These have been laying around in my building’s lobby for a couple of months now. How nostalgic…
Month: May 2006
The Portal Dilemma
Yahoo just announced its entry into the tech publishing world with the launch of Yahoo Tech. Coverage by Mike Arrington, NY Times and John Battelle.
As I mentioned in this post, the big portals (Google, Yahoo and soon MSN) are powering the ad platforms of many media companies while at the same time creating their own competing content.
Here is what’s really going on:
Yahoo and Google get 100% of the revenues on each click happening on their pages, but only about 20-30% of that same click taking place on a publisher page (via Google AdSense or Yahoo’s YPN). So a user on a Yahoo/Google page is worth to them about 4-5x what the same user does on a partner publisher page.
The dilemma therefore is not really much of a dilemma at all – A portal will always strive in the long run to create its own content and attract as many users directly to it, and away from its partner publishers.
By powering the ad sales on other media companies via AdSense/YPN, the portals are leeching on these assets to grow their own advertiser base to be used on their content pages, like Yahoo Tech.
At the end of the game (as I described in this post), the portal stays with the traffic and the advertisers, while the publisher stays with declining traffic and no advertisers.
So when choosing a partner for powering a content-targeted ad network, the first question a publisher should ask is: Am I being leeched by a portal that wants to take away my business?
If the answer is ‘yes’ (or even if it’s ‘no'[1]), you should be looking at independent non-competing companies like Quigo (disclosure: I’m founder and employee of Quigo), IndustryBrains, etc.
[1] If Google or Yahoo ain’t competing with your content or service today, take my word on it – they will! The 5x dilemma just makes it such a non-brainer for them over time to compete on content and services and attract the users over to their pages, even if they spend all their time denying this.
And now to the funnies…
This morning’s joke is brought to you by Google (via NYTimes):
…The new browser [IE7] includes a search box in the upper-right corner that is typically set up to send users to Microsoft’s MSN search service. Google contends that this puts Microsoft in a position to unfairly grab Web traffic and advertising dollars from its competitors.
…"The market favors open choice for search, and companies should compete for users based on the quality of their search services," said Marissa Mayer, the vice president for search products at Google. "We don’t think it’s right for Microsoft to just set the default to MSN. We believe users should choose."
WTF?! Marissa must be kidding! When I install Firefox on my computer, I get Google as the default browser search box, Google as the default home page and now Google Toolbar as the only embedded toolbar.
Instead of complaining about the MSN search box being embedded into IE7, Marissa should send Microsoft a big bouquet of flowers with a thank you note, saying how much they appreciate MS for sitting on their asses for so many years, not releasing a tiny IE patch adding MSN search by default and in the process letting Google become the biggest internet company in the world.
Google also goes on handing MS some good product advice on how it should design IE (lessons learned, I assume, from the Google’ized Firefox…):
The best way to handle the search box, Google asserts, would be to give users a choice when they first start up Internet Explorer 7. It says that could be done by asking the user to either type in the name of their favorite search engine or choose from a handful of the most popular services, using a simple drop-down menu next to the search box.
So lets clear this one up – Google is suggesting that Microsoft use its last real asset in the search war which it has practically lost (13.2% market share and declining) and hand it away to Google so that it can, in essence, become a monopoly. Lets get real about this – the embedded MSN search box is not going to make MSN the leading search… In MSN’s rosiest dreams it may level the market a little and create a more competitive landscape between the big three engines. So having the market leader (Google) accuse a small and insignificant player (MSN) in exercising monopolistic behavior, is ridiculous and almost outrageous. It seems like Google is being evil here and building upon the bad connotation of the name Microsoft being associated to monopolistic behavior in very different cases.
BTW, Google will probably claim that the fact that MSN is the underdog in search is irrelevant, proof being how it came back from similar market share and killed Netscape. That is bullshit for many reasons[1], but primarily for this one:
A search engine is not a browser in one fundamental way: A browser is
not something you easily swap, and is definitely not something you can
use concurrently with another browser or within another browser. So in essence a browser is
somewhat of a binary thing – you either use this one or that one at any given moment, making it practically a zero sum game[2]. So if one player figured out how to ‘force’ users to use its browser, those users would come directly out of the other’s pool of users.
A search engine on the other hand is traditionally a website accessed via a browser, and that’s how most of the users have come to know it and use it. So even if MS placed 20 MSN search boxes on IE7, users still can, and will, use IE7 to access Google.com via the address bar. This, therefore, is not a zero sum game, and having one player add functionality to a browser does not prevent users from using the other player’s service within that same browser.
If MS were to block the site Google.com from appearing within the browser, or would re-route requests for Google.com back to the MSN search engine, that would be using the browser in an unfair way. Google’s current claims are simply ludicrous.
Before wrapping up this post – Microsoft, playing the side kick in this comic article, added the following punchline:
Microsoft insists it has no intention of deploying its browser as a weapon in the search wars.
Oh yeah. If I’ve ever seen a weapon in the search wars, this is it.
More coverage by Don Dodge
[1] A couple more reasosn why Google aint Netscape and why browsers aint search engines:
- Google is generating billions of $’s a year and taking over huge markets (yellow pages, classifieds, news, etc) while Netscape was at the end of the day a fairly wimpy company with close to no revenues. Netscape caused its own demise as much as MS inflicted it upon them.
- Firefox is living proof that product quality can be as powerful as product bundling, and Internet Explorer simply became a better product than the stagnant Netscape at some point in the past.
- Google is a pretty big bundler on its own right (Google Pack, Google Toolbar + Desktop Search, Firefox + Google Toolbar, etc, etc) so it seems like bundling is a game Google is fairly content with as it relates to its own business…
[2] Sure – you can have more than one browser installed and used on a computer, but a) extremely few people actually use more than one browser, and b) you cannot use 2 browsers concurrently (in the real time sense of it). It’s either-or at any given moment.