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Pay Search Results Prove Lucrative

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Oct 13, 2003 12:00 AM PDT    Text size: 
REDMOND, Wash. – According to a recent study, paid search advertising is proving to be one of the most lucrative markets for search engine companies and online advertisers by delivering sound search results to the consumer, and high-quality, qualified traffic to the advertiser.

According to a study released by Jupiter Research, revenue that gets generated from online search coverage is doubling, and this relatively new vehicle is serving as a highly effective option for online advertisers.

On the heels of its acquisition of paid search engine Overture, Yahoo recently attributed a leap in third quarter profits to paid search revenue, and Microsoft terminated a multi- year licensing deal with search provider LookSmart, starting a flurry of rumors that the computer maker is planning to reach beyond its MSN search engine and develop its own strategy as a paid search provider.

"Unless they make some terrible mistake they're going to continue to be a very strong player," Danny Sullivan of Search Engine was quoted as saying. "If they've decided it's important and they want to grind away at trying to solve the problem, they have a good track record of putting together good software to do that sort of thing."

Analysts estimate that Microsoft, which for years has relied on outside companies like Inktomi and Overture to provide the search tool on its MSN website, is said to be investing millions of dollars in developing this new search engine.

And while Microsoft would not disclose information to XBiz regarding its future plans to move into the paid search engine space, rumors abound that the computer maker is planning to upseat Google and Yahoo! as the leading search sites and take its fair share of the paid search engine revenue pie.

Jupiter Research statistics state that revenue for paid search advertising has doubled its earnings this year at an estimated $1.6 billion. This burst in revenue outpaces all other forms of online advertising.

The secret sauce behind the search engine phenomena, say experts, is that online consumers see search engines as tools to help them find web sites via keyword entries, but what they end up with in many cases is paid advertising directly targeted at whatever search category they are looking for. The average web searcher uses search engine technology more frequently than any other feature of the Internet.

Of the nearly 4 billion search engine searches conducted each month across the World Wide Web, key search words "porn," "sex," and "xxx," are said to be the most popular search engine entry words on the Internet today.

In many ways Google can be credited with making the biggest mark in the paid online advertiser space when it launched AdWords, a search feature that weds paid advertisers with a user's keyword search.

Adult search sites like Sex.com and YouHO, along with more mainstream search models like Overture and Yahoo, also sustain highly effective advertising models by either linking ad results with search results, or more prominently featuring paid search results above other results.

The benefits of the paid online search, states Jupiter, is that it assists marketers in optimizing their search marketing tactics within the context of their overall media mix. Paid search results provide a more accurate framework for companies to evaluate their own search strategies, both on their sites and throughout the web, and search sites can also evaluate the economics and evolution of the web-wide search industry using consumer data, executive surveys, and industry forecasts.

In addition to Microsoft's move to develop a search engine strategy, which could conceivable be bundled in the future with its software and hardware products, IBM Corp. recently announced a search engine technology called WebFountain, which is designed to not only find text in a variety of places online but also analyze its meaning.

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