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Tech Almanac

Search Has Found Itself
Once-Overlooked Sites Are the Web's Revenue-Growth Monsters

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Google headquarters in Mountain View, Calif. Analysts expect Google's widely anticipated initial public offering to fetch billions of dollars. (Jeff Carlick -- Bloomberg News)


_____Correction_____
An April 28 Business article incorrectly described a policy of Yahoo Inc. Yahoo allows companies with relevant Web sites to pay for inclusion in its Internet search results, but it says it does not allow companies to pay for a preferred position in those results.


_____Graphic_____
Google Timeline: It hasn't taken long for Google to grow into the world's largest search engine.
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Aiming to Auction Its Way To a More 'Inclusive' IPO (The Washington Post, Apr 30, 2004)
Taking Stock of Google (The Washington Post, Apr 30, 2004)
Google E-Mail Ad Plans Raise Fears About Privacy (The Washington Post, Apr 2, 2004)
Google Improves Searches In a Number of Ways (The Washington Post, Jan 18, 2004)
Google Fans Fill Web With Buzz Over IPO (The Washington Post, Jan 13, 2004)
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By David A. Vise
Washington Post Staff Writer
Wednesday, April 28, 2004; Page E01

Google's widely anticipated multibillion-dollar stock offering underscores the meteoric rise of search engines as the driving force behind the global growth of online commerce, industry experts say.

Since its founding only six years ago, Google not only has helped computer users find what they are looking for online with astonishing ease and speed, but it also has spawned the creation of an entirely new industry. Numerous firms across the country now specialize in helping companies large and small make sure their names pop up when consumers look for products on the Internet.

Those clicks of the mouse add up. Industry analysts estimate that the overall search category -- including the major search engines like Google and Yahoo as well as their offspring -- has grown into a $2 billion industry that appears headed for $7 billion by 2007.

"The hottest area is search, and we are selling it like hotcakes," Alan M. Meckler, chief executive of Jupitermedia Corp., which is sponsoring upcoming conferences in Toronto, London, Stockholm, Chicago and San Jose, where executives will share ideas about the latest ways to market their products and services through online searches.

"It is the great driver of the Internet. This is the killer application," Meckler added. "We are seeing one of the great developments in business history here, in how people market."

That transformation is trickling down to Morrisville, N.C., where a firm named WebSourced Inc. advises 1,200 companies on the best strategies for search engine marketing and said it is adding new clients at the rate of about 100 per month. The company appears on track to more than double its revenue from $7 million last year to more than $15 million this year, and its growth from 50 to 90 employees in the past six months has prompted it to expand its office space from 7,500 to 31,000 square feet.

Andy Beal, the firm's vice president of search marketing, said WebSourced, through its KeywordRanking.com and other tools, analyzes company Web sites and figures out what phrases and topics they need to highlight in order to show up prominently on the search lists generated by Google, Yahoo and others.

For one of Beal's clients, Lowe's Companies Inc., that might mean enhancing the relevancy of the Web sites' content for paint and lawn furniture. For the NBC television network, it means figuring out what key terms will help sell more calendars and other merchandise based on the popular sitcom "Friends," he said. The firm also helps corporations purchase the most effective sponsored search ads, which are the listings that typically appear to the right of the regular search results on Google. While Google doesn't allow companies to buy their way onto its standard search results, Yahoo Inc. does allow companies with relevant Web sites to pay for a preferred search position in its rankings -- a transaction known as paid inclusion -- giving WebSourced yet another puzzle to solve for companies eager to sell more of their wares online.

For all of the small firms in the cottage industry that has grown up around Google, it remains the dominant player of the lucrative search universe with an estimated $1 billion in revenue from search-related fees and ad sales.

But as each day passes, Google faces stiffer competition from Yahoo, as well as a threat from Microsoft Corp., which is developing souped-up search engine tools of its own, industry analysts said. The other major change among the leading search engines and their smaller competitors is increasing localization, so that consumers can get fast, relevant answers to queries about local products and services, in the same way they now turn to moviefone.com to get information about movies playing at nearby theaters , or look at the printed Yellow Pages to locate a plumber.

Dennis Pushkin, chief executive of MoreVisibility.com Inc. -- a search engine marketing firm that advises clients including Sony Corp., the Metropolitan Museum of Art and the U.S. Army -- said that Google remains synonymous with online search, despite spending little on advertising or marketing. He credited Google with turning search from an evolving tool into a multibillion-dollar industry.

"They did build a better mousetrap, and the world came to them," Pushkin said. "Part of what is going on right now is the result of the brand they built, and the extension to that is the industry they are in. A lot of the sizzle relates to the brand as much as the industry. As they have grown, and as Google has become the default engine for most users, search has come to be realized as a very important ingredient in successful e-commerce."

MoreVisibility's president, Andrew Wetzler, said the leading search marketers aren't trying to fool the systems but are working with them. "The leading companies in our field are now zeroed in on successful partnerships with the search engines, not tools to beat them," he said.

Danny Sullivan, editor of Search Engine Watch, said Google's IPO, which Wall Street analysts estimate may value the company at tens of billions of dollars, reflects the extraordinary emphasis on search engines as the primary gateway to the Internet. Only a few short years ago, Sullivan recalled, nobody was talking much about search engines, at least not in financial terms. Now, he finds himself editing a growing newsletter and presiding over a Web site, searchenginewatch.com, that tracks how a nascent trend has grown into a moneymaking juggernaut.

The Google IPO, Sullivan said, "will put an incredible value on search. If anybody hasn't realized how thriving it is, they will have to be in a closet not to get it when Google goes public."


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