Re: GoTo Policy Change

From: Robert J. Woodhead <trebor_at_animeigo.com>
Date: Fri 30 Mar 2001 15:23:17 -0600

KYLE YAMNITZ <Kyle_at_EdScope.com> WROTE:

> There is no finite amount of space on GoTo.com
>- bidded keyword results will span multiple pages.
>Raising the minimum from 1 cent to 5 cents is an attempt
>to get more money from the keywords that there isn't as
>much demand for (where competition for the keywords hasn't
>raised the demand to 5 cents or more). Take care,

Unfortunately, GoTo failed to realize that for many high-
traffic keywords, where the top bids are all over 5 cents
already, there is an economic nitch for bids of 1 or 2
cents (even if they are way down the list). These tend
to be very generic keywords, so their conversion value is
low for people with specific products. It's viable to
pay a cent or two, but not 5 cents.

The optimal way for GoTo to implement this change would
be to say "the top N bids must be 5 cents or more."
This makes their partners happy, bumps the cost of the
noncompetitive keyword bids (with only a few 1 and 2 cent
bids), but still gets them incremental income on the
high-traffic keyword searches done directly on them.

For example, my #1 dollar volume keyword on Goto is
"yahoo." I pay a cent or two a click, I'm waaay down on
the list, and yet I still pay $20 a month for that 1
keyword. Those clicks are low conversion (because quite
frankly the url they lead to is a public service tutorial
and so only indirectly convert), but they are worth the 1
or 2 cents.

Come september 1, GoTo will lose that $20 a month - 10%
of my monthly GoTo bill. That's a pure 100% loss to them
since they wouldn't be sharing any of that 1 or 2 cents
with their search engine partners, who only use the top
few results anyway. In fact, given that they have to pay
for Inktomi results to fill out any pages with less than
30 bids, it may end up being a greater than 100% loss if
it means that Inktomi results are needed on the first page
of a popular keyword!

If GoTo wants to raise their prices for the top bids
because of the economic realities of their partnerships,
that's fine. I just wish they wouldn't shoot themselves
(and me!) in the foot while doing it.

If I'm so off base with this analysis, lets hear from a
GoTo rep explaining why, without any of the weaseling
that so annoyed almost everyone who received their recent
email.

Finally, I'd like to reiterate that as I have been since
day 1, I'm a big fan of the GoTo concept. I'm toasting
them here (as I have toasted them before), because they
are making it hard for me to send them money. God I hate
that!

Best,R
--
===========================================================
Robert Woodhead, CEO, AnimEigo http://www.animeigo.com/
===========================================================
http://selfpromotion.com/ The Net's only URL registration
SHARESERVICE. A power tool for power webmasters.




Received on Fri Mar 30 2001 - 15:23:17 CST