Archive for the ‘ISM Signposts’ Category

*** Growing Pains ***

Ask is owned by IAC, which is currently battling to disentangle itself from its majority voting shareholder, Liberty Media Corp. If the breakup goes ahead, Ask will become IAC’s flagship brand, meaning all eyes will be on the success of its new strategy.

+++ Search me +++

My Mahalo launch

My Mahalo, the new social search engine, is attempting to build a bridge between social networks and search. The beta service enables users to import ratings and reviews from other social media sites and share them with their contacts on Mahalo Social, similar to Yahoo’s delicious.

When users search on Mahalo, they will be presented with content first from their friends, followed by the most trusted Mahalo users. So a search for the film Fargo will show you how many of your friends have seen the movie, how many want to see it, how many reviewed it.

Instead of having to visit several social media sites to find the various comments, ratings, reviews and other content your friends have created, Mahalo users can see all of that information in one place, if their friends have imported their data into Mahalo.

Users who have installed the Mahalo toolbar will be asked when they visit another social media site whether or not they’d like to import their content from those sites to Mahalo. Mahalo users build trust by recommending links, and by having those links accepted by the Mahalo guides and added to a page. At launch, My Mahalo will feature five types of content: places & trips, products, music, movies and books.

My Mahalo is part of Mahalo.com, the human-powered search engine that was launched last year by Jason McCabe Calacanis, former founder and CEO of Weblogs, sold to AOL in 2005.

The opinions expressed are those of the Editor and not necessarily those of ISM Ltd.

All material Copyright 2008 ISM Ltd. All rights reserved.

*** Wooing Yahoo ***

*** Hanging on the phone ***

*** Video star soars ***

—————————————————–

+++ Wooing Yahoo +++

Yahoo rejects Microsoft deal and desperately seeks alternatives

Microsoft continues to circle Yahoo, hoping to push through a $42.1bn bid for the company, as News Corp, AT&T, AOL and Google consider all options to prevent the deal.

Yahoo has already rejected the offer saying it ‘substantially undervalues’ the portal. However, Microsoft insisted its offer was ‘full and fair.’ Yahoo is making a concerted effort to keep the software giant at bay. Yahoo’s CEO Jerry Yang wants the company to remain independent. It is talking to Google, News Corp and even AOL in an attempt to stall the deal. If nothing else, Yahoo may succeed in extracting a higher price from Microsoft.

It’s a potential deal with News Corp which may be Yahoo’s best chance. News Corp would swap ownership of MySpace and other online properties with a 20% stake in Yahoo, according to speculation.

Yahoo has also held separate discussions with Google about outsourcing its search-advertising business in return for a majority of the revenue, which analysts predict would boost Yahoo’s cash flow. But Google’s enthusiasm appears to have waned.

Microsoft seems confident that the deal will be done. It has responded to outraged cries of competition that a combination of Yahoo and Microsoft would in fact create a more competitive marketplace and a robust competitor for Google. Google is probably most concerned about the combined force of Yahoo and Microsoft in areas like instant messaging and web email.

However, integrating two companies the size of Yahoo and Microsoft will be a mammoth task. Microsoft CEO Steve Ballmer has already stated that blending the companies’ two ad systems would be the first priority, in the hope that an integrated version of the two systems might compete better with Google’s technologies. He estimates that the merger could result in as much as $1 billion in cost savings.

Microsoft’s bid is an attempt to replicate the same kind of broad influence the software company has over most PCs to the web. Hostile takeover bids are not widely regarded as best practice in Silicon Valley. But with just a few weeks to go until the March 13 deadline when Microsoft can step up its efforts, the outbreak of a takeover tussle seems likely. Microsoft’s willingness to engage in such a bloody battle suggests two things. First, that Microsoft is more interested in Yahoo’s brand and customers than its underlying technology and people. And second, that Microsoft really, really wants to beat Google.

+++ Hanging on the phone +++

Mobile search builds momentum

The battle to become the de-facto provider of mobile search rumbles on. Yahoo is faring well with oneSearch, suggesting that success in PC search doesn’t necessarily equate with success in mobile search.

Yahoo has secured a partnership with T-Mobile to be its mobile search provider, replacing Google. The deal will make Yahoo’s oneSearch service available to T-Mobile’s customers in 11 European countries. T-Mobile has the option to bring the service to its US operation, though no decision has yet been made. T-Mobile said it will continue to feature Google products like YouTube and Gmail.

Since introducing oneSearch at the beginning of last year, Yahoo has signed partnerships with over 29 mobile operators including Telefonica and AT&T, covering more than 600 million mobile subscribers worldwide.

Meanwhile, Google is growing in confidence that it can generate significant revenues from mobile following the announcement that it had seen 50 times more searches on Apple’s iPhone than any other mobile handset. Google said that if other handset manufacturers follow Apple’s lead to make web access easy, mobile search could overtake internet search within a few years.

+++ Video star soars +++

Google tests video ads

Google has been making strides to capitalise on its $1.65bn acquisition of YouTube 18 months ago. It has begun testing video ads on its search pages and, in a separate move, has launched a new technology that embeds ads into online video. The two-fold strategy represents the search engine’s most ambitious attempt yet to capitalise on the growth of online video.

The video ad testing on Google’s search pages follows the launch of its new universal search last year, a format which mixes videos and news stories with standard text links to web pages. Google has said that the more visual ads suit the new search pages better, as text ads were getting lost within search results that include images and video.

The video ads will not be immediately obvious to the consumer. Ads will signal they have videos using a small plus icon, which will lead to the pop-up of a small video player. Google is considering adding small thumbnail photos to the video as well.

At the moment, advertisers do not have to pay extra to feed video into their ads. What’s different is that advertisers pay when a user clicks to watch their video, even if they never click through to the advertiser’s site. This slight change in strategy suggests that Google sees itself playing a role as a channel that can build brands as well as drive sales.

Meanwhile, new advertising technology enables publishers to incorporate text ads into online video. The Google video ads will take one of two forms: banner ads, which will run at the top of the video screen and over lay ads, which will be inserted on top of videos as they play. The ads will be selected based on the video’s content and the pages where they appear.

As Google works hard to embed video into its business, watch online video soar onwards and upwards.

The opinions expressed are those of the Editor and not necessarily those of ISM Ltd.

All material Copyright 2008 ISM Ltd. All rights reserved.

ENDS

*** Don’t Ask ***

*** Opening Doors ***

*** Searching for Knowledge ***

*** Lessons from South Korea ***

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+++ Don’t Ask +++

Ask.com erases user’s history

Ask.com, the fourth largest search engine formerly known as Ask Jeeves, has launched AskEraser, which it says will throw away what you’ve searched for. As concerns over user privacy and the rich data assembled by search engines on consumer’s surfing patterns rumbles on, Ask is hoping that privacy will differentiate it from stiff competition.

Search engines like Google, Yahoo and MSN keep track of search terms and link them to a computer’s Internet address and sometimes to the user, but when AskEraser is turned on, it will discard all this information. Unlike other privacy controls which can be tricky to locate on a search engine, Ask’s new service is purposefully easy to find on the home page and can be turned on with a single click.

However, AskEraser cannot guarantee complete anonymity of its users. Ask.com relies on Google to serve the ads next to its search results, which means its user’s digital footprints are passed onto the larger search engine. However, Google is constrained in what it can do with the information.

The search engines are working hard to reassure consumers that they respect their privacy. They insist that they need to keep records of searches to improve the quality of results. However, following increased pressure from privacy groups they now limit the time they retain user data. Google and Microsoft make search logs anonymous or discard them after 18 months and Yahoo does the same after 13 months.

Ask.com currently has a much smaller share of search compared to competition, just 4.7% in the US compared to Google’s 58.5%. Will AskEraser’s promise of privacy become a compelling selling point for internet users?

+++ Opening Doors +++

Yahoo backs open standard

Yahoo has pledged support for OpenID, a new web standard that enables users to consolidate their web identities and use one common log-in across websites. It means that anyone can use an existing Yahoo log-in and password to access other websites that have signed up with OpenID, reducing the number of username and passwords they need to remember.

Yahoo’s endorsement of OpenID is a significant boost for the new standard and has tripled the number of OpenID’s accounts to 368m. OpenID needed a big name like Yahoo to drive awareness and usage.

Yahoo raced to seize the initiative from Microsoft and Google as the search engine rails to improve its performance and declining market share in a competitive market. In other markets, Google has led open-standard initiatives such as OpenSocial for social networking and the Open Handset Alliance for mobiles.

The notion of data portability is growing in momentum. An open approach could change the very economics of the web itself as companies rush to build new services for the free flow of social information.

The DataPortability Workgroup has formed in the hope of persuading the internet industry to support a common scheme for importing and exporting personal information traditionally confined to individual websites. This month, Google and Facebook have both assigned representatives to join the workgroup.

Some analysts believe data portability will be the key trend of 2008. However, it’s difficult to say how meaningful change will be, as many websites, such as Facebook, will be reluctant to set their vast banks of social information free.

+++ Searching for knowledge +++

Wikipedia and Google step on each other’s toes

The lines between Wikipedia and Google are blurring, as both dabble with each other’s business models. As Wikipedia launches the alpha version of its search engine, Wikia Search; Google reveals plans to launch its own online encyclopaedia, Googlepedia.

Wikia Search is a social search engine that uses humans to help order its search results in an attempt to challenge Google’s dominance in search. Although other search engines like Chacha.com and Mahalo.com also use humans to compile search results, Wikia Search’s debut has been the most hyped.

Meanwhile, the details surrounding Googlepedia are still quite sketchy. Google intends to let people write a ‘knol’ , a ‘unit of knowledge’, even on the same subject as others, and take part in a Darwinian struggle to see theirs made the most popular. The Google blog says that knowing the author of an article will help users make better use of web content.

In contrast, Wikipedia’s model sees people contribute anonymously. Wikipedia also draws on expert content from anywhere online. This means that if good knols appear on Google, Wikipedia may feed off them, which will mean it will remain dominant. Has Google met its match?

+++ Lessons from South Korea +++

Korean search engine is world’s fifth-largest portal

Naver, the Korean search engine is so popular in its home market that it has become the world’s fifth largest portal, according to comScore, the US internet researcher. South Korea may be one of the most wired countries on earth, but it only has a nation of 48 million.

Naver, based on the English word ‘navigator’ has around 16m unique users a day and a total of 1bn page views. This means it dominates 77% of internet search in Korea, compared to Yahoo’s 4% and Google’s 2%, according to KoreanClick, a research company.

Knowledge in was launched out of necessity. In 1999, when Naver launched there was little, if any, Korean content on the web to make a search engine viable. Instead, Naver was forced to draw on the content from its users and put it online. Naver retains ownership of all the content and does not allow other search engines to access it.

Meanwhile, Naver is looking at expanding abroad. It will enter the Japanese search market in the first quarter of 2008, hoping to apply its winning formula there. Watch this space.

SIGNPOST is published monthly by Internet Search Management Ltd.

The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.

All material Copyright 2008 Internet Search Management Ltd. All rights reserved.

ENDS

www.isearchm.com

*** Blink ***

*** Ringing in the changes ***

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+++ In your face? +++

Facebook launches anticipated ad system

Facebook, the social networking site, has launched its much-anticipated advertising system, causing some consternation among privacy advocates. The new technology called Facebook Ads had been hyped as social networking’s equivalent of AdWords, Google’s keyword ad system.

Facebook Ads allows advertisers to build pages on the social network to promote brands and products. Facebook’s users can then list themselves as ‘fans’ of the brands they like. When these fans do something on the brand’s page like submit a product review or play a game, advertisers can pay to broadcast their friends a social ad or message.

Obviously, this advertising approach will be more effective for some brands than others. While Facebook users may be perfectly happy to endorse smoothies, for example, they’re less likely to join the ‘My Bank is Cool’ page.

Facebook seems aware of the potential risks of its new strategy. It is limiting the number of social ads that users can see to two per day. But how will its users feel about their voices and friends being used in a money-making scheme?

It is a separate technology called ‘Beacon’ that has alerted privacy critics. Beacon tracks purchases made by users on outside websites. For example, if you buy a book on Amazon, this could be broadcast to your Facebook friends. Similarly, an iphone ad could be shown to your friends alongside information that you’ve just bought one.

In response to privacy concerns, Facebook has said its users can choose not to share this information with their friends or limit the number of friends that this information is disclosed to.

An online political group, moveon.org has launched an online petition calling on Facebook to apply Beacon only to users who have specifically opted in to the system. ‘Petition:Facebook, stop invading my privacy!’ has nearly 2,000 Facebook users as members.

MoveOn.org Civic Action, a media-watchdog group, created a group on the Facebook site yesterday called, “Petition: Facebook, stop invading my privacy!” By November 25th, nearly 23,000 Facebook members had joined the group.

+++ Access all areas +++

Google launches social platform

As a growing number of internet users exchange their search engine home page for a Facebook or Myspace’s home page, Google has responded to the threat of social networking with the launch of OpenSocial.

OpenSocial is a piece of technology that enables developers to spread applications across any of the social networks, breaking down the barriers between social networking sites. Google eventually aims to create interfaces enabling users to share data and social connections without needing to belong to the same service as their friends. This astutely wrestles control and power away from the individual social networks like Facebook.

A handful of smaller social networking sites, notably including MySpace and Bebo, have joined the Google-led alliance. The new consortium has claimed members of over 200m internet users between then, compared to the 51m users of Facebook.

Interestingly, OpenSocial is not Google’s first foray into social networking, it also operates Orkut, a popular social network in Brazil and India.

The eventual vision behind OpenSocial is that internet users will ultimately be able to use their personal and social data on any internet service they wanted, while being able to communicate with their network from anywhere on the web.

+++ Blink +++

Video search comes of age

Blinkx, the aim-listed video search group spun off from Autonomy, has become the world’s largest video search engine with 4.2m daily searches of the 18m hours of online broadcast content it has indexed.

Blinkx says it has indexed an estimated two-thirds of the video available online and believes its technology, which analyses video and profiles customers according to their searches, makes it more relevant to advertisers than search engines based on ‘tagging.’

Deep-pocketed, disruptive Google has struck a powerful blow into the mobile industry with the announcement of its new mobile system, Android. It hopes it will encourage the masses to access the internet through their phones and bridge the conflict between different, conflicting handsets.

There has been speculation for some time that Google was planning to enter the mobile industry including rumours that it would be launching its own handset. However, Android is a mobile software system, rather than a Google handset. It will start appearing on phones next year and significantly has support from over 30 international companies including mobile phone networks such as T-Mobile and handset makers such as Motorola and South Korea’s HTC.

Android will be issued under an open source licence and made available free of charge to other companies to build their own handsets and applications.

It looks like Google is transplanting the model that shook up the internet to the mobile sector. In the long-term the plan could prove a disruptive force to the economics of the mobile industry. And it’s impressive that Google has managed to attract broad support from mobile industry players to its technology.

SIGNPOST is published monthly by Internet Search Management Ltd.

The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.

All material Copyright 2007 Internet Search Management Ltd. All rights reserved.

*** Search Me?

*** Location, Location, Location

—————————————————–

+++ On my radar +++

Social search for Web 3.0 launches

Radar Networks, a Silicon Valley start-up that sits halfway between Facebook and Google by combining social networking with intelligent search, is due to launch its first product, Twine.

Its founder Nova Spivack describes Twine as a “semantic graph” and says it will be one of the first examples of Web 3.0. Users will have their own home page, like Facebook where they can connect with friends and crucially create a ‘twine’ of information on something that interests them that could include text, images and video that the member creates themselves or pulls in.

The site’s underlying database allows Twine to interpret the information you put into it. It automatically categorises data, applying a set of relevant tags, following links to pull in related information. It’s like having a dedicated virtual librarian who can organise seemingly chaotic information into a useful structured form.

Like Google’s search engine, Twine provides a handy service to its users and then systematically harvests intelligence from those users to continuously improve the service.

Twine is founded on the concept of the semantic web, the idea that machines can be taught to understand the meaning of language. For example, a semantic web search engine would understand the difference between John F Kennedy the person, and John F Kennedy, the airport.

While Google provides relevant results to keyword searches, it doesn’t really understand what it’s being asked for. However, consumers have learnt to tailor their search habits to get the information they need.

Twine’s founder, Spivack has downplayed suggestions that Twine is a Google killer. He told one blogger: “Google’s mission is to organize the world’s information. And our mission is to organize your information. Your information is really the most important information in the world. It’s the other 90% of the information that Google isn’t indexing really. I think that Google is doing a wonderful job of crawling the web. And in fact it’s something that we plan to leverage. Certainly I don’t think that it would make a lot of sense for any company today to directly compete with Google. And in fact, there’s lots of opportunity in areas that Google isn’t really strong at. And this is one of them.”

Twine will launch to the general public early next year and is currently in private beta testing. No doubt, it will include search advertising opportunities and in the long term, Twine will tap into the site’s insight on its users to develop a custom advertising system for highly personalised ads and product recommendations. Watch this space.

+++ Face value +++

Although Facebook is yet to make any profits, its collection of detailed user information from hobbies, to favourite music and location could be used to place highly targeted advertising, a seductive opportunity for Microsoft.

Google and Microsoft were also keen to build a closer relationship with Facebook because it is increasingly being chosen as a home page by internet users, coming up automatically when they log on to their computers, something that has traditionally been a strong point for Google’s search page and Microsoft’s MSN.com.

The deal cements an existing relationship between the two companies that allows Microsoft to broker display ads on Facebook’s US site until 2011. Microsoft, as the “exclusive third-party advertising platform partner for Facebook” will now be able to sell ads on Facebook’s international sites.

However, the companies have not revealed if their partnership includes search advertising as well as display advertising. If not, Google and others could seek a separate deal to sell search advertising for Facebook.

Similarly, Facebook has not yet added a web search application to its interface, another opportunity that all the major search engines would want for themselves.

Inevitably, the deal has raised questions over whether Microsoft has overpaid for a piece of social networking action. Yahoo offered to buy Facebook for $1bn last year, but its takeover bid was rejected. However, Microsoft’s stake in Facebook represents a crucial morale-boosting victory for the company’s online unit, which has fought hard and lost against Google in a string of deals including AOL and DoubleClick and failed to keep up with Google’s search dominance.

Facebook will be using Microsoft’s cash injection to expand from around 300 employees today to 700 in a year’s time and invest in new services. Additionally, the social networking site is poised to launch a new advertising system of its own that enables advertisers to visit an automated website to place targeted ads on Facebook and other websites. (See Signpost 23).

Next month, Facebook is launching its first office into Europe in London, headed by Blake Chandlee, former commercial director, Yahoo. It is also working on translating its website into non-English languages.

Consumers don’t trust search advertising

Only 34% of consumers trust search advertising, according to a global study from Nielsen of over 26,000 internet users worldwide. Other online advertising such as brand websites or subscribed emails was more likely to be trusted with 60% consumers trusting brand websites and 49% trusting ‘emails I sign up for.’

However banner ads and text ads on mobiles were felt to be even less trustworthy. Just 26% consumers trusted banners and 18% trusted mobile text ads.

Unsurprisingly, consumer recommendation was deemed to be the most credible form of advertising, favoured by 78% of those surveyed. This was closely followed by newspaper ads (63%) and consumer opinions posted online (61%).

+++ Location, location, location +++

News International invests in property search

Rupert Murdoch’s News International, publisher of The Sun and The Times newspapers has invested in a new property search engine owned by Globrix, an unlisted company. Globrix is launching a property search engine modelled on a news aggregation business.

Other existing property search engines like Rightmove charge estate agents to market their houses online, but Globrix plans to adopt a similar model to Google by gathering together as many properties online as possible and making money through advertising.

The site will use “spider” search engine technology to guide customers to properties that fit their criteria. News International also owns 50% of a website called Propertyfinder. At least one other website, Zoomf.com, approaches searches in a similar way.

SIGNPOST is published monthly by Internet Search Management Ltd.

The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.

All material Copyright 2007 Internet Search Management Ltd. All rights reserved.

ENDS

www.isearchm.com

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+++ Growing Pains +++

Can Google guard its principles as it grows?

Google’s well-known internal motto, ‘Don’t be evil’, is being placed under increased strain as the search engine rapidly expands and moves into new markets. Its acquisition of online advertising outfit, DoubleClick has alerted consumer groups, antitrust regulators and competitors of the search engine’s newfound power and influence. Microsoft is feeling rattled and has reportedly hired PR firm Burson-Marsteller to drum up opposition to the deal.

Does the increasingly complex and broad nature of Google’s business force it to adapt and compromise its founding principles? Whispered complaints are getting louder that Google has, on one hand abused its users by invading their data privacy as well as adulterating search results with increased advertising, and on the other trampled over the interests of potential business partners.

Google’s founders are adamant their ideals will make a difference in the long term. They point out that in the past, big companies never proclaimed similar ethics, and that they can be a positive force.

However, its critics point out that Google’s ‘Don’t be Evil’ credo is oversimplistic in increasingly complex and difficult business situations. Google’s $1.65bn acquisition of YouTube has enraged copyright owners, while the DoubleClick acquisition has triggered a row over cookies. As Google grows by acquisition, the challenges multiply.

Google’s founder, Larry Page recently wrote a letter outlining how Google could interpret its ‘Don’t be Evil’ motto, originally enshrined in the Founders’ letter he wrote on Google’s stock market debut. Although it was only circulated around senior Google executives, he has spoken publicly around two examples that he believes show the search engine can stick to its principles.

First, is Google’s wholehearted support of open-source software. “We believe in openness, “he said. Second, Page insists that Google, “encourages staff to give a high revenue share to our partners,” when negotiating advertising deals. However, this claim is disputed by some of Google’s partners.

Interestingly, there are rumours that Google had first considered acquiring DoubleClick in 2005, but decided against it because DoubleClick’s practices did not fit in with its business principles. This time around, Google has said it is investigating new ways of using cookies that might lessen concerns about privacy.

Whatever happens, Google is undoubtedly struggling to marry the entrepreneurial ethics of an idealistic young start-up with the tangled, complex realities of running a large, global business.

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+++ Social Butterflies +++

The rise and rise of people search

Never was personal information so readily available. As Microsoft considers taking a 5% stake in Facebook that could value the social networking site at $10bn, Yahoo announces an advertising collaboration with Bebo, the British teen social networking site and a flock of people search engines has emerged. Earlier, Facebook opened up its social networking site by allowing its profile pages to be found by search engines.

While the buzz surrounding Facebook is reminiscent of the excitement surrounding Google before its 2004 IPO, the social network site needs to squeeze its advertising potential before it reaches the dizzy heights of Google and its lucrative AdWords.

Facebook’s existing revenue stream of sponsorships and banner ads do not take full advantage of the connections between the site’s users. Facebook’s founder Mark Zuckerberg has confirmed that his business is grappling with a new system that will allow advertisers to target ads based on information that users reveal about themselves on the site. It will probably be launched within the next six months. If successful, such a system could amount to the holy grail of social network advertising. But it would also raise concerns about privacy.

Zuckerberg is well aware that any new advertising system on Facebook, like Google’s AdWords, would need to work without alienating users. It’s a million dollar question. Facebook may have captured the world’s attention, but can it turn social connections into cash?

Meanwhile, a flock of people search engines are emerging to tap into the social network phenomenon. These include spock, wink, ziki, peekyou, zoominfo, pipl, rapleaf, naymz and wikiyou. Zoominfo is currently the leader in terms of traffic with around 1.3 million unique visitors a month and profiles on over 36 million people.

+++ The Next Frontier +++

The race is on to capture the mobile space

Google’s offerings, which include Gmail, YouTube, news, documents, search, maps and significantly location-based services through Google Earth are well-suited to the mobile space. Soon Google Earth will link up with the satellite positioning chips starting to be included in mobile phones.

However, the British mobile phone networks will not be happy if new entrants enter their dominion as they battle to protect their own walled gardens of revenue.

It’s easy to see why the internet search engines are keen to tap into the mass market of mobile. It’s an advertiser’s dream come true. While Google makes around £5.4bn in advertising from computers, of which there are only 260m shipped a year, more than one billion mobiles will be sold this year.

SIGNPOST is published monthly by Internet Search Management Ltd.

The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.

All material Copyright 2007 Internet Search Management Ltd. All rights reserved.

ENDS

www.isearchm.com

*** The right target

*** Flying high without a license

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+++ Getting personal +++

Facebook investigates ad targeting

Facebook wants to create an ad system that taps into the massive amount of information people reveal on the site about themselves. The social networking site aspires to achieve what Google did with AdWords by enabling ads to be placed next to search results by buying keywords online.

Tapping into people’s personal interests and connections and showing them relevant advertising has always been the promise of social networking (Signpost 21), but it has not yet been realised.

The new Facebook service would enable advertisers to select viewers of their ads based on a wide array of characteristics, not just age, gender and location but also favourite activities and music. Similarly, the ads would be visually different from the banners or boxed flyers that already feature on the site. Instead, they might be interspersed with items on the news feed, a popular page that provides a running list of updates of a users’ Facebook friends.

Facebook has already provided a similar limited service to advertisers, but the customisation of these campaigns has relied on a dedicated Facebook representative rather than an automated service. The new system would use automated technology instead and be a less labour intensive method of tapping into the site’s personal data.

Next year, Facebook hopes to expand the service using algorithms to learn how receptive a person might be to an ad based on information of the activities and interests of not just a user, but their friends. Facebook could then target ads even if a user hadn’t explicitly expressed interest in a given topic.

While Facebook had around 30.6 million visitors in July, it has not yet worked out a way to squeeze maximum profits from its huge user base. Facebook plans to stay independent and eventually go public, rather than be acquired by larger companies, so the company is under pressure to generate more revenues.

However, there are two big hurdles to Facebook’s commercial ambitions. First, Microsoft, which signed an ad deal with Facebook, is itself investigating how advertisers can place more targeted ads on the site. And second, Facebook users may not take kindly to being targeted by advertisers in such a precise way. While Facebook’s plan may give users an option to keep some information private, some users may rebel against the use of their information for corporate gain.

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+++ The right target +++

Yahoo banks on SmartAds

As Yahoo’s new chameleon display ad tools, SmartAds, gain momentum, observers are suggesting that they could combine the best of search and best of display advertising.

SmartAds change colour, image and message according to what Yahoo already knows about the web user. For example, a woman in Los Angeles who researched plane tickets to New York on Yahoo Travel could be shown an airline ad including a fare quote for flights there, a few days later.

In early tests when Yahoo was promoting Farechase, its own air-travel search engine, consumers clicked on SmartAds two to three times more often than on typical display ads. And an increase in ad efficiency typically leads to an increase in the price an advertiser is willing to pay. SmartAds’ advertisers provide Yahoo with sets of backgrounds, images and text that can be mixed and matched to create a number of different ads.

However, there is a danger than concerns of consumer online privacy could derail the rollout of SmartAds. Yahoo relies on heavy use of data about its visitors to target ads, including information users supply during registration, location data from their computers and insights from their online behaviour gleaned from keyword search history and their destinations on Yahoo. Yahoo has said that SmartAds balances user privacy and ad relevance appropriately.

The ability to target users based on interest and location brings the flexibility and direct-response that has fuelled the boom in search advertising. Yahoo is hoping SmartAds will help it gain ground in the expanding market for behaviourally targeted ads, which is expected to leap from $575m to $1bn in the US in 2008, according to eMarketer.

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+++ Flying high without a license +++

American Airlines sues Google

American Airlines (AA) is suing Google for selling keyword ads to its rivals triggered by AA’s own trademarks. The airline believes that the subsequent search results could confuse consumers and divert customers away from its own website.

A Google visitor who enters certain words or phrases that American Airline has trademarked, such as Aadvantage, will get links to AA’s website but also its rivals under ‘sponsored links’, targeted ads that appear alongside the regular search results.

SIGNPOST is published monthly by Internet Search Management Ltd.

The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.

All material Copyright 2007 Internet Search Management Ltd. All rights reserved.

ENDS

www.isearchm.com

*** On the face of it

—————————————————–

+++ Lord of the rings +++

Google develops search for mobiles

Google is developing a search service for mobiles in its quest to push more deeply into the one area where it is seen to lag behind rival Yahoo. Google’s new service will enable consumers to find and buy ringtones, games and other mobile content.

While Google already offers a mobile version of its search engine, its latest foray into the mobile world signals its desire to become a gateway for finding and paying for mobile content.

The new service will enable users to search for a ringtone, for example, and browse through a list of providers and links so they can buy the content. In time, Google plans to charge advertisers for higher placement in the search results, in the same way it offers sponsored links on computer web search.

Insiders have also suggested that Google is investigating a social networking element to the mobile service. For example, Google’s Gmail email users may be able to exchange content through their phones.

Google has been beefing up its presence on mobile phones for some time. In June, YouTube made a version of its video-sharing website available for Apple’s iPhone. Google is also testing a service that will broker ads for other mobile websites.

In a separate move, Google has linked up with a mobile phone operator to provide web search and tools for Sprint Nextel, the US next generation wireless network. The two companies will jointly offer the search and other tools through a new mobile portal and will share advertising revenues.

Global sales of music, video, ringtones and other content reached $27.4 billion last year, and are expected to grow to $59.3 billion by 2011, according to the Yankee Group. It looks like Google will become increasingly visible in the world of mobile.

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+++ Target practice +++

Yahoo and AOL bolster online ad offering

Yahoo and AOL have both made concerted efforts to improve their online targeting to specific audiences for advertisers. While Yahoo has launched new tools for marketers to target online users, AOL has acquired Tacoda, to help with targeted ad deals.

Tacoda has assembled a network of thousands of diverse sites that allow for insertion of behaviourally targeted ads. The acquisition will bolster AOL’s Advertising.com division, which places display and search ads online and accounts for about one-quarter of the company’s revenue.

AOL’s acquisition follows a spate of deals with online ad firms from its rivals, including Google’s proposed purchase of DoubleClick for $3.1 billion and Microsoft’s planned acquisition of aQuantive for $6 billion.

Meanwhile, Yahoo’s new tools called SmartAds, enable marketers to target specific groups of buyers. For example, if a Yahoo user is browsing for sports cars in Yahoo Autos and has selected New York as its default location in Yahoo Weather, SmartAds can deliver an ad that displays relevant cars alongside local dealer information.

SmartAds is initially being rolled out on Yahoo in the US for its travel industry advertisers. It will then be rolled out to other markets and other industries. The new tools and acquisitions signify the ongoing struggle for both Yahoo and AOL to keep up with rival Google in search advertising.

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+++ On the face of it +++

What does social networking mean for search?

As the compelling habit of online social networking spreads like wildfire, what does it mean for the world of search? The increasing time that audiences are spending on social networking sites is cited as one reason to anticipate a slowdown in the warp speed growth on online advertising, according to Group M, WPP’s umbrella media buying group.

Two in five MySpace members are over the age of 35 and Facebook’s US audience has doubled since opening up its membership to non-students.

Yet advertisers are grappling with how to market their brands on the fast-growing social networks, which are more resistant to advertising than conventional websites and search engines.

While young people seem to be quite comfortable broadcasting personal details online, one of Facebook’s appeals is its privacy controls. Life swimming in a digital goldfish bowl may lose its appeal when the novelty wears off.

As the thorny issue of privacy rumbles on, it may benefit search engines to seize the higher ground when it comes to sweeping over private lives with algorithms. Regulators are already concerned about the amount of personal information that is stored, analysed and exploited by internet companies.

The Article 29 Working Party, a group that advises the European Union on privacy issues is in the process of investigating how long search engines store the personal information of their customers.

This month, both MSN and Ask.com have called for the industry to develop better safeguards for protecting their users’ search histories. Google has agreed to delete cookies after two years. Ask.com went a step further by announcing it would enable its users to prevent the company from collecting and storing personal data, including search histories.

As the search engines are dragged towards tighter privacy measures, a more imaginative solution will be required if they are to tap into the commercial potential of social networking.