Forums.

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