Re: AltaVista Testing Paid Search Results

From: Mark Montgomery <markm_at_gwin.net>
Date: Fri, 30 Apr 1999 10:13:49 -0500 (CDT)

1) I'm not opposed to paid search results. We in fact tested
it with our Shop The Web Directory back in early '97
primarily because it was a much more fair system. A few
merchants were even willing to pay for it but amazingly we
did not get support from either the corporate or venture
sectors, and we "shopped" and it was certainly warranted in
traffic growth and modeling. (?)

The difference was that we had a cap of $1,000.00 for the
highest placement with the most text, biggest graphic, etc.
within each category. Beyond that it was good ole banner ads
for those who wanted more reach. It was solid but ate our
budget quickly with the growth so we had to close it.

2) The argument that auctions are good for small business
when they are bidding against giant competitors simply isn't
credible, and everyone that doesn't know this should. Sure,
a category or topic might be open briefly but we live in a
hyper-competitive world; as soon as some giant sees profit
(whether real or imagined), they will descend with the
world's retirement system as its backer and outbid anyone
other than a similarly sized giant.

That is after all the reason for employing an auction model.
Buying and selling merchandise in an auction model can
benefit small businesses, but auctioning off entry to a
distribution channel is the most blatant abuse of capitalism
one can imagine, but of course it's been used on store
shelves for decades. That was the whole point of the new
medium for many of us and if we lose a chance (arguably we
already have) for the 100 hour per week, hardworking
backbone of the economy, we are in trouble.

One further point on this topic, because it's important.
Unfettered capitalism is not Darwinism where the strong or
intelligent survive, it is where only the rich survive, and
ultimately is suicidal without careful management of the
market's equilibrium. Remember the fall of the Roman empire
or any other? Too many were made slaves to too few and the
slaves were often smarter and stronger. Brilliance it does
not take to figure out what happens next.

The network economy is very much out of equilibrium. On one
side we have socialist extremists, many who see it as the
final huge gasp before capitalism implodes, while on the
other extreme we have (some- not all) entrepreneurs and VCs
who have been led to believe that "he who owns the most at
the end of life wins". Boy are they in for a surprise!

In other words, I think both extremes are absolutely wrong
and we very much need leadership in the industry that is
more balanced and less suicidal from an economic modeling
point of view. GoTo is not a threat unless the entire
industry goes that way and we no longer have a choice in the
main navigational traffic centers. Yes the Web is enormous
and diverse folks, but look at the numbers, it tells the
story.

Business has always had to manage markets for our own
survival, and when we proved we couldn't, regulators did and
most often really made a mess of things. Therefore, we do
need good modeling and steady revenue from portals but what
we really need is product differentiation and a diverse
choice. Portals and venture capitalists need to get the heck
out of their collective sheep boxes and start considering
that answers to their dilemmas will not be found in the same
well that poisoned their thinking to begin with. Innovation
depends on an environment that DEMANDS and REWARDS
innovation, not copying each other. Creativity reigned in
'95 and '96 before the creation of on-line businesses became
institutionalized and lost its creativity to deal makers.
That's what laid the foundation for the revolution and the
boom.

These issues are not new but grow very old and tiresome. If
we are not careful, small business may just turn their backs
on this fantastic new medium because manipulators have taken
over. If they do, lookout for very large dominos falling all
around and try not to get squashed.

Mark Montgomery
Founder
GWIN


========================================================================
------------------------------------------------------------------------
       This week's Online Advertising Discussion List sponsors:
        Flycast, RadicalMail, and Clicksales.com/Download.com

WEB ADVERTISING THAT MAKES YOU A HERO. Our Web experts optimize your
buy across 780 sites. All for what you'd normally pay for placement on
one. Call it superhuman. http://WWW.FLYCAST.COM/OA

                                ---

   Sure, you can continue to rub two sticks together.But that's
      not gonna make the Advertising Gods real happy. Check out
    http://www.radicalmail.com for advertising that really works

                                ---

 ###100% GUARANTEED### Pay-Per-Click and Pay-Per-Download Advertising
     All of your money back if you are not completely satisfied!
-->> http://www.clicksales.com/ and http://www.downloadsales.com/ <<--

------------------------------------------------------------------------
========================================================================
Online Advertising Discussion List To Unsubscribe send UNSUBSCRIBE
http://www.o-a.com/ to online-ads-request@o-a.com



Received on Fri Apr 30 1999 - 11:49:28 CDT