Re: GoTo Policy Change

From: Mike Golby <mikeg_at_laragh.co.za>
Date: Tue 27 Mar 2001 14:02:42 -0600

MICHAEL MARTINEZ <Michael_at_xenite.org> WROTE:

>Unless Sprinks and other competitors
>start lining up partners in a similar model, they have
>no incentive to raise prices to .05 per click, although
>they might (after September rolls around and Goto's
>grandfathering fades away into sweet memory) raise
>their prices to, say, .03 per click.

Michael, you're spot on in pointing out that it costs
GoTo more than $0.01 in partner referral fees. However,
my consternation concerning Sprinks, FindWhat, et al
has little to do with whether they decide to follow GoTo's
lead or not. My concern is that, come the flood from GoTo
of those eager to part with their money, my listings born
of sound optimization and carried by Inktomi rather than
mismanaged advertising budgets will disappear under a
welter of $0.01 bids pumped in by people who fail to
understand that, by becoming one of several hundred
bidding the minimum on popular keywords, they will never
see their sites listed on one of GoTo's or any other PPC's
partner sites. And surely that is their objective, for who
but a marketer would use GoTo as a search engine? With its
rankings plummeting like a birdshot chicken, that's
certainly the only market I expect to find there :-).
Secondly, thank you for pointing out that GoTo's new model
is out for a test run. Few seem to realize that Internet-
related business models are in a state of furious flux right
now. GoTo's New Deal might fold within weeks of launching
and fried chicken will be the order of the day. Those now
lost on page 8 can then return to reclaim their anonymity.
And finally, NBCi? Do you really think so? Is it not more
likely than an outfit like Terra Lycos to go the same way as
Go?

AND STEVE HARRISON <merlin_at_worthlink.net> WROTE:

>It's a rare (and hopefully vanishing) breed of economic
>sensibility that would deride as a "squalling bunch of
>two-faced penny-pinchers, freeloaders and hypocrites"
>those who are so crass as to try and compete at
>e-commerce on scant or out-of-pocket advertising
>budgets. From such arrogance, one might get the
>impression that Mr. Golby believes the myth that all
>dot-coms are obesely funded by giddy venture capital
>outfits and are rolling in advertising bucks. Get real,
>Mr. Golby, et al who labor under that naive perception.

I agree with both your points, Steve but why, given your
wonderfully colorful response to what is essentially a
humorously provocative prod, would I ever need "blunt
insinuation"? :-). Thank you nonetheless for your concern
for my health. Happily I'm not prone to dyspepsia nor in
need of catharsis. As one operating without an advertising
budget, I would be extremely foolish to deride those in my
position. What concerns me is that those with small adspends
who are not au fait with the advertising industry might not
keep a close enough watch on their log files. They are
perhaps squandering what they have on over-hasty support for
dodgy advertising models designed to profit the middleman.
This becomes especially important to those considering the
leap to $0.05. Had I a small budget, I'd rather keep my
rankings up there - for the reasons sketched above - using
common sense optimization techniques than financing GoTo's
latest business model in the vain hope of picking up number
four spot at the foot of Alta Vista's search page. Ranked
fifteenth or seventieth, what assurance does GoTo give
me that my site will be picked up should I take top rank when
and if that advertiser's account runs dry. Are results pushed
to or pulled in by partner sites? Not that GoTo, as most
bleating soon-to-be former advertisers appear to think, owe
me or any other small business an explanation or anything like
one. After all, given a mile to walk in their shoes, what do
you suppose most Mom-and-Pop store owners would do? Donate
their money to the SBA? I doubt it. They'd seek to do exactly
as GoTo has done and grab what they can while the going is
good. Business is, after all is said and done, business.
On the second point, one might get that impression but then one
wouldn't be living in 2001. The NASDAQ jumped out of the window
a while back :-). As for your summary, again I concur
wholeheartedly - although I think it might be going just a bit
far to call GoTo a "money-maker in the extreme". Besides
surviving the meltdown, what else have they done but cheese a
few people off? BTW, I realize full well that many advertisers
serving niche markets have done extremely well out of GoTo's
$0.01 model. Like most mature advertisers, I'm sure they will
quietly reassess their position and find a viable and perhaps
more rewarding alternative.

Kind regards.

Mike Golby
Laragh Courseware
http://www.laragh.com
"e-Learning Matters"






Received on Tue Mar 27 2001 - 14:02:42 CST