There have been some strange partnerships in the world of search, but last month's deal between Ask Jeeves and Google was surely one of the most unexpected. From September, the three year deal will see Ask Jeeves carrying paid listings from Google on its search properties, including Ask Jeeves-owned Teoma.com, which the company has positioned as a Google killer.
"We had lots of different people saying, 'How could you do this with Google'," said Steve Berkowitz, president of Ask Jeeves Web Properties. "This is just one small space on our site, and this is the best product."
In short, Ask is not backing away from its plans to build Teoma into a crawler-based search engine to match if not beat Google. That's the "big" space on both the Ask Jeeves and Teoma sites and, importantly, in the results from Teoma that Ask Jeeves wants to distribute to other players. The company thinks if it can focus on making that big space great, then partners will choose Teoma to power their results.
Of course, those partners will expect to earn money by carrying Teoma, which is where paid listings come in. Ask wants to provide what I call an "all-in-one" search solution, one where you get both quality editorial results and paid listings combined. Teoma gives Ask the editorial portion plus some associated revenue through paid inclusion. However, Ask still needs to have paid placement listings to accompany Teoma's results.
What's wrong with getting them from Overture, which is Ask's current partner? Overture apparently wanted restrictions on the partners Ask Jeeves could approach with a combined product. In contrast, Google was willing to give Ask Jeeves free rein.
"Google's business model is, 'Ive got a great site with traffic and by the way, what I do on my site can be syndicated'," said Berkowitz.
That flexibility was essential for Ask Jeeves, since it sees syndicating its combined product as a key part of the company's future. It was a major edge for Google to win over Overture.
"The ability to go out to small and mid-tier sites is an opportunity for us," said Berkowitz. "We wanted to make sure we didnt shut any doors on ourselves."
Ask Jeeves also found that through its testing, Google seemed to deliver superior paid listings for long queries while Overture did better for short, general ones. That was another reason to go with Google.
"Given the fact that we have longer queries, dramatically longer queries, Google looked like it would be the best product on our site," Berkowitz said.
As for the Google weakness in the shorter queries, it's something Ask Jeeves thinks will be corrected in the long term.
"Google may be behind today, but what company has proved over time that they can improve their technology?" Berkowitz said. "Both products would have been great, but the upside for us in the long term was looking at how both companies will improve."
Google's strength with longer queries is also important because being able to deliver relevant ads on long queries is a sign you may have fewer pages without ads and thus potentially more revenue.
Consider someone who has a hotel in New York. It might immediately occur to them to bid on the term "new york hotels," and plenty do. Overture has over 40 paid listings for that term, while Google has at least eight filling all available slots. But what happens if someone searches for "new york hotels near central park?"
At Overture, only those who bid on that exact term will appear -- and not all advertisers may have thought of this. Indeed, not one paid ad comes up for that term. But at Google, all the ad spots are still filled. That's because Google makes it very easy for advertisers to "broad" match, to come up when someone uses only some of your key terms, not all of them.
"The goal for everyone is to increase their coverage as well as relevancy," said Berkowitz. "Both companies are striving to get the broadest coverage with the most targeted queries," he said of Google and Overture.
Berkowitz wouldn't comment on the deal's specifics, but there's the suggestion that the Google deal was more lucrative than what Overture was offering.
"Overtures been in the business for three years. They are a more mature company in that sense," Berkowitz said. "So when it comes to what portion of the revenue you are going to get, Google needs to come to the table with more."
The deal is valued by both companies to earn at least $100 million over the next three years, and while Berkowitz won't say exactly how much Ask Jeeves will be getting, he did characterize Ask Jeeves as getting the "lion's share" of revenue.
Google's paid listings will replace those from Overture that currently appear under the "You may find these sponsored links helpful" heading at Ask Jeeves and the "Sponsored Results" heading at Teoma. The "You may find my search results helpful" listings at Ask Jeeves are powered by Teoma.
The "Click Ask below for your answers" area at the top of the page continues to come from Ask Jeeves editors, in most cases. In a change, some human-powered results may also now appear in the "You may find these options useful" section at the bottom of the page.
Previously, this section had "meta search" results, but Ask has now dropped them due to low clickthrough rates, Berkowitz said. Such results have been on the service since it launched back in early 1997. However, there's no loss to the user now that they are gone, because over the past year or so, the results from this section typically were only from paid listing search engines. The traditional meta search value had long been abandoned.
Dropping that section also helps bring Ask Jeeves more in line with the recent FTC guidelines on paid listing disclosures. The company has also changed the area where its own limited internally-sold paid listings appear. That section now says "You may find this featured sponsor helpful" rather than "You may find this featured listing helpful," bringing it further in line. Ask also now discloses that paid inclusion happens within the Teoma-powered portion of its results.
Paid listings as Ask Jeeves UK continue to be powered by Espotting and appear at the top of the "Pick a website from the list below" section, after which editorial listings from Teoma follow in that area, if there is room. Meta search functionality also continues to be present at Ask Jeeves UK, though three of the five sources are paid listings search engines.
Google AdWords Select
Ads from Google will be from this program.
When Search Engines Play 'Axis and Allies'
SiliconAlley.internet.com, July 26, 2002
More thoughts on coopetition in the search world, though I've never seen About.com as a search-oriented site and so don't view the recent alliance between the company and LookSmart as competitors getting together.
Overture shrs lose over 12 pct on loss of Ask Jeeves
Reuters, July 19, 2002
Overture says that it will survive without Ask Jeeves, with an analyst comment that Ask brought Overture no more than $10 to $15 million in annual revenue.
Ask Jeeves reports Q2 loss, higher revenues
Reuters, July 18, 2002
Ask Jeeves reported an $8.5 million loss last quarter, compared with a loss of $21 million for the same time the year before. The company expects a pro forma profit by the fourth quarter of this year.
Ask Jeeves Toolbar
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