Re: GoTo Policy Change

From: Mike Golby <mikeg_at_laragh.co.za>
Date: Thu 29 Mar 2001 09:59:12 -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 Thu Mar 29 2001 - 09:59:12 CST