RealTime IT News

Search Versus Search in Silicon Valley

A pitched battle for market share between three Internet giants, ballistic revenue growth and acquisition-hungry ad agencies could make for a sizzling conference.

Search Engine Strategies, a Jupitermedia conference held today through Thursday in San Jose, Calif., focuses on optimizing Web pages so they'll rank higher in search results and on search engine marketing, the arcane and effective methods of bidding to have text ads show up when Internet users type key words or phrases into the search query box.

The conference will feature everything from basic tutorials for newbies to wonkish technical tips for experts. Jupitermedia owns and operates internetnews.com.

Search engine marketing (SEM) is considered the fastest-growing medium in the history of advertising, and the hoopla surrounding Google's impending $3.3 billion IPO has upped the intensity. The estimated $2.6 billion search advertising market in 2004, estimated by Jupiter Research to soar to $5.5 billion in 2009, has fueled fierce competition between Yahoo, which owns paid search provider Overture, Google and Microsoft's MSN. The latter is playing catch-up in search but coming on fast.

Last week, during its annual analysts' conference, Microsoft's MSN unveiled new search technology that searches not only Web sites but also data on a PC hard drive, databases and other "deep" Web content.

At the same time, the online division's MSNbot has been crawling the Web, building up MSN's index in advance of the launch of its home-built search engine; the index contains about 1 billion pages to date. MSN is adding Google-like features such as Newsbot, a customized search-driven news service, BlogBot for searching Web logs, and a natural language search engine called AnswerBot.

Coming off a record year for ad sales on MSN, the division also is testing orchestrated advertising, which uses rich media and personalization to target ads more effectively. It's the kind of offering that helped rival Yahoo bring in revenue of $832 million last quarter.

Such enhancements will give search engine marketers plenty to puzzle over as they struggle to keep up with this quickly changing medium. The industry already is buzzing over a recent study that indicates paid search listings are not only a direct response vehicle, but can also have a positive branding effect.

The July study by the Interactive Advertising Bureau (IAB) and Nielsen//NetRatings measured the brand impact of both sponsored and contextual listings in several categories of products. The 10,500 study participants were 27 percent more likely to name a specific brand if it was in the top spot on the search results page, while contextual listings, which appear on regular Web pages, caused a 23 percent lift in awareness.

The study fired up the SEM world because sponsored search listings and contextual ads are sold relatively cheaply on a pay-per-click basis, while pricey display ads are considered central to brand advertising.

The show may also be a bit of a meat market. Some SEM companies with proprietary technology may be attractive acquisition targets for traditional ad agencies. The conference includes sessions on valuing SEM companies, how the public markets view them, and one session bluntly titled "Cashing Out."

For the SEM industry, it feels like 1999 all over again.