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Questionable Results at Revamped Yahoo

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By Leslie Walker
Thursday, March 11, 2004; Page E01

Say it ain't so, Yahoo. You wouldn't sell out loyal users to those money-grubbers on Wall Street, would you?

I am a big fan of Yahoo, believing it has the best general portal on the Web. Still, I am worried about where Yahoo is heading with its revamped Web search, especially after testing it last week.

The best spin may be that Yahoo is experimenting with ways to balance the needs of users and advertisers. The worst would be that Yahoo is letting advertisers rule its search roost, contrary to the way users seem to rule at rival Google.

Both are struggling to decide how best to sprinkle related ads across search results, an issue with big implications for other online media companies. The issue merits special attention now because Yahoo divorced Google as its longtime search partner last month and began -- for the first time -- showing results generated by its own Web-crawling software.

Yahoo made a huge investment to accomplish this, plunking down more than $2 billion in cash and stock to buy companies with technology it hopes will make its search engine as smart as Google's.

This competition is good news, because Google was gaining too much market share. In December, it processed roughly three out of every four Web queries, according to the Web traffic measuring firm comScore Networks Inc. Even after subtracting the searches it conducted on behalf of Yahoo, Google is still handling roughly half of all Web searches.

Big bucks are at stake. The more queries each handles, the more they can charge advertisers to place small text ads beside and on top of results. Search ads are projected to generate more than $3 billion in the United States this year. Piper Jaffray Cos. estimates Yahoo will net about $1 billion from search ads this year.

So what worries me about Yahoo's new search? When I run comparison queries at Google and Yahoo, several obvious differences jump out. First, Yahoo devotes a lot more space to ads -- so much that on some queries, you might not even notice the regular results for all the ads. They often consume three-quarters of the screen that is supposed to display top results.

Second, Yahoo places ads in a more prominent position than Google, with fewer visual cues to separate them from non-commercial results. No doubt this translates to more clicks for advertisers and more money for Yahoo, since advertisers pay only when people click on their ads. But I find it annoying to have the ads dominating the center of the page.

Finally, Yahoo made a change last week that most visitors can't see, yet which troubles me deeply. It announced a new program, Site Match, allowing businesses to pay to get their sites included in Yahoo's Web index. Yahoo said the payments will have no effect on rankings, and therefore these paid listings won't be marked as ads.

Yet each time a user clicks on a Site Match link, the site owner must pay Yahoo at least 10 cents. Piper Jaffray estimates the paid-inclusion program will dump $50 million to $100 million into Yahoo's coffers this year.

Yahoo says Site Match is designed to help it index Web pages hidden inside databases and other hard-to-access places. In return for payments, the sites will also get crawled more frequently by Yahoo's indexing software and be allowed to submit more information in formats Yahoo hopes will allow for smarter query-matching.

Tim Cadogan, Yahoo's vice president of search, said Yahoo is selectively offering the program for free to nonprofits with huge databases, including the Library of Congress. He added that Yahoo has a general disclosure on its Web site explaining that some sites pay to be in its index; it does not identify which ones.

But critics call paid-inclusion a form of hidden advertising, saying it could taint results by indirectly influencing the rankings. That's why Google said it has never allowed sites to pay to be in its index, even though Google works closely with large sites to help them give access to Google's crawler.

Google co-founder Larry Page said each search result involving payment should be labeled to preserve public confidence. "I see it as very much like with traditional media," Page said, "where if someone is paying you, you make clearly understandable to the reader that it is an advertisement."

Ask Jeeves Inc. said it recently discontinued a similar program because it was unable to make fair comparisons between sites crawled in the regular fashion and those paying to provide information.

In interviews, Yahoo executives insisted the goal of their paid-inclusion program is to boost relevance and comprehensiveness of results. Still, it's hard to believe that boosting revenue isn't a goal, too. Otherwise, wouldn't Yahoo let sites submit their pages for free?

Some advertisers aren't happy about program, either. They don't like paying for each click when their listings are appearing inside the regular search results, rather than with the ads. Some also complained that they can't set daily spending limits or caps on particular keywords, as they can with other search ad programs.

"It's like, 'Let's throw money at it and hope it shows up,' " said Andy Timmons, who manages online marketing for thousands of contractors at EveryContractor.com.

Mind you, Yahoo is making some other smart moves to link its search results to other content inside its own network, material such as travel guides and company profiles that Google may have trouble matching. One example is the local mapping feature Yahoo debuted this week. It lets people pinpoint the location of businesses and community resources on maps. Start with a map of the area around any address, say 1600 Pennsylvania Ave., then you can selectively add restaurants, parks, banks, movie theaters and other entities in more than 50 categories. Roll your mouse over each entity's icon on the map, and up pops its address, phone number and Web address.

Yahoo is still figuring out how to integrate local advertisers into this mapping service, but initial charter sponsors such as Holiday Inn appear as clearly marked external links that you can click to add their hotels to the map.

Let's hope Yahoo doesn't move toward a paid-inclusion model on maps, too, in effect littering them with advertising icons. Rather, I hope it takes to heart the criticism about hidden advertising and revamps Site Match to -- at the least -- require each paying site to clearly identify itself.

Leslie Walker's e-mail address is walkerl@washpost.com.


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