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Search Seeks Economic/User Balance

BOSTON -- Two parallel trends are occurring in the search engine industry: Marketers are embracing paid inclusion and placement; and users are posing a record number of increasingly specific queries.

Depending on who you talk to, this represents a happy, lucrative confluence of events, or a dangerous scenario that has the potential to alienate users.

Unsurprisingly, Tim Cadogan, vice president of search and marketplace at Yahoo! subscribes to the former view. He concedes that balancing economics and user satisfaction will take work but is ultimately in the best interest of both groups.

"Being in wrong place at the wrong time has a cost for you -- you don't convert a sale," Cadogan told a crowd of marketers at the second day of Search Engine Strategies Conference & Expo this morning.

Advertisers also risk unflattering comparisons to the scattershot strategies of telemarketers if paid inclusions, which are moving into interior content pages, are not implemented intelligently.

"The gray area is understanding if the customer needs (a product or service) or is interested in pure research," said Cadogan, who recently joined the Sunnyvale, Calif., portal and search giant from Overture .

The first step, is understanding the user's request. For example, should a query for "windows" return pages from Microsoft or Anderson? Yahoo!, which has suddenly gotten very serious about paid search after paying $235 million for Inktomi, is looking to address dilemmas like this using a combination of techniques.

"We might present a 50-50 mix and see over time what users pick," Cadogan said. "If users are consistently choosing Microsoft, the operating system choices might gradually float to the top of the results page," Cadogan said.

Other synonyms that could fall into the windows category include china and mouse. Subsequently, search engines must determine if the searcher needs of a product or service, or if they are involved in pure research.

Along similar lines, Cadogan is considering adding various content to the results mix. Because the user who keyed in the search is probably younger, Yahoo! might add images to appeal to the demographic. There would be little value in trying to add images to a query for a dry subject such as Peruvian election results, Cadogan said.

In addition, Yahoo! might vary the mix by pulling in content local content, or adding different file forms. A search for a hot new band better lends itself to images or sound clips than a search for Peruvian election results.

"I challenge the idea that tension must exist," Cadogan said.

Editor's note: Search Engine Strategies is produced by Jupitermedia, the parent of this Web site.