Re: AltaVista Testing Paid Search Results

From: Mark Montgomery <markm_at_gwin.net>
Date: Thu, 15 Apr 1999 05:44:06 -0500 (CDT)

Some basic strategic development here-

Search engines like Alta Vista (especially) are by
definition comprehensive directories. This is not Superbowl
entertainment where thirty second spots can be auctioned to
pay for the beast, and then return to regular programming.
Global directories are where one goes to find what exists,
or doesn't. If based on auction, soon enough only those with
the most capital will exist, then they will call for
immediate regulation. I'm all for revenue streams and
increased NOI for Alta Vista which has contributed so much,
but this is a suicidal method in attempting to achieve it,
especially for Compaq.

I addressed this issue in the future series in GWIN's
Convergence Zone, and is part of a book currently being
pitched by the same name. Please keep in mind that I have
fought most regulation in business for almost 20 years, so
don't get the wrong idea.

Excerpts from "Future 3":

"A progressive economic eco-system is one where systems are
carefully managed to prevent abuses, which in the case of
the network economy, abuses tend to be systemic, universal,
and therefore potentially catastrophic."

"These are my recent thoughts concerning policies in the
existing network economy and the questions that need to be
asked of President Bill Clinton and his peers throughout the
world:

-If having equal opportunity for placement in a search
directory or a browser is not a civil right, or the absence
of which a restraint of trade, what is?

-If giving away free product that costs millions to develop
in order to flood the market and destroy competition isn't a
predatory practice, then how do you define predator?

-If copying business plans and concepts isn't theft, then
how should we define theft in the digital age, and how do we
recognize thieves?"

"We hold these truths to be self-evident, that all men are
created equal that they are endowed by their Creator with
certain unalienable rights, that among these are Life,
Liberty, and the pursuit of Happiness. That to secure these
rights, Governments are instituted among Men, deriving their
just powers from the consent of the governed."

American Declaration of Independence continues....

"Prudence, indeed, will dictate that Governments long
established should not be changed for light and transient
causes....... But when a long train of abuses and
usurpations, pursing invariably the same Object evinces a
design to reduce them under absolute Despotism, it is their
right, it is their duty, to throw off such Government, and
to provide new Guards for their future security. Such has
been the patient sufferance of these Colonies; and such is
now the necessity which constrains them to alter their
former Systems of Government."

Source:
GWIN Pro Convergence Zone
http://www.gwin.net/core/Publications/cz/future,.cfm (Paid
subscription required, free trial available)

Compaq CEO Eckhard Pfeiffer:

"We set a vision to become No. 1 [PC maker], we did it. We
said we wanted to be in the top 3 global companies, we're
there. Our next vision is Internet leadership,"

"If you read several reports by analysts who have also gone
and looked at what is happening - what growth is in the
small and medium business markets, for example - they've
come back and said it's single-digit only. It was expected
to be in the mid-teens,"

Source:
http://www.msnbc.com/news/259027.asp

Now I don't want to contribute to Compaq bashing this week,
however....

Why do we think the SB market is not investing more heavily
in the software, hardware, and networking surrounding the
Internet, even if they did invest some $180 bn last year in
the US alone?

Gee, I wonder if it could be because of policies like search
placement auctions?

Now ask yourself: Where does one goes when corporate markets
become saturated?

A refresher about the US SB market-

America's 23 million small businesses employ more than 50
percent of the private workforce, generate more than half of
the nation's gross domestic product, and are the principal
source of new jobs in the U.S. economy.

Small businesses' (US)

--provide 67 percent of workers with their first jobs and initial
on the job training in basic skills

--provide virtually all of the net new jobs added to the economy.
--represent 99.7 percent of all employers.
--employ 53 percent of the private work force.
--provide 47 percent of all sales in the country.
--provide 55 percent of innovations.
--account for 35 percent of federal contract dollars.
--account for 28 percent of jobs in high technology sectors.
--account for 51 percent of private sector output.
--represent 96 percent of all U.S. exporters.

Source:
http://www.sba.gov/aboutsba/

Now granted many of the highly valued IPOs are considered
small businesses because of low levels of staff and revenue,
but that covers about 100 out of hundreds of millions
worldwide.

I'll leave it not with solutions, because those are
proprietary and I think we have subsidized a very few quite
enough, and perhaps we should contribute no more until a
healthy and balanced market is the objective, but with some
indirectly applicable quotes:

--Democracy is that form of society, no matter what its
political classification, in which every man has a chance
and knows that he has it --James Russell Lowell

--As I would not be a slave, I would not be a master. This
expresses my idea of democracy. -- Abraham Lincoln

--But it is not by the consolidation, or concentration, of
powers, but by their distribution that good government is
effected. -- Thomas Jefferson

--If the grass is greener in the other fellow's yard-- let
him worry about cutting it. -- Fred Allen

-- There's always an easy solution to every human
problem--neat, plausible and wrong.

--There is no expedient to which a man will not resort to
avoid the real labor of thinking. --Thomas Alva Edison

If anything, without a change in the way we currently
capitalize and develop strategy for the network economy, I
could well be understating the importance of this issue.

Mark Montgomery
Founder
http://gwin.net


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Received on Thu Apr 15 1999 - 07:49:07 CDT