This Month's Column By New Media Age Editor Mike Nutley
The story of the year in new media so far has undoubtedly been search. First Yahoo! bought Inktomi in a deal worth £149m. Then Google sent the chatrooms buzzing with its purchase of Blogger. Next Overture stunned the sector with its £89m purchase of Alta Vista. Google responded by announcing deals to provide BT Openworld and NTLworld with search results, which Overture topped with its £64m purchase of FAST. And in the background Lycos laid down its marker with the launch of the latest version of its PictureSearch tool in the UK.
So the search wars are heating up and the battlefield is backfill, the results that come after the advertiser-sponsored results and make up the vast majority of search listings. As Google has grown and begun adding commercial listings to its offering, it has put increasing pressure on the likes of Overture. Because while Google can provide the world's favourite search as backfill, pay-for-performance search companies have relied on the likes of FAST, Inktomi and Alta Vista. Now Overture has responded to that pressure by buying two companies which it says will help it create "the next generation of Web search". The two companies Google and Overture, may have started from opposing positions, but they are now fighting over exactly the same ground.
Three things make this interesting outside the search community. The first is that search is still one of the most popular activities on the Web, and having the most powerful search engine is seen as giving a significant edge to a portal. Second is the network of deals that both companies have done with portal partners as they have grown. Many of these are now in question following the recent spate of deals, for example Inktomi's deal to provide search to MSN, one of its new owner's arch rivals. At the same time, as the search companies have grown, their portal partners have come to regard them with suspicion, seeing them as media companies in waiting and therefore as a potential threat. After all, if search is the second most popular activity on the Internet, the owners of the most powerful search engine brand has a powerful draw to its site, a draw on which no-one has yet capitalised.
But the third factor, and probably the most important, is the possibility for the whole picture to change incredibly quickly. Talking to Christoph Mohn, CEO of Lycos Europe, last week, he made the point that there is no brand loyalty in the search market. Just consider, he said, how quickly Google took over as the search engine of choice, and purely through word-of-mouth. Lycos' own experience bears this out. When it launched its new PictureSearch, which Mohn claims is the best on the market, in Germany recently, search numbers went up by 30% within a matter of days.
Lycos is attempting to introduce brand loyalty to the sector by bringing search within its "communitainment" concept, but it's far too early to say whether this will succeed. In the meantime the shake-out that started in January has transformed the search sector into a high-stakes, high-risk game that will have profound implications for the portal sector too.
Michael Nutley, Editor, New Media Age, http://www.nma.co.uk/