It's officially a gold rush, with everyone now stampeding to mine the allegedly huge dollars to be found in the local search market. Let's not be bothered with whether or not what's being sold is what the market needs -- that would spoil all the fun.

Google and Yahoo now have beta versions of their answers to local search open for inspection. My quick review: they're better than I would have expected, but a long way from what's needed. AskJeeves has partnered with CitySearch so that its local restaurant and nightclub listings will appear prominently in applicable search results. In the yellow pages area, FindWhat has announced that Canada' s Yellow Pages Group will be grafting FindWhat pay per click auction technology onto its site, perhaps more evidence of a mini-trend in this area. Every other yellow pages publisher is out with their own local search initiatives, all fervently hoping that local retailers will deliver the online riches that have eluded them to date.

As Janice McCallum of Shore Communications points out, local newspapers are the group best positioned to benefit from local search, but they continue to sit around as more nimble competitors rip the guts out of their businesses. Just as newspapers saw their classified advertising business decimated, local search may ultimately start to cut into newspaper display advertising, which might finally spur them into some sort of coherent reaction. Newspapers have always jealously watched the yellow page business. Indeed, most major newspapers have at one time or another owned yellow pages publishing companies, only to divest them after concluding they just didn't "get" the directory business. Now with the Internet, there actually would be some great synergies between newspapers and yellow pages, but newspapers still feel burned by their earlier yellow pages experiences.

So who's going to win in the local search game? Here are my predictions:

I agree with Janice McCallum that newspapers are the best positioned to be the winners in local search, but they've got to overcome their own inertia, previous bad experiences with directory publishing, fighting a multi-front war over their classified advertising, and the surprising continued strength of the print yellow pages business, which limits their openings. I just don't see newspapers pulling it off, especially since they need to overcome the biggest obstacle of them all: themselves.

As to the big search engines, I personally believe the cracks are starting to show as they push to be all things to all people. The future of search -- yes you heard it here first -- is two-tier searching, where the big general search engines hand off certain types of searches to specialist search engines/directories/yellow pages.

Local yellow pages publishers have always dreamt of being national yellow pages publishers. The Web let them indulge that dream, and indulge they did. Of course, while these publishers raced to build out national content, they never built out their regional sales forces. Is it any surprise they aren't drowning in ads? For several years, I've been urging yellow pages publishers to play to their local strengths. I'm currently estimating it will take 2-4 years for them to get up enough courage to try, and then they'll be contenders.

Long-shot possibilities? Think about Comcast, or even AOL, both of whom have unique capabilities to target content geographically, and a still significant "home page advantage." Stretch your imagination a little further and you might come up with InterActive Corporation, a powerhouse in local listings with holdings such as Citysearch, TripAdvisor, Evite, ServiceMaster, but seemingly more interested (for now) in the rich transaction revenues generated by its Ticketmaster, Hotels.com and Expedia units.

Bottom line: local search will happen, and it will be big, but it's going to be a big, sloppy, crazy competitive mess for 2-4 years before yellow pages publishers realize they should focus on selling ads where they actually have salesforces. Then we'll have our winner.

I want to elaborate on last week's message that we are moving towards two-tier searching, with general search engines "handing off" searches to more specialized search engines and databases.

This prediction is based on my belief that general search engines are not and never can be the single best way to access all information. That's especially true when you don't have access to all information anyway, and the information you do have is highly inconsistent in structure, depth and currency. Layer on top of that the technological limits on full-text searching, and you can start to see why I say this. Interestingly, the hot new search engine start-up of the week, Kozoru, reportedly raised $3 million in venture capital based on the concept of introducing taxonomies into search. This says to me that others are seeing the limits of keyword searching.

The opportunity in second-tier search is to take a specific subject area and cover it deeper and better than a general search engine ever could. This could be expressed as a vertical search engine (take a look at GlobalSpec), a vertical buying guide (look at Hanley-Wood's ebuild.com or Martindale-Hubbell's lawyers.com) or a vertical portal (look at West's findlaw.com). The commonality in all three of these sites is a tight vertical coverage area, proprietary content (if only because the content is stored in such a way that it's invisible to the major search engines), and lots of structure to speed searching and provide precise and consistently presented results.

I suggest that the major search engines will increasingly "hand off" searches to second-tier information sources. That's not to imply that these hand-offs will be free. I suspect second-tier information sources will assume that role through aggressive and expensive pay-per-click programs, and we're already seeing some very expensive exclusivity deals between search engines and specialty buying guides.

This game will get more expensive and competitive before it's over, and the rules of engagement are likely to change over time. Indeed, the general search engines may choose not to explicitly acknowledge that they can't be all things to all people, but this evolution will be hard to stop, because it's logical, natural and the revenue the general search engine might be forgoing is revenue that might never have been theirs anyway.

Is what I am describing the same as what is now being called "vertical search"? Yes and no. Two-tier search includes buying guides and directories, whereas vertical search generally refers to vertical versions of Google. Further, the word "vertical" still sends shivers down many spines, due to such things as vertical portals (ahead of their time) and VerticalNet (out of their minds). Two-tier searching is here already and working quite nicely. What's evolving is the relationship between these specialty search resources and the big general search engines. The better that relationship, the better the prospects for the second-tier search engine.

In posts past, I've dissed the newspaper industry for not harnessing the Web to build local buying guides and shopping sites, given what I see are built-in advantages to dominate local search. That's why it was with great anticipation that I went to take a look at ShopLocal.com, the newly announced local shopping site from CrossMedia Services, a company jointly owned by newspaper giants Gannett, Knight-Ridder, and Tribune Company.

Rather than a series of local micro-sites, the newspaper giants are thinking big and have built a national site to drive local shopping. But you quickly get to local offers by entering your city name or zip code on the opening screen. Any indications that the site was affiliated with my local newspaper were conspicuously absent, and there wasn't much in the way of explanatory text to position the site to users or even describe its contents and purpose.

I entered a zip code for Philadelphia and got a search results page split into three sections: categories, stores and brands. The category section of the screen gave me a list of yellow pages-like headings from which I could search. The stores section of the screen lists local stores (currently all national chains, buy hey, they're just getting started), and the brands section showed me a list of national brands. For fun, I clicked on "outdoor playsets," and found three offers: CVS offering not playsets, but rather a storewide discount, and two offers from Home Depot for playsets. Under each item was the option to "add to list," which creates a printable list that consumers can take shopping with them to remember what to buy. Under one Home Depot item was the option to "buy online," which didn't sound much like local shopping to me. I clicked on it and found that I could indeed order my playset online. Why do I already feel that ShopLocal may be missing the point?

The other thing I quickly learned about ShopLocal is that it is focused on special offers. Click on a category and you'll be presented with an eclectic list of whatever the various merchants in the category happen to be featuring at that moment -- sort of a giant electronic yard sale. Maybe you want these things, maybe you don't. The classification taxonomy appears to be a work in progress. Under the general heading of "automotive accessories" were only four sub-categories, one highly specific one for "power inverters," two much more general ones and one for "miscellaneous." It's not fatal, but if the site grows, this could quickly become a mess. What's really surprising is that the site doesn't allow users to print coupons to build involvement and help retailers track response -- it merely generates a simple shopping list.

One thing I liked about ShopLocal is that you can attach your email address to any store, brand or category and receive weekly emails with current specials. That's smart marketing, pushing special offers to targeted consumers, but in a way, the power of this feature really makes the rest of the site seem unnecessary.

What I saw with ShopLocal was a national site, utterly devoid of local personality and in no way leveraging or complementing the local paper. The fact that ShopLocal had no local merchants (at least in Philadelphia) I will attribute to its recent launch. However, this is a trap that's befallen other putative local shopping sites --- bringing on true local merchants is a pain compared to selling the big national chains, so guess what: they don't. So ShopLocal's commitment to local shopping will need to be proven over the next few months.

The press release for ShopLocal notes that its mission is to marry online research to offline shopping, making its many convenient links to online ordering a bit mysterious. The press releases also positions ShopLocal as saving the consumer from having to go to numerous different Web sites to find the best deals. But since ShopLocal only lists sale items, it will be a very long time before it has enough mass to present a real comparative shopping experience to consumers.

Another failed online venture by the newspaper industry? Perhaps not. The most interesting thing about the launch of ShopLocal was the sentence in the press release stating "...in the coming months, we expect to announce additional network partners such as portals, online directories, and other newspaper publishers." Will ShopLocal soon be sporting local yellow pages listings? Maybe the newspapers do get it after all.

There's lots of room to disagree when it comes to contextual advertising -- and that's what make the decision on whether or not to participate in programs such as Google AdSense so challenging for publishers right now. What I'm seeing in the market are the first steps towards refining and improving the whole concept, and that, as with all things Internet, will mean even more confusion before we get to anything approaching clarity.

One company that's getting some buzz right now is Quigo. By mixing technology with a new model that combines contextual ad placement with categories such as travel, it claims it is creating an even higher level of relevancy. The underlying logic seems good. For example, if you are a cruise ship operator, do you want your ad on a recipe site where there is mention of a recipe found during someone's travels to Spain , or a travel site talking about all the wonderful things one can do if one travels to Spain? Neither site is a bad place to advertise, but from a clickthrough perspective, the cruise ship company is likely to do better on the travel site.

Some theorists are going further, suggesting that advertisers could place their ads at a central location, and publishers would select what ads to place on their sites. Presumably, they would select the ads most relevant to their audiences in order to maximize clickthroughs, and thus their own revenue. A nice side benefit is that publishers would have complete control over what appears on their sites.

That's an interesting peek into the future, but what about today? My contention is that publishers can't come out winners in the current game of contextual advertising. Here's my reasoning, excerpted from my June speech at the Canadian Business Press annual conference:

Some of us are already engaged in a form of self-abuse by allowing contextual advertising on our sites. The rationale for a publisher to accept advertising from a search engine is simple and seductive: some money from advertisers you'd never sell anyway is better than no money. Some publishers are already reporting nice monthly checks rolling in -- with no work at all. What's not to like? After all, aren't you the clever one for turning the search engines into ad sales reps for you?

Yet what would you say if an independent sales rep came to you and made this proposition:

I want you to give me space in your publication, and by the way, I'm looking for good positions, maybe even your home page

I'll sell ads into that space, and keep the lion's share of the revenue

I won't specifically chase your advertisers, but if they should come to me, tough on you

I'll sell using a whole different pricing approach than you use, which may turn out to be a cheaper rate than you offer your advertisers

I'll essentially be the judge of who advertises what on your site, without regard to your brand or your market position

I'll be building a huge syndicate, so you'll always need me more than I need you

I will be telling the advertising community, day in and day out, that my approach to advertising is far superior to yours

How long would that rep be in your office? Probably just long enough for you to stop laughing. Yet when Google talks, we listen.

Contextual advertising may in fact be clever and beneficial if most of your revenue doesn't come from advertising. But if you generate the bulk of your revenue from advertising, you need to be afraid -- very afraid -- of contextual advertising. Let's go back to that rationale I mentioned earlier: you're getting some money from advertisers you'd never sell anyway. Actually, that was the rationale for going with some of the old syndicated advertising services like DoubleClick. They sold massive traffic in broad categories to marketers of broad-appeal consumer products. That is indeed free money for any specialized publication. But if you publish a magazine for, say, the machine tool industry, and a contextual ad appears on your site based on the keywords "NC simulation," that's your advertiser -- or it should be -- meaning the search engine supplying that ad is competing with you and you're helping them do it. Let me say it another way: by definition and design, contextual advertising is competitive with your own advertising sales efforts.

The future of contextual advertising might be a lot friendlier to publishers, but for now, fear and loathing appear to be the correct response.

Just weeks after noting the newspaper industry's on-again off-again love affair with yellow pages, I see an announcement by Hearst that it's acquiring White Directories, one of the nation’s largest independent yellow pages publishers, and that White will become part of the Hearst newspaper group.

Is this a case of another newspaper publisher getting an expensive and painful lesson that local ad sales expertise and local directory ad sales expertise are not synonymous? Perhaps not. I spent some time flipping between a list of markets served by White and markets served by the Hearst newspapers, and found very little overlap. What we probably have here is Hearst making an investment in a growing and dependable stream of profits, just like the bevy of private equity funds that have discovered the yellow pages industry over the past few years.

So why don’t newspapers and directories mix?

The primary problem is that directory salespeople aren’t like other salespeople, and I offer that observation as high praise. There was a time when it was widely believed that yellow pages salespeople, particularly those with the benefit of Donnelley sales training, were among the best salespeople in the media business. But that’s not the same as saying they could sell any medium equally well. Directory salespeople are indeed a breed apart, and the general experience to date is that they don’t do well selling other forms of media. It's not for lack of yellow pages publishers trying to make it so. Part of this is a natural salesperson’s tendency to focus on what they know best and are making money at today.

But the larger issue is that the directory sale is almost totally opposite to the sale of most other media. With yellow pages you sell retention, discovery, saturation distribution and response. Add in an annual frequency and rates so high they have to be expressed in terms of the monthly cost, and you can easily see the challenge. Yellow pages salespeople can't sell newspaper ads, and newspaper people can't sell yellow pages ads. That’s why the potential sales synergy that looks good on paper has never worked in reality.

Consider too the cultural divide. Newspapers provide important news and have a strong and proud journalistic tradition. They sell subscriptions and they sell advertising. Yellow pages sell advertising and give their publications away. In the yellow pages business, the advertising is the content. That’s simple to say, but hard to absorb, particularly if you grew up in the newspaper business. Add into the mix that yellow pages and newspapers have different pre-press needs, are manufactured differently and distributed differently, and you knock out loads more potential synergy.

Finally, there is the "grass is greener" issue. When newspapers look enviously at yellow pages, they look at the market leaders, the Verizons of the world. But when they finally take the plunge and buy yellow pages, they buy independents, the scrappy competitors, the "we try harder" publishers. Nothing wrong with that, as these independents can be both large and profitable. But what it does mean is even more emphasis on advertising sales in a highly competitive, take no prisoners environment. That can be a real eye-opener for newspapers, many of which operate with effectively no competition.

Does yellow pages make great media investment vehicles? Yes. Should they be acquired by newspapers to build "a highly synergistic, integrated local media advertising platform" (I just made this up, but doesn't it sound so ... plausible?). No.

ENUM, an initiative we first reported on in March 2001, seems to be finally picking up steam. Originally spearheaded by VeriSign and Telcordia Technologies , the initiative attempts to bridge the Internet, Phones, Fax and Wireless with a single contact address -- your phone number. The UK Government is seriously involved in efforts to stimulate the growth of ENUM in the United Kingdom , adding to a general endorsement of ENUM by the U.S. Department of Commerce last year.
In essence, ENUM is a distributed database that translates telephone numbers to IP addresses, which means that phone numbers could be used in place of, or in addition to, domain names. Currently, when you enter www.infocommercereport.com into your browser, Domain Name Servers (DNS) perform a lookup up on that name, find that it is associated with a specific IP address, and take your browser there. ENUM works identically, and is actually integrated into the existing DNS infrastructure.

Interestingly, ENUM can do more than a one-to-one translation to an IP address. It can also link to email addresses, instant messaging identities and cell phone numbers. It's also important to note that ENUM is designed to be queried by machines as well as humans, meaning that all sorts of interesting applications to perform seamless communications are likely to emerge, not the least of which might be streamlining voice over IP (VoIP) call connection.

A lot of governments seem excited about ENUM as a way to bridge the wired phone network with the Internet. Needless to say, the usual suspects in the domain registration space are all circled around ENUM, hoping to become the central registration, and hoping to tap into all the associated registration fees.

Fees? Well, somebody has to pay for all this somehow, and the current notion seems to be to use the existing model for domain registration. And with all those millions of consumers out there hankering for ENUM, revenues could be huge.

Consumers? Hankering? Here we go again. Develop a new technology, and everybody immediately assumes a consumer market exists, primarily because they want a consumer market to exist. After all, there are far more consumers than businesses out there. Businesses want to be contacted, and they want to make the contact process as simple as possible. Is the same true of consumers? Will millions of them rush out to link and expose all their electronic contact data in a searchable public database? I suspect that caution will figure into this at some point.

As to hankering, I have to ask, just as I did with the national cell phone directory: does the market really want this? It's a huge issue, because not just revenue is at stake, but the ability to achieve a critical mass of listings, without which nobody will bother to use ENUM, and the whole initiative will collapse. Too much ambition and greed too early means the almost certain death of ENUM.

Governments are behind ENUM in the general belief that it will lead to technological progress, and hey, they're not paying for it (and they may well tax it). The big companies involved in ENUM see big profit opportunities, although ENUM has all the characteristics of technology in search of an application. And unlike directory assistance and the white pages, there's no opportunity to impose "unlisted number" fees because the database does not exist, and it depends on consumers to populate it.

It will be interesting to see how ENUM evolves, but in my opinion, success will depend on scaling it down before ramping it up.

Google, not being content merely indexing all the free content in the world, has just announced the introduction of Google Print, a new service designed to index the full text of books. Since books are rarely plopped onto the Web in full form free for the taking, Google is now actively striking deals with book publishers for access to the contents of their books. Most significant of all: Google won't give away the full contents of the books it indexes. Rather, it will show only a few pages of the book to show the user's search term in context. If the user wants more, Google will provide links to online retailers where users can buy the book. Yes, Google is now supporting and facilitating the sale of content! This is huge.

Consider the possibilities: subscription-based database and directory publishers can use this new service to merchandise their products and develop direct online sales. This approach, adapted properly to the special issues of database publishers, could prove significantly more powerful as a sales tool than buying search terms. Since Google wants to aggressively grow this new area, it's also likely to remain free for some time.

Initially, Google says it wants to provide online purchasing links to online book retailers such as Amazon. My guess is that this is a temporary gambit because Google doesn't want to look like it's trying to compete with Amazon. While I don't see Google getting into online bookselling, what seems inevitable to me is that Google will ultimately offer links direct to publishers, for a fee, so that participating publishers can sell directly. That's critical for serials publishers, who need to capture the customer's name and address to generate renewal sales. The only way to get this information is to cut the book retailer out of the picture, and Google's platform could make this happen. By the way, Google Print could be a boon to the e-book business, because if you've found a book through a Web search, my guess is you want to get your hands on it sooner rather than later, and e-books provide that through instant downloads.

I've always liked the integration of paid content with free content via search. I first saw it with the old Northern Light service many years ago, and it seems to be coming back into fashion again. You can argue about the best ways to co-mingle free and paid content, but everybody seems to agree that overall it's a good idea.

To my mind, the best part about co-mingling free and paid content is that it offers a constant if subtle reminder to search engine users that not all content is free. The most damaging aspect of the big search engines is that they have inadvertently created a perception that they offer most if not all of the information in the world for free. Those of us who sell content have all been hurt by this. That the biggest search engine of them all will soon start including and merchandising paid content is absolutely a good thing. To the extent we can use it to better sell our own products it's an even better thing.

I must say I am enormously impressed with my initial experience with the new Google Desktop tool which creates a miniature search engine on my local computer. I was stunned at how easy it is to locate information on my hard drive, including items I had lost, forgotten, and even some I thought I had erased.

To download this remarkable and free new tool, simply go to http://desktop.google.com and you’ll be just a few mouse clicks away from installing it on your hard drive. The installation is one of the smoothest and easiest I have ever experienced. This is due in large part to the compact size of the software. Once installed, the application fires itself up, and immediately starts indexing your hard drive, including all documents, emails, notes, presentations. In fact, Google Desktop will also archive and index all your Instant Message exchanges. My only disappointment so far was learning that it doesn’t index the contents of PDF files. "Our goal is to have it behave like a photographic memory for your computer," said Marissa Mayer, Google's director of consumer Web products. That’s a laudable goal, but when exact copies of things start getting made, copyright questions immediately start to surface.

I say this because in addition to indexing your own information on your computer, Google Desktop also stores and indexes an exact copy of every Web page you visit. This could arguably put the user in violation of copyright law as well as violating the terms of use conditions of some sites. "Fair use," the common defense against claims of copyright infringement, is a bit murky and often in the eye of the beholder. The same holds true for users of paid access subscription sites (Web pages delivered with SSL encryption can also be indexed by Google Desktop by the way). One possible nightmare scenario: a user purchases one-day access to a content site, and uses the Google Desktop to capture huge amounts of information, all automatically indexed for easy future retrieval. Further compounding the issue is that Google Desktop is integrated into your Web browser, blurring the lines not only between personal and Web-based content, but where that content resides, and the ownership of that content as well. Yes, you can engage in serious content piracy without Google Desktop. My point is that it's just gotten significantly easier, and some people may end up doing it without even realizing it.

Google certainly didn’t create this problem: other desktop indexing tools already exist (and you can count on a lot more in the near future), but it is taking it to a new level by making the capture of Web-based data automatic, seamless and essentially invisible to the user. And it’s one more encroachment to which content producers will need to remain alert.

The USC Annenberg School ' s Center for the Digital Future has just released results of a nationwide survey in year four of an ambitious ten year project to monitor how the Internet is influencing all aspects of American life. A noteworthy finding was that users are at last acknowledging that not all online information is created equal.

For the second year in a row, the study found a decline in the number of users who believe that "most information on the Web is reliable and accurate." The figure is now down to 48.8%. The number of users who believe that "only about half the information on the Web is reliable and accurate" continues to grow, and now stands at 41.5%.

How do users determine quality? The answer in a word appears to be "brand." Users consistently rated the information quality of "established media" and government Web sites higher than Web sites of individuals (which I read to include small and unknown media sites as well). According to the study, 62.1% of users believe that established media Web sites are "mostly reliable and accurate" and 56.5% of users believe that government Web sites are "mostly reliable and accurate." The percentages rise even higher when the study looks only at users who've been using the Web for a number of years.

I've suggested for several years now that there would ultimately be a "flight to quality" as users began to realize how much inaccurate, outdated, incomplete and biased information exists the Web, and that this shift would primarily benefit those established publishers with a reputation for providing quality data. These data suggest that this important and very positive shift is already underway.

Detailed data from this survey can be found at: www.digitalcenter.org

BellSouth Advertising and Publishing, the yellow pages arm of BellSouth, has announced that it has become an authorized agent for Google, and will market Google paid search programs through its vaunted 2,000 person strong sales force.

BellSouth and other yellow pages publishers such as Dex Media had previously created Web advertising bundles that they had been offering to their customers. These bundles consisted of various combinations of Web site hosting, Web site design, and entry-level paid search programs. However, this move by BellSouth greatly changes the playing field. It also appears to be an admission by BellSouth that paid search has become more than an optional add-on, and that search engine advertising is as compelling to advertisers as its own online yellow pages offering.

This deal also suggests some recognition by Google that to crack the potentially huge market for local advertising, it needs feet on the street, and that its self-service approach to sales and customer service fails to cut it with smaller and less sophisticated advertisers.

Can this marriage work? For BellSouth salespeople to successfully sell Google paid search programs in conjunction with print and online yellow pages, they're going to have deal with some sticky questions: Does Google replace the need for my online yellow pages advertising? How much of my yellow pages budget should I allocate now to Google? How come Google offers pay-for-performance pricing and you don't? One thing that is certain is that smaller advertisers are much more likely to re-allocate their existing ad budget to participate in Google than find new dollars to participate in Google. That means a real risk of revenue loss for BellSouth.

It's also important to remember that while corporate executives can make all the plans and sign all the deals they want, if the sales force doesn't buy in, they will not succeed. What kinds of things does yellow pages sale organization like? Simple, quick, easy, add-on sales that in no way jeopardize their existing revenue or commissions. The Google deal fails all these criteria.

My prediction: the BellSouth sales force will ultimately submarine this deal. Google will end up no worse for wear, and BellSouth will realize that repping their competition is not in their best interest. I'd also like to reiterate that what really may be making paid search so attractive is its pay-for-performance model. If so, BellSouth may want to take a look at Verizon's deal with FindWhat as perhaps a better path.

With the ink still dry on its wacky deal to sell online advertising for Google, BellSouth has topped itself by announcing an Internet yellow pages joint venture with SBC Communications. And if that isn't enough, the new joint venture has announced that it is finalizing a deal to acquire Internet start-up YellowPages.com. The dust hasn't settled sufficiently to know if the new joint venture will also be selling online advertising for Google, but hey, why not?

What's going on here? Great question. Having had limited success selling to their own home markets, these two regional giants will combine forces so that they can enjoy limited success selling online advertising in their combined home markets. The press release announcing the joint venture proudly notes that it will have "50 million monthly consumer searches, giving advertisers increased traffic." Actually, the new joint venture's Web site will certainly get increased traffic, but the local auto body shop in Macon, Georgia isn't likely to, and therein lies the rub: yellow pages owes all it success to advertising from local businesses serving local markets.

The big yellow pages publishers have always been long on cash and ambition and short on creativity. That's why it's not all that surprising that when they want some fresh new ideas, they pull out their checkbooks and buy some. In this case, the fresh ideas are being supplied by YellowPages.com, a seven-year old Internet start-up, which is being acquired for possibly as much as $150 million, according to some press reports. Do the math: even yellow pages publishers wouldn’t pay that much for a domain name. What they’re really trying to buy is a clue.

This week technology media juggernaut TechTarget announced that it's launching CIO Decisions, a new print magazine with a circulation of 60,000, targeted at senior-level information technology executives in mid-market companies.This will be the third print magazine published by TechTarget, which started life as a Web-based publisher serving information technology professionals, a group that by now you would think would want to receive all information digitally.

Also this week, the British Computer Society , another large group of information technology professionals. released the results of an extensive survey of its membership that found that members preferred to receive the Society's magazine, Computer Bulletin, in print format.What's noteworthy is that an audience so comfortable with technology still has an appetite for print, and that publishers are still willing if not eager to support that appetite. Perhaps it's a reaction on both sides to the problem of noise.

For subscribers, so much is flying by them so quickly in electronic form that it's difficult to keep up. The print format allows them to read where and when they choose, when they can best focus. For content that isn't time-sensitive, this makes a lot of sense.For publishers, launching a new Web-based publication means immediate competition with large numbers of competing Web sites, blogs and email newsletters. In print, the number of competitors is dramatically reduced, and with the reduced amount of postal mail being sent, a print publication can make a big impact fast.The British Computer Society study also found that members did want to receive certain things electronically, such as breaking news and job-critical articles, and they looked to the Society's Web site as a reference archive and member bulletin board.All this suggests that publishing in both print and online formats can actually offer competitive advantages, provided that publishers recognize that the optimal mix of formats will continue to change, and be ready to react quickly. It also suggests how dangerous it can be to ever assume we know what our customers want.

If level of press coverage is a reliable indicator, radio frequency identification (RFID) technology is poised to become the "next big thing."

What is RFID and why does it matter? RFID technology is deployed through tags that can be thought of like bar codes with little radio transmitters attached. More precisely, they are relatively inexpensive, paper-thin computer chips that can contain manufacturer codes, product codes and serial numbers and can broadcast this information to nearby receivers. RFID tags could revolutionize the tracking and counting of equipment and inventory, and therefore have potential applications in almost every industry. The first widespread rollouts of RFID are about to begin, and where there are products and inventory, there are (or should be) electronic buying guides and marketplaces.

Another important aspect of RFID tags is that the information on them has to be meaningful globally, and that means coordination, which means databases. The big winner to date is Verisign, which scooped up a contract to maintain the primary databases of companies and their products and ship that data rapidly around the world (RFID is designed to allow trading partners to exchange all sorts of product information on a real time basis). However, ICR believes that Verisign sees its biggest opportunity long-term in the movement of the data, not the data itself. That leaves manufacturers or their agents (industry database publishers, anyone?) to upload and maintain the product information.

Further, while the RFID specification provides for a globally standardized company numbering system, it anticipates that vertical industries will use existing product identification systems or create them. Thus, the book publishing industry will likely embed existing ISBN numbers into RFID tags, and the food industry will use UPC codes. Opportunities abound in those industries lacking such standard product identification schemes.

It seems every industry has its own exciting ideas of how to take advantage of RFID technology. The pharmaceutical industry wants to label all prescription drugs with RFID tags containing individual product serial numbers as a way to combat theft and counterfeiting. Almost every industry seems to see inventory applications, as merchandise can broadcast its arrival at the warehouse door, and its departure at the store's main entrance, all without human intervention. Wal-Mart has already announced that it will mandate use of RFID tags by its largest suppliers beginning in January 2005.

One of the most adrenaline-charged corners of the Internet during the dot com boom was occupied by electronic marketplaces. At their peak, over 1,000 of them existed, mostly in B2B verticals. By some estimates, fewer than 100 of them survive today, and the most successful of them are B2C marketplaces.

Electronic marketplaces are important to buying guide publishers because not much separates the two. Indeed, marketplaces offer a logical evolutionary path for buying guides because they support infocommerce precepts of business process integration and adding value by increasing user productivity. Most tantalizing of all, marketplaces hold the promise of transactional revenues, which can far exceed advertising and subscription revenues. It’s the right destination, but the road to this promised land has been a rocky one. (think IndustryNet – ahead of its time and VerticalNet – out of its mind).

Why are consumer marketplaces flourishing while B2B marketplaces struggle? There are three primary reasons. First, consumer marketplaces are a totally new concept, and compete only marginally with local yard sales and flea markets. They’re asking users to do something new, not change their established habits. B2B marketplaces, by contrast, are rigid and highly structured, and often require substantial changes in how users conduct their business. Second, it’s easier to achieve liquidity with consumer marketplaces – enough buyers and sellers to produce satisfactory outcomes on both sides. B2B marketplaces, by contrast, often need fantastically high levels of industry participation to achieve liquidity, and most fail before to achieve it. Third, consumer marketplaces are a borderline form of entertainment. They tend to be the electronic equivalent of noisy bazaars, with personality, pictures, and generally low price-low risk transactions. B2B marketplaces are more typically designed for the “rational” business buyer, so content is factual, quantitative and so uniform that computers can make purchasing decisions – and indeed some B2B marketplaces were designed with exactly that objective. So it’s no wonder that humans have been slow to embrace them.

The most important trend in consumer marketplaces is that they now are moving from the spot market, auction model to more conventional storefronts, where specific merchandise is dependably available at any time. In a sense, they are morphing from flea markets, where you never know what’s on sale, to shopping centers, where you go because you know exactly what you’ll find. This is a significant evolution and one that is now being adapted by business-oriented marketplaces (think eBay Business). With the organization of large collections of vendors in one place with common front-end interfaces for product discovery and ordering, we’re seeing the next-generation of buying guides, and they will present a formidable challenge. For buying guide publishers, the time for pre-emptive moves is now.

CitySearch, producer of online consumer city guides (and a subsidiary of InfoCommerce Group's latest favorite, InterActive Corporation), has raised eyebrows with its announcement that it will be offering advertisers a pay-per-call option, in addition to its existing pay-per-click programs. Pay-per-call is analogous to pay-per-click, but the mechanism for capturing and measuring ad effectiveness is phone response rather than clickthroughs. Advertisers run a special number in their online advertisements, each call is tracked by the service provider, and the advertiser pays based on the number of calls received.What's going on? What we're seeing is increasingly explicit acknowledgement that -- gasp -- clickthroughs are not the same as sales. The great irony here is that the place where pay-per-click advertising apparently doesn't resonate is among smaller, local advertisers, so-called "unsophisticated advertisers" who view pay-per-click as buying increased traffic, not increased business. CitySearch believes, and we concur, that, when it comes to pay for performance, it's a lot easier to prove the value of, and charge for, forwarded phone calls than anonymous clicks. And while it may seem hard to believe, a large percentage of businesses still don't have Web sites, but pay-per-call can work for these companies, while pay-per-click can't. Pay-per-call combines the best of two worlds - the increased reach of the online media, the traditional measurability of direct response and the siren song of "pay for performance." And it proves the significant benefits of viewing old world and new world marketing channels as complementary rather than competing.While the CitySearch embrace of pay-per-call is significant, real credit for this important development properly goes to FindWhat, which launched the concept back in September. FindWhat is working in partnership with technology provider Ingenio; CitySearch is using technology from CIRXIT. This new technology is already hard at work chasing the huge B2C market, though we would contend the opportunities are just as big in B2B. Unlike the consumer market, B2B buyers are not known for purchasing machine tools, overhead cranes and printing presses through online shopping carts. B2B purchases are typically more complex, with longer sales cycles. At some point the buyer usually picks up the phone to call the seller. That's why showing true return on investment is so difficult for those selling pay-per-click programs to B2B companies. A pay-per-call capability is a much more apt and convincing selling tool for B2B publishers.So keep your eye on pay-per-call. For B2B buying guide publishers, this is one killer app that can actually live up to its promise

By now, you should be familiar with the term "click fraud" which refers to the act of repeatedly clicking on paid search links to either fraudulently make money, or to create an expense for those you don't like (such as a competitor).

We've addressed click fraud in columns past, citing the investigative news stories coming out of India suggesting that there are sizable organizations in place that exist solely for the purpose of committing click fraud. Click fraud is an important development for B2B publishers to be aware of. Most don't employ the pay-per-click business model, and thus their advertisers can't fall victim to click fraud, an advantage that many B2B publishers should be quick to emphasize to prospective advertisers.

But how big is click fraud really? It's getting a lot of attention lately, but how prevalent is it?. Reliable statistics on illegal activities like this don't exist, and the search engines have all been taking steps to implement technological solutions to reduce click fraud. So is click fraud a tempest in a teapot? We were starting to think so, until we saw this stunning quote from George Reyes, Google's CFO, speaking at a major investment conference hosted by CSFB this week:

"I think something has to be done about [click fraud] really, really quickly, because I think, potentially, it threatens our business model."

As one insight into the size of the problem, Jessie Stricchiola, the president of Alchemist Media, a paid search consulting firm, told CNN that she estimates that as much as 20 percent of all clicks on paid search ads are fraudulent, and she contends that not all search engines have been as aggressive as they could be about combating click fraud. Of Google she noted, "Google has been the most stubborn and the least willing to cooperate with advertisers" that complain about click fraud.

Published reports indicate that click fraud was a primary topic of conversation at recent conferences sponsored by Jupiter and Majestic Research as well. There are now open discussions in investment circles about how exposed the major search engines may be with regard to click fraud, and some analysts are even suggesting a close watch on companies such as eBay and Amazon, which are heavy buyers of paid search, and thus have a greater exposure to fraud.

In our view, click fraud is simply one more illustration of what continues to be most problematic about "pay for performance" advertising: it looks great as long as you don't look too closely. Yes, search engines only get paid if they perform, but for most B2B marketers, "performance" means having traffic shipped to their sites. If that's all you want, great. But if you're depending on paid search for qualified leads or sales, maybe it's performing, maybe it's not. Nobody really knows for sure. And even if the search engines are able to wipe out the scourge of click fraud, they remain resistant to looking too closely at the remaining legitimate clicks they generate for advertisers. To the search engines, all clicks are created equal, and they need it to stay that way. Because if it becomes clear that not all clicks are of equal value and quality to the advertiser, guess what? Advertisers will want to pay less for all clicks, or only pay for the best quality clicks. Either scenario is bad news for the search engines, for whom your ignorance is their bliss.

An article in a recent issue of DM News by Meg Weaver, founder of Wooden Horse Publishing which produces a database covering the magazine industry, concludes that magazine publishers have hit a wall in terms of subscribers, and that the numbers are in significant decline. As she phrases it, this is "... a dirty little secret the magazine industry doesn't want you to know: We have run out of readers in this country."

To document this claim, Weaver cites her analysis of Audit Bureau of Circulation numbers. By looking at cumulative circulations of all audited ABC publications, she notes that the industry grew consistently in terms of circulation until 1990, when things began to plateau at 366 million. The 2003 number? A cumulative circulation of 353 million. Weaver attributes this primarily to uncreative "me too" publishing practices in the magazine industry, which leaves the industry in a position of continuously poaching subscribers from each other rather than creating innovative new magazines that would attract net new subscribers.

But is this the full story? My first concern was reliance on ABC circulation numbers, since ABC is favored mostly by consumer publications. Further, ABC provides circulation numbers only on its membership, and that creates a sample biased towards larger publications that need circulation audits.

My sense is that the story, which probably does begin around 1990, is far more nuanced. What we've seen over the last 15 years is an explosion in the number of increasingly specialized magazine titles, some with circulations in the low thousands. We've also seen increasing amounts of information delivered via the Web, faster, fresher, more accessible and often even more specialized than the most specialized print publications. In short, information is proliferating, and as a result, audiences are fragmenting as they increasingly move to access only the information of most interest to them, shutting out a lot of more general information sources in the process.

We're now in an era of extreme specialization. Subscribers are getting used to mixing, matching and filtering content. And as they read less, and focus most on topics they care most about, guess what? You need to keep up with them editorially, because these empowered readers want depth and substance, and they know immediately when they're not getting it.

This shift has implications for data publishers too, because our businesses are being forced to address the same trends. What was "good enough" in terms of editorial quality isn't good enough any more. The data that our subscribers choose to receive gets scrutinized as never before, by increasingly expert eyes. It's a tough new standard to meet, but there is ample evidence that if you can deliver good quality editorial, there will be an audience willing to pay for it.

Publishers, hold onto your hats and grab your digital cameras: it's looking like the next big battleground in the directory world is going to be visual.

All of a sudden, photos of businesses and buildings are red hot and getting lots of attention. Several months ago, infoUSA announced it had dusted off its mothballed project to photograph every business in America, and would be adding photos to several of its products, including its beefed-up business credit reports. CoStar, producer of a national commercial real estate databases, has a fleet of trucks running around the country snapping shots of every office building. Now, Amazon.com's new search engine, A9, is generating big buzz with a yellow pages directory with photos of businesses. And, rising above them all is GlobeXplorer (a 2004 InfoCommerce Model of Excellence), which offers aerial photos of America and which are being integrated into several business database products.

Why pictures? Let's face it: directory and databases are very useful, but very useful is not always the same as very interesting. Adding photos makes a database more interesting. In some applications, a picture may well be worth a thousand words. In fields such as real estate, it's hard to conceive of a product without photos. Even in a credit report product, a photo of the business might provide valuable added insight.

But do photos add much to a yellow pages product? I took a quick spin through the A9 yellow pages to try to answer that question. When you do hit a photo of a business (and A9 only has coverage in selected areas right now), it's impressive. A9 offers you a series of snapshots around the business, so you can get a view of the whole street. In a great case of unintended product placement, more than a few of these photos seemed to be of UPS trucks parked at the curb and obscuring the storefront, but overall the project achieves one of A9's stated objectives, which is coolness.

The big question of course is "why?" Is the user better off for having access to these photos? A9 suggests photos help users more quickly get to stores by providing a visual cue in addition to the address. That's certainly valid (although the cost/benefit ratio seems a bit high), but there is a bigger issue. In many cases I would be staring at a well-composed photos of a business with no clue what it did beyond the general yellow pages category in which it was classified. Therein lies the rub: A9 is layering these neat and glitzy photos on top of a very weak dataset. Photos may distract users from the lack of information about the listed companies, but they don’t substitute for basic data.

A search for restaurants in downtown Philadelphia brought me lots of listings, all sporting name, address, phone and photos. Yet the photos, while novel and interesting, still don't tell me about cuisine, menu, hours, credit cards accepted, or any of the more mundane facts that are frankly more useful. When it comes to directories, photos without a strong underlying data record will never offer more than part of the picture.

I'm just back from the SIIA Information Industry summit, and it was refreshing to see so much enthusiasm in this industry again. Online advertising is back with a vengeance, and many in the room are predicting 20% to 80% growth in online ad revenues this year. And for the subscription-based publishers in the room, there seemed to be growing comfort with their products, and in how to market effectively to ever more demanding customers. And all this wasn't just my sense: more than a few speakers and attendees were noting that "it feels like 1998 again."

The only disturbing note was the seeming appetite to address the growing cost and complexity of data compilation by simply skipping the hard stuff. What I mean by this is that there is a lot of activity around the idea of essentially automating the editorial function. Halsey Minor created some buzz when during his luncheon talk he mused about the possibility of building services such as CNET without editors. We heard from companies whose entire businesses were based on re-packaging data gathered on the Web. In several conversations with publishers, it seemed that all of them were seeking opportunities for products that could be built largely, if not entirely, from Web-based data gathered on an automated basis. This thinking stands in stark contrast to one of the main themes I heard hammered home by speaker after speaker: success depends on adding value to your content and building content products that were not only useful, but unavailable elsewhere. Certainly, software is more powerful than ever, and there are examples of products built largely on an automated basis that offer real value. But when it comes to building database and directory products, I believe a lesson I learned early on still holds: if the data you need for your product is easy to collect, your new product is probably a lot less valuable than you think. Re-formatting readily available data or adding a few additional data elements rarely yields "must have" data products, particularly in today's demanding environment. Just as important to remember, if you can get your hands on the raw data easily, so can your competitors. And the software you developed to create your automated product? Every single day, application development tools are becoming cheaper and more powerful, meaning that your "proprietary software" offers little competitive protection either. While you can light up a data publisher's eyes at the thought of eliminating phone calls, faxes and mail, and possibly even eliminating human editors altogether, what we're really seeing is a re-emergence of the perpetual motion machine fallacy on the late 1980's, where a number of half-baked schemes were launched where the database was supposed to somehow maintain itself, the product would be shipped automatically, and the publisher's primary responsibility became checking his daily bank balance from the beach. If only! I am very excited by the potential of data mining tools and user self-updating, and all the wonderful things that can be done by applying software to the wealth of data available on the Web. But I'm concerned by our blind rush towards the world envisioned by computer industry visionary Bill Joy where "the future does not need us." Let's not be too eager to disconnect data quality from human effort just yet. Instead, let's recognize that the human editorial function, which by the way allows us to address the sizable base of businesses that still have no Web presence, is fundamental to the creation of the value added products we need to produce in order to succeed and thrive in the years ahead.

I remain amazed at the number of database publishers, particularly those chasing B2C markets for the first time, who haven't seen fit to make their heading structures as friendly as possible to a wide range of audiences.

Consider health sites that offer consumers physician specialties such as "Otolaryngologist." Or legal sites offering categories such as "admiralty law." Or a food ingredients directory with a category for "EVOO" (that's Extra Virgin Olive Oil in case you were wondering).

Technical terms and acronyms may be acceptable as categories in a trade directory (and I say "may" because even within a specialized field, not everyone has the same level of knowledge and expertise), but they're major roadblocks when trying to woo outsiders -- in these cases, consumers.

Kudos then to UK yellow pages publishers Yell, for recently introducing alternate headings based on regional dialects, in recognition that descriptive terms in common use are often not the formal term.

Taxonomies also need to account for common misspellings. One industrial directory found by an analysis of its searches that large numbers of users never got to its category for "throughbolts" because they were typing "thrubolts."

Too much effort you say? Like it or not, we all now operate in a "satisfy them or lose them" environment. Anticipating how users will search for information results in more hits, and more satisfaction. The smartest publishers I know all log and regularly review user searches that generate zero results as a simple way to identify problems. When your site allows users to search your heading structure using free text, such reviews are even more important.

The more paths you can provide to get to your data, the more satisfied users will be and the more successful you will be. When it comes to database taxonomies, if your terminology is correct, and the user's terminology is wrong, then you're wrong too.

When we coined the term "infocommerce" way back in 1999, it was meant to express our belief that information content needed to be linked with software and become increasingly integrated into the business processes of our customers. This would go far beyond assuring high renewal rates. It would drive customer demand for better and deeper data, for which publishers would be able to charge premium prices, with all this data now integral to the basic operation of client companies. We saw this as a very attractive vision of the future, but at the time it really was in the realm of theory.

Over the past few years, we've seen these precepts of infocommerce become part of mainstream thinking in the industry, with more and more publishers talking about delivering high value data as continuous data feeds, and finding ways to embed themselves into the workflow, systems and processes of their customers. But while more of us are "talking the talk," still only a handful of us are "walking the walk."

That's why it is so nice to hear a top executive at leading company demonstrating that they not only see the future, but are making serious strides to re-position their companies accordingly. Nancy McKinstry, chairman of Wolter Kluwer's executive board, told the audience at the recent DeSilva & Phillips conference that it was the goal of Wolters Kluwer to move beyond providing their customers with information to read in favor of finding ways to "embed our content in what our customers do." And in a dramatic illustration of their commitment to this goal, McKinstry noted that the company now devotes as much effort to creating software as it does to creating content and has already reached the point where "we have as many programmers as we do editors."

That's a dramatic statement for a publisher to make, but it reflects the reality that our business is changing profoundly. Reference data has traditionally been standalone and passive, and that constrained both its utility and its value. Need to find something in the old days? You'd stop what you were doing, look it up, and then go back to what you were doing, often cutting and pasting or re-entering the reference data you had found. That's not efficient or productive or easy, which means that a lot of directories and databases became place of last resort, destroying their value. Information that is used frequently and valued highly is information that is integrated into the daily work of the customer, if not driving the daily work of the customer.

We've all talked about the desirability of owning "must have" information. This new environment allows us to get to that goal more easily than ever before, but we've got to see the vision, and make the necessary investment to adapt our products now. Those who do will find themselves with even better businesses than they ever thought possible. Those who don't will end up as roadkill on the information highway.

We're pleased to announce our first Models of Excellence award for 2005 has been awarded to Primary Intelligence for its Account Profile product.

For a handy reference to Models of Excellence winners for 2005 and years past, please visit our awards page for the complete lists and full details.

Just yesterday, VNU's European arm announced a deal with NewsGator to distribute a bundled offering of the NewsGator RSS reader and VNU's business content covering the information technology industry.

Why is this significant? Because I think RSS feeds are potentially very important, and very good news for business publishers, including data publishers. RSS feeds are simply content sent by publishers in a standard XML format to users. Users read RSS feeds with newsreader software such as the product offered by NewsGator. RSS feeds are commonly associated with blogs. There are two ways to view a blog. You can visit the blog just as you would any other Web site, or you can have new blog entries sent to you as RSS feeds. Every time the blog is updated, the new information is automatically sent to your newsreader and you are alerted.

What excites me is not the technology, which conceptually speaking is quite mundane. Rather, it's the potential of RSS as a new and powerful distribution channel. RSS feeds allow publishers to push content directly to the user's desktop, bypassing spam filters and a whole host of other hassles and delivery impediments.

That's why I have begun to think of RSS feeds as "trusted feeds." Users subscribing to RSS feeds are saying to publishers that they value, trust, and want or need this specific content, and they will pay attention to it upon arrival.

And dare I say it, the other reason RSS feeds are so powerful is that they represent push technology. Push technology has been discredited in the eyes of many because it has been so badly over-hyped in the past. But I increasingly believe the successful publishers of tomorrow must have a push aspect to their product. It's simply the only way to engage your attention-deprived users in a value-added way that doesn't offend. I would even go so far as to say that the surprising resiliency of print publications is due largely to the fact they push content to users, a different form of trusted feed if you will. RSS feeds aren't only for blogs and news stories. They are equally adaptable to pushing out new listings and other event-driven data. This kind of continuous customer connection is crucial these days as more and more publishers find that it's actually easier to sell a subscription than it is to get a subscriber to use a subscription. And if they don't use it, they won't renew it. Staying visible with your subscribers is essential. RSS feeds provide a low-cost and increasingly popular way to do this. With RSS feeds, the medium is very much the message.

It's been an interesting week in the world of pay-per-click. First there was the big New York Times article on click fraud, which gently concluded that the search engines will ultimately extinguish it, so paid search marketers can rest easy. Then, click fraud was the topic of a lively session at the huge Search Engine Strategies conference, where nobody seemed to think that the problem of click fraud would disappear anytime soon.

There also was the article in Business Week suggesting Google might just be a "one trick pony" given its near-total focus on paid search advertising. For good measure I'd throw in the announcement by the snap.com search engine that it is rolling out a "cost per action" advertising program that allows advertisers to tie payment to specific activities, such as downloading a white paper, registering or making a purchase. Keep in mind that while snap.com may be a small player, it's an Idealab company, and they're the people who invented paid search in the first place with a little company that later became Overture.

All this market discordance says to me that we're on the verge of a new generation of pay-per-click business models and tools that will reflect a better understanding by all parties as to what pay-per-click can and cannot deliver.

It's been my view that the phenomenal growth of pay-per-click has been fueled by hype and misunderstanding. Advertisers embraced pay-per-click because of its compelling COD -- cash on delivery -- premise which offered guaranteed results. Is it any surprise that advertisers flocked to it?

Despite their loose use of terminology, paid-per-click providers aren't really in the pay-per-performance business, at least as advertisers define it. These providers are selling traffic to their advertisers, with absolutely no guarantee that this traffic will turn into sales leads, purchases, or anything else for that matter. Stated another way, these providers are delivering what those in other media call advertising impressions, they just charge for them differently.

My sense of the market is that advertisers, sensitized by such issues as click fraud, are rapidly coming to realize that they've been buying impressions, not performance, and are now starting to demand real pay-for-performance that ties payment to specific, measurable and largely fraud-proof actions. Ultimately, what advertisers want, they get.

It's too early to say if this shift will be good news or bad news for data publishers, but it seems likely that this new clarity on the part of advertisers will work to level a playing field that had tilted much too far in favor of the search engines. Finally, everyone will truly get what they paid for, and that is a good thing.

While one could easily dismiss McGraw-Hill's acquisition of J.D. Power as a financial transaction given the seeming lack of fit with the various McGraw-Hill businesses, I'd suggest that this acquisition is a brilliant move, possibly in league with the 1966 acquisition of Standard & Poor's. Indeed, the two companies are similar in that both are strong and trusted brands that deliver needed, objective guidance in large and important markets.

And it exploits a trend we've been harping on for some time: the greatest need of both business and consumer buyers, all of whom are overloaded with information and starved for time, is objective third-party guidance in consistent, standardized form. We call it the "new 3R’s," -- ratings, rankings and recommendations, and J.D. Power is the embodiment of this type of high value information. McGraw-Hill has picked up one of the biggest names in one of the hottest segments of the information business, so the deal is already looking smart at this level.

Is it fair to call J.D. Power an information company? I think so. After all, its business is to gather, database and publish consumer opinions on a wide variety of products. If you call the gathering process "research," then you would regard J.D. Power as an awkward fit with McGraw-Hill. If you call this gathering process "compilation," then J.D. Power looks more like a database information company, and McGraw-Hill has a strong track record with that type of business. Admittedly the line is blurry, but I'd argue that the owner of the company can push it into one camp or the other.

So how does J.D. Power, a ratings database company fit with the existing McGraw-Hill empire? Think of how the Aviation Week Group could amplify its market dominance as the new source of data on passenger airline satisfaction, which it could extend worldwide. Think of how the Construction Group could leverage its position as the preeminent provider of residential and commercial builder and landlord satisfaction data. Think of the endless stream of valuable "best of" content for BusinessWeek. And perhaps the greatest opportunities of all could come from leveraging qualitative data from J.D. Power with quantitative data from Standard and Poor's that could lead to breathtaking new opportunities powered by two of the best-known and most trusted brands around. And none of these even addresses the possibilities inherent in the custom side of the J.D. Power business, where it helps businesses measure the satisfaction of their own customers.

What's the downside to this deal? Figuring out how to sort through and prioritize the endless array of new opportunities this acquisition offers. J.D. Power is a huge brand backed by a powerful data collection platform churning out some of the most sought-after content anywhere. In my opinion, J.D. Power has loaded the bases, and now McGraw-Hill is at bat. Watch out!

A major article in Wednesday's Wall Street Journal is suggesting that advertisers are beginning to balk at the rapidly escalating costs for keywords. The article cites examples such as "mortgage," which now goes for $7-11 per click, and "mesothelioma," a form of cancer caused by asbestos, which goes for $49. It also notes that eBay, one of the largest purchasers of keywords, is publicly complaining about high price levels. The article suggests that high prices, combined with growing awareness of click fraud, and the presence of middlemen, could cause a backlash that would curb the rapid growth of paid search revenue.

As Executive Editor Staci Kramer of PaidContent.org astutely notes, "The real lesson here: nascent also equals unpredictable, and overreaction in any direction can -- and will -- do damage." But marketing sloppiness exhibited by many keyword marketers is taking its toll as well. Increasingly in a product search, I'll find an eBay ad saying it's got what I'm looking for. When I click through to eBay, I frequently get the message "no items found matching your search term." Perhaps eBay thinks it is clever marketing to have dragged me to its site. My reaction, however, is that eBay just wasted my time, and I am sure to be less receptive to its keyword come-ons in the future.

It's not just eBay; a large number of online retailers seem to be buying keywords for products they don't sell, and brands they don't carry. The marketing objective appears to be to get me to their sites, even if under false pretenses. This game of traffic for traffic's sake turns the Web from a precision marketing tool into a mass medium. Run enough eyeballs past your site, and some of them will buy.

The paid search industry is beginning to realize just how crudely marketers are applying its very refined technology, undermining their real value proposition in the process. That's why they are starting to educate customers and give them tools to use keyword marketing correctly and productively. Credit FindWhat for helping lead the way by offering technology that shows how well clicks on ads convert to sales. FindWhat CEO Craig Pisaris-Henderson, who will be a keynote speaker at InfoCommerce 2005, believes better understanding of returns will ultimately encourage more spending on searches, but in a less speculative fashion. In a bold move to improve not only click analytics, but the overall quality of clicks, FindWhat removed a large number of marginal Web sites from its network a few months ago, making a big bet that as keyword marketers get smarter, the marketplace will reward those who can deliver higher quality clicks.

Step back a bit, and it's not hard to see that paid search marketing is going through an initial growth phase, complete with a gold rush mentality, lots of misinformation, and lots of money being wasted. But there are now signs that this phase is coming to an end, to be replaced by a new phase where savvier, more educated marketers will start using the technology in a much more sophisticated way. This will present new challenges for the big search engines, and create lots of lucrative opportunities for online publishers.

As I write this, we're putting the final touches on a new research report called Database Subscription Pricing Benchmarks, based on InfoCommerce Group's Subscription Price Index database. The SPI database allows us to examine how the marketplace has changed between 2000 and 2004, and that change is fascinating.

What's particularly noteworthy is the shift in attitudes in just four years. In 2000, publishers were being relentlessly pressured by a marketplace that honestly believed it could find anything it needed on the Web for free. With so many ill-fated Web start-ups, along with a lot of established publishers, indeed offering their content for free, the move toward a world of free content seemed inexorable. Needless to say, it wasn't a happy time for subscription-based publishers.

Those that continued to charge for their content were certainly in no position to seek premiums for their Web offerings, and the trend at the time was towards "parity pricing," with print and Web versions priced identically. Indeed, many publishers were having such difficulty with their sales that the idea of the bundled offering -- buy the print version, get the Web version for free -- became a marketing staple. This bundled offering neatly sums up the thinking at the time: I can't charge for my Web content, but I can give it away in order to spur sales of my print version, which is tangible and still has value.

But look at where we are now. By the end of 2004, the situation had flipped: publishers still market the bundled offering, but now it is buy the online version and get the print version for free. No difference in economics, but a huge difference in perception. Publishers have realized that the market is moving to the Web, so they are increasingly putting the emphasis on their online products. Even more importantly, people are increasingly willing to pay for Web-based information.

This change has reflected itself in pricing. Publishers are moving away from parity pricing to charging significantly more for their Web products, reflecting their inherently higher value. With solid evidence now that users both want Web products and are willing to pay for them, we're seeing more and more publishers starting to invest in their Web products, adding new features, functionality and content, which allows them to charge even more. It's a new virtuous circle: users are willing to pay more for higher quality Web products, spurring publishers to keep rolling out ever more sophisticated and powerful products. But while we stand at the threshold of a new golden age in database publishing, many would say it's been a long four years.

The New York Times this week noted a raft of new start-ups with names like Indeed.com, SimplyHired.com and WorkZoo.com, each offering job listings aggregated from the big job boards like Monster.com, CareerBuilder.com and HotJobs.com, as well as hundreds of smaller job sites. By now, the idea of aggregating other people's content is a fairly tired one, but in this area, it actually makes sense. It also portends real trouble.

Meta-search engines were perhaps among the first aggregators, and they flourished in the early days of the Web because at the time, all the major search engines were largely solo acts, and none even began to approach comprehensiveness. In that environment, a consolidated search of multiple search engines provided real benefits. Today, however, with the major search engines all providing much better coverage, and with many of them actually licensing their indexes to each other, the results are far more homogenous. Consequently, a meta-search engine such as DogPile.com doesn't yield you much more than you would get using Google directly. And with the major search engines working tirelessly to improve relevance of search results while also rolling out new features, meta-search simply feels far less compelling.

In the area of business content, the list of quality content suppliers is limited, and most were smart enough not to enter into exclusive deals with any one aggregator. As a result, the big business content aggregators began to look very similar in terms of content offered. That left them to compete on price, an unattractive way to do business, which is why they've largely shifted their strategy to focus on value-added tools.

But aggregation does actually make business sense in the area of job boards. This remains a balkanized market with lots of players of all shapes and sizes. Given the costs involved, it's a rare company that would place a job listing on more than one of the big job boards at a time. Relatively high costs have therefore allowed specialty and regional job boards to thrive, offering the benefits of more targeted markets and lower prices. Since job listings are scattered over a large number of both well-known and obscure job sites, this is a market ripe for aggregation, especially since the recent boom in online advertising provides a source of quick and easy revenue for these aggregators. Users of these aggregation sites get both comprehensiveness and convenience.

At the moment, the major job boards are regarding these aggregators as just added distribution for their listings. But, as other information providers have learned, as these aggregators grow and develop their own brands, the brands of the job boards will very likely get diminished as job hunters increasing tell employers they saw the job listing on, say, SimplyHired rather than Monster. And if history is any guide, as these aggregators grow more successful, there will be enormous pressure for at least a few of them to try to sell job listings directly. And if they've got the traffic, what's to stop them?

So, if I ran a major job board, I'd be far less sanguine about this new crop of companies. Because over time, aggregators become a source of aggravation for information providers. They get a free ride off our content, allowing them to build front-ends to original sources of information, and siphon off traffic from our own sites, with the potential to become competitors should they choose. That's why I suggest you keep your eyes peeled for aggregation activity in your market, especially if your content is involved. These free riders can put a real dent in your business.

A new study out from Jupiter Research suggests that as many as 39% of Internet users delete cookies from their machines at least once a month, and 58% of Internet users have deleted their cookies within the past year. This has significant consequences for online publishers, the majority of whom use cookies to generate some of the key metrics for their Web sites, including unique visitor counts, and number of returning visitors.

Cookies, for those of you not familiar with Web browser minutiae, are small computer files that Web sites can be programmed to download to the computer of everyone who visits them. These files usually contain a unique random number of some sort. The Web site can also check every visitor's computer to see if it has previously downloaded a cookie, and that's how it is determined if a visitor should be counted as unique, and if a visitor has visited previously. More sophisticated Web sites track how a visitor moves through the site by checking and recording the cookie for every Web page that is requested. In a one-to-one relationship between one user and one Web site, cookies are anonymous, harmless and useful.

Where cookies got a bad reputation is that some of the online ad networks figured out that they could plant their own cookies on user's computers, and then check for that cookie at every site in their network, allowing them to build a profile of a specific user's interests and surfing habits. The user might still be anonymous, but the ad network now has powerful information on what ads to target to that user. There's a fierce ongoing debate as to whether this is harmless, or some low-grade version of spyware, and with the growing awareness and concern over spyware, more users than ever are deleting cookies -- just to be safe.

Right on the heels of this study is a press report that Yahoo may be teaming with a company called Almond Net, an online ad network that allegedly is striking secret deals with ISP's to capture information on the Web searches performed by users, to better target advertising to them. Lycos has already inked a deal with Almond Net.

I see this as one more example of search engine hubris, because sensitivity over privacy -- even if misplaced, has killed more than a few promising Web start-ups. Yet in the mad rush to cash in on the online advertising boom, these companies risk getting caught with their hands in the cookie jar and paying a significant penalty for it in the marketplace. The lesson for all of us is that playing fast and loose with one's users, even if it's all technically aboveboard, is simply too dangerous in the current environment.

According to published reports, newspaper executives at their annual conference received what was described as "startling" news from a team of McKinsey & Company executives - - their classified advertising businesses have eroded noticeably, and are poised to drop as much as 20% more by 2007. The cause of this steep decline: Internet competitors such as Monster.com, Craigslist and RealEstate.com.

I want to empathize with these newspaper folks -- we're in different wings of the same business after all -- but for people whose business is gathering and reporting news, they always seem to be the last people to know what's going on. Of course, this may be some form of denial as well. In either case, it's worth taking a closer look at one type of classified advertising, help wanted ads, because what's driving this decline isn't unique to newspapers.

In many markets, newspapers are effectively monopolies, and their pricing tends to reflect that. I've placed more than a few newspaper help wanted ads, and if you're not careful, you can easily drop close to $1,000 for a few lines of type that would generally appear only once. It's not surprising, then, that the McKinsey study quotes a newspaper executive as saying that, "Classified advertising is more profitable than printing dollar bills."

Along comes the Internet, and suddenly the reach of newspapers can be duplicated, and even expanded upon, without the infrastructure costs. It's been open season on newspaper classifieds ever since. Just as significantly, these online competitors realized that without paper, ink and delivery vans they could charge a fraction of the price and still make boatloads of money, a development that McKinsey refers to as "price destruction."

But there is more going on with these online job sites than just lower prices, and therein lies what I consider the most important point of all: these online job sites aren't just competitive businesses; they are better businesses because they've streamlined the hiring process and integrated themselves into their customer's workflow.

Consider the improvements. With newspapers, you would often wait for the big Sunday edition to advertise. Online, you're receiving responses within minutes of posting your ad. With newspapers, your ad is forced into a category, which may or may not be where people are looking (newspaper solution: buy cross-reference ads!). Online, your ad is accessible by category and by keyword, improving discoverability. Online, you reach a national if not global audience, and your ad stays visible longer. These are all what I'd call the "built in" advantages of Web information products. But there is still another level of benefit.

The job sites allow job hunters to post detailed resumes for free, and they sell access to these vast databases so that companies could search for candidates as job hunters were searching for open positions. The job sites built workflow applications for their customers to help them screen, filter and organize incoming resumes. Credit, of course, must also be given to the job boards for turning paper resumes into a digital stream that can be more easily forwarded, stored and archived. The sites offer automated screening tools to pre-qualify candidates, and will even manually screen and select candidates for an employer. On the job hunter side there has been workflow improvement as well. Job seekers can get real-time alerts of new job postings matching their criteria, and can even forward their pre-stored resume to a prospective employer with a few mouse clicks.

In short, the business of help wanted advertising hasn't just been digitized, it's been revolutionized by these new players. And now a new breed of players, companies like, ZoomInfo, Linked-In and Ziggs are bringing still another level of innovation to this business.

And newspapers? High overheads, declining circulations, slow-moving bureaucracies, and a penchant for trying to wish away uncomfortable business changes. Given that it's 2005, what should be startling to the newspaper industry isn't that their classified businesses are in decline, it's that they have any classified business left at all.

Google's recent decision to introduce advertising options not tied to keywords is a watershed event for the company. In one fell swoop, it is moving beyond the formula that made it unique and exciting -- relevancy coupled with pay-for-performance pricing -- and crossing over into the traditional world of cost-per-thousand advertising. What's driving this move? On quick inspection, it can be dismissed as nothing more than a quick grab for cash. But to me, it's a sign that Google is poised to lose its direction. Indeed the New York Times reports that some stock analysts are now suggesting that Google's advertising network will become more important to its business than its search engine.

This belies Google's origins. Its early success was driven by a pure focus on doing search better than anyone else, and keeping far, far away from the dot-com gold rush. You may recall that in its early years, it was a point of honor with Google that it accepted no advertising at all. When it finally introduced advertising, it was in discrete ads set off to the side of search results to avoid any chance of intrusion or confusion. Now, Google plans to enter the bazaar, offering graphics, animation and other elements that will let advertisers more aggressively clamor for your attention. In short, Google plans to become just like everyone else. Relevancy, the cornerstone of all its advertising programs, is now optional. After decrying the inefficiency of cost per thousand advertising for years, Google is now embracing it.

What's perhaps most worrisome in Google’s decision to even more intensely focus on advertising is that this may well lead to a reduced emphasis on its search engine. This is the mistake Yahoo! made a few years ago when it decided its Web index was nothing more than a "site feature," and actually started licensing its index in part from Google, and in doing so, fueling Google's growth. Users (a/k/a those valuable eyeballs Google wants to expose to advertising) go to Google because it is perceived to produce more relevant results than anyone else. If Google fails to deliver on this promise, or if people even start to believe Google is no longer delivering, its users will start to move to the next, new hot thing in search engines (and there are no shortage of them out there), and Google's distinction -- and traffic -- will decline.

If Google decides that its primary business is distributing advertising to its network of publisher sites, then it becomes nothing more than one of dozens of online advertising networks, focused on delivering the highest number of impressions with only a passing nod to relevance or quality. That's a huge departure for a company that built itself on being different and better.

There have been more than a few companies that found initial fame and fortune as search engines, then repudiated their roots in the race for even bigger dollars only to find themselves in much more competitive markets with little to distinguish them. Google is now at risk of repeating history. Search will remain a good and profitable business, but only for those search engines that remain committed to it. Those that treat search as a means to an end often arrive at a dead end.

An article in today's PaidContent discusses an unusual move by the New York Post newspaper to not only impose forced site registration, but to ask for personal details including birth date, email address, zip code and income. Reportedly, the registration form was hurriedly removed after numerous complaints and highly negative press coverage from rival New York papers, although I encountered this very registration form just a few moments ago

What is the New York Post thinking? Who knows, as the Post won't comment on its move to collect a lot of information (making registration much slower), and a lot of very personal information at that.

Even at this late date, publishers remain remarkably divided about the merits of forced registration. Publishers who derive the bulk of their online revenue from advertising generally don't want to lose even a single set of eyeballs against that advertising, and generally opt for no registration at all. That maximizes traffic, but at the expense of knowing much about their online audience.

Another group of publishers believe that, since they are providing valuable content to visitors, it's not unreasonable to ask visitors for some information in return.

Complicating the registration decision is the extreme variation in results when registration is implanted. We know publishers who have seen their site traffic drop by as much as 80% after requiring registration. We also know publishers that have only experienced a 20% drop. We know two publishers whose traffic dropped briefly and then actually began to increase over pre-registration levels. Of course, many of these numbers reflect the anarchic state of Web analytics, which at the moment make it hard to predict the true impact of forced registration.

Leaving aside the tricky question of whether or not to require site registration, here are the ground rules if you go the registration route: ask as few questions as possible (the longer the registration process takes, the more visitors you will lose) and make sure you can fully justify every question you ask. Hey, we're all in the data business, and it's a natural instinct to collect more data. But we've seen more than a few publishers who have taken a traffic hit as a consequence of forced registration, and literally never bothered to look at the data they collected. So don't succumb to data excess or you'll just end up with excess data. If you don't have a known and compelling use for the information, don't collect it.

I was pleasantly surprised to receive from insurance industry powerhouse A.M. Best a copy of a new publication entitled, "The Guide to Understanding the Insurance Industry." Its 84 pages offer the best plain language explanation of the insurance industry I have ever seen, along with key industry statistics. Not surprisingly, many of the statistics are drawn from various A.M. Best publications, and the text does a subtle yet solid job of showing where A.M. Best products fit in the overall industry picture, what they do and why they are important. In short, A.M. Best is working hard to educate the marketplace about the insurance industry and how its products support that industry.

Nice, but what's the point you say? I have seen several examples lately of clients whose data products are so sophisticated that their subscribers weren't tapping into their full potential, and in at least one case, actually misusing the product. And when subscribers under-use or misuse a database, they don't blame themselves. They blame the publisher -- and don't renew.

This is an interesting new challenge for the industry as publishers increasingly introduce "to die for" datasets that their markets can't fully appreciate without some guidance. The only real solution is to educate users. Don't be fooled into thinking that if subscribers don't understand how to fully use your product, they'll make support calls. Those subscribers who call for support are typically having a problem getting from point A to point B. There is a whole other class of subscriber that doesn't even know point B exists. Unless you educate them about the possibilities, this is a group at risk of drifting away from your product.

The same problem exists even when your product isn't all that sophisticated, but you are moving into new markets with it. A great example is infoUSA, which built its business selling mailing lists to companies that for the most part had never bought a list before. One thing infoUSA learned very quickly is that making the sale was only part of the challenge. It also had to teach its customers the basics of direct mail and to educate them about such things as undeliverable mail. If you have just sent out your first mailing and get 300 pieces back marked "undeliverable," it is not unreasonable to conclude you've been cheated. But if those 300 undeliverable pieces came from a mailing of 10,000 pieces, that's not a bad result -- but the customer would not know that unless educated in advance. I have long contended that infoUSA's remarkable success in the treacherous small business market was due in large part to its educational efforts.

We all take data for granted. After all, it's our business. But we should never forget it's typically not the main business of our customers, and that an investment to educate our subscribers will yield an impressive long-term return.

Most print database publishers have learned -- often the hard way -- that you don't mess with success, or even failure for that matter. Directory users are highly resistant to change, so even improvements come with real risk attached. What particularly fascinates me is that the it is the most poorly designed directories that have the subscribers most vocally opposed to making changes to layout, indexes and overall organization.

The explanation for this is partly that directory users are creatures of habit. Once they are comfortable with how something works, they don't want to have to re-learn the product. There's also a secret club aspect to it -- once users accustom themselves to cryptic codes, unintuitive indexing and arrangement, and non-standard abbreviations, it's as if they've cracked a code and joined a secret society that makes them a little smarter and a little more valuable in their organizations.

Not surprisingly, this passionate preference for the status quo extends to Internet-based directories as well. Unfortunately the ease of making changes to user interfaces has tempted more than one publisher to begin an endless series of "improvements" to their online products, leaving a trail of customer anger and frustration in its wake. On several occasions, I have experienced this myself, finding the online database I logged into on Friday bears no resemblance to the one I logged into on Monday. My first reaction, "why did they mess with something that worked just fine?"

In many cases, publishers have abdicated control over design of their Web products to their IT departments. Good intentions notwithstanding, IT-designed Web sites tend to favor neat and cool over functional an intuitive. This mindset even extends to colors. A professional site designer believes "less is more" in terms of color; a programmer believes that if there are 64 million available color combinations available, as many of them should be used as possible.

Publishers should monitor and discourage gratuitous "upgrades" to their Web sites. Changes to layout, navigation and functionality should be implemented slowly and only after customer testing. Familiarity with your interface is a form of subscriber "lock in," don't throw it away on a whim

There was a very consistent reaction to the news this week that Thomas Publishing was ending the print edition of Thomas Register. I'd characterize it as being "shocked but not surprised."

I think the shock was driven by the symbolism of the decision. When this publishing icon, one of the largest and most successful buying guides of all time, says so clearly that print is passe, we all then have to acknowledge that the future of our industry is online. By now haven't all database publishers acknowledged that their future is online? Yes, but that acknowledgement hasn't always been backed up with action, in part because there is no clear path to get from here to there.

The lack of surprise comes from the fact that Thomas was an early and aggressive player on the Web. At a point in time when the future of online was anything but clear, Thomas made the huge gamble that the value of an online audience would ultimately be worth more than the print subscription revenue it was putting at risk. It won, and it won big. The transition for Thomas has been anything but painless, but by starting so early, it became a major Web destination well before there were even such things as keywords to buy, and that has given it a huge competitive advantage. Also, by starting early, Thomas learned a lot and was able to make some mistakes without incurring much damage, all while hedging its bet by maintaining its print edition and selling a print/online package. If there isn't one already, this would make one amazing business school case study.

Now that Thomas has killed the print version of Thomas Register, there will be a lot of soul searching by the industry with publishers asking themselves whether it's time to discontinue their own print products. While our research says that print will move into a period of accelerating decline over the next 2-5 years, most publishers will find that 20-25% of their customers will continue to prefer print for the foreseeable future. Most publishers can still economically accommodate this market. Thomas, with its 33-volume annual behemoth, was dealing with atypical print economics.

As someone who cut his teeth (and his hands, re-making pages with an X-acto knife) working on the print edition of Thomas Register, I am certainly going to miss those "big green books." At the same time, we are watching a whole new era unfold before our eyes, one where our information and our value are no longer constrained by the limitations of the print format, but only by our imaginations.

Yahoo! has announced a beta version of what it calls Yahoo! Search Subscriptions, that allows users to search for content on password-protected, subscription content sites.



By arrangement with publishers (the publishers currently participating are Consumer Reports, Financial Times, Forrester Research, IEEE, New England Journal of Medicine, TheStreet.com and the Wall Street Journal), It's being reported that content from Gale, LexisNexis and Factiva is due to be added shortly.


Yahoo! indexes the content and shows a snippet of it in search results. Users then click on a search result link, and they are presented with a page controlled by the publisher that allows users to login (if they are existing subscribers), subscribe online, or in some cases, purchase a specific article or report on a one-off basis. It's an approach that is simple and effective. And it's a model where everybody wins. Users get greater access to so-called "deep Web" content. Publishers with subscription content get more search engine visibility, ultimately leading to more revenue. Yahoo! gets lots of new content under its index, giving it some nice differentiation and competitive advantage (at least for a while).


Best of all, publishers don' have to compromise their business models in any way. Consumer Reports subscribers, for example, can access content directly through the Consumer Reports site, or indirectly through Yahoo!, using the same username and password in both places. The subscription to Consumer Reports is no less valuable to the subscriber because of this arrangement with Yahoo! It's just one more doorway to the same content.


But the most amazing thing about this new service is that it wasn't launched five years ago. Both the idea and the execution are breathtakingly simple, and the underlying technology has been in place for years.


It's the rare subscription-based data publisher who won't benefit from being part of this new service, so run, don't walk over to Yahoo! and get on board now. Even if Yahoo! ultimately starts looking for a revenue share on content sales and new subscriptions, this will probably still be a good financial deal subscription-based publishers. And besides, the faster this new service from Yahoo! grows, the faster Google and all the others will copy it, providing even more low-cost promotional opportunities for subscription-based publishers!


We're pleased to announce that
Richard P. Malloch, President of Hearst Business Media, and
Craig Pisaris-Henderson, Chairman and CEO of Miva Inc.
(formerly FindWhat.com) will be the keynote speakers at InfoCommerce 2005.

InfoCommerce 2005:
Cracking the Quality Conundrum


November 6-8, 2005 - Philadelphia, PA

Few would argue that over the last five years the major search engines have made enormous strides in improving their coverage of the open Web. They now find new sites more quickly, re-index them more often and even provide searchable access to non-textual content. It's all very impressive and very much for the good. However, as we all well know, too much information can be as much a curse as a blessing. That's why so much effort has been invested in trying to improve the precision of search, an effort often referred to as "improving relevancy." Providing a list of Web pages that contain a keyword or phrase is no longer considered innovative or even particularly valuable. Value is now embodied in identifying the most relevant Web pages for searchers. Every major search engine has its own secret sauce of techniques, processes and algorithms to devine relevance, and they seem to be getting better every day. But this isn't where the battle for search primacy ends, not by a long shot.



The next phase in this competitive battle is to get more paid content under index. Opening shots in this battle have already been fired by both Google and Yahoo. Lexis-Nexis used to run an ad campaign in the early days of the Internet touting that it held far more data than the entire Internet. As a competitive response to the Web, it missed the whole point, but it does underscore another one: even at this late date, some of the most important, powerful and useful content is still not to be found through search engines. This may be the simple explanation why content aggregators continue to do well despite the long shadows cast by the big search engines: their content is valuable and not available elsewhere.

To its credit, the content aggregation industry realized years ago that this distinction would not provide protection forever, which is why they've upped the ante, moving beyond delivery of raw data, and even moving beyond the search precision issue to focus on the biggest value-add of all: making data truly useful. OneSource built a nice business by taking on the hard work of integrating disparate databases to create highly comparable company profiles. Alacra has a nice niche providing customized data feeds to clients for use in their internal systems. Factiva continues to develop increasingly elaborate and powerful taxonomies that can even be extended to the internal data of its clients. LexisNexis builds virtual company profiles drawing on its vast data warehouses.

Interestingly, publishers are jumping on this bandwagon as well. Gale is now out with a product that assembles content from across its range of databases to present deep and comparable profiles. infoUSA is also jumping into the fray, having become a recent convert to the power of data mining to deepen its databases.

Where's this all heading? I think once the gee whiz factor of all the new content assembly technology wears off, it will become evident that the marketplace has moved beyond giant, one-size-fits-all databases. No matter how big, deep and accessible a database is, the fact remains that engineers, purchasing agents and analysts need different data different ways, and it's unlikely that anyone will cook up a single product that will keep them all equally happy. And just as there is growing user sophistication in terms of data elements and search interfaces, so too is there growing sophistication in terms of the overall dataset. Users are going to value 98% coverage of what really matters to them over 80% coverage of everything in the world. All this suggests to me that the future of search looks vertical. Business success will be a function of limited coverage, tailored to certain specific types of users, and executed very, very well.

Winners and losers in this scenario? Most data publishers already have a vertical orientation, and those that quickly figure out how to deliver data as well as they compile it will be very nicely positioned. Aggregators should have a solid, continuing role serving the distinct market that will continue to need convenient access to broad swaths of content.

It's the search engines that seem to be the ones not invited to this party. They are simply too wedded to serving up the most stuff to the most people. That will still be a great business for them, but it's a different business. And as the data content business gets comfortable with its distinctive place in the market, the industry will see greater stability and a much clearer path to profits.

There's been a flurry of activity lately around the obscure but important practice of Web page caching -- taking and preserving copies of someone else's Web pages.




One of the more remarkable Web sites I have ever run across is www.archive.org, also known as "The Wayback Machine," a non-profit venture co-founded by Brewster Kahle to essentially take snapshots of the Web at different points in time. Using The Wayback Machine, you can easily take a look at how any individual Web site has evolved over time. Perhaps not surprisingly, not everyone wants their history to be so readily accessible.




In a recent court case, a law firm used The Wayback Machine to uncover some evidence to support its case. The other party in the lawsuit turned around and sued the Internet Archive, operators of The Wayback Machine, for inappropriately making and holding copies of their Web pages. The case is complicated, and actually revolves more around something called a "robots.txt" file than the cached pages itself, but an adverse decision could have a chilling effect on archiving and making available historical content gathered on the Web.




At the same time, Canadian legislators are considering an amendment to the Canadian Copyright Act that will actually prohibit anyone from making and holding a cached copy of someone else's Web site without permission. While this could be a speedbump for search engines that cache content, it's not likely to disrupt them too much as they don't need to cache content to index Web sites, and indexing itself will not be prohibited.




But this is all part of a larger trend towards history disappearing from the Web, and therein may reside a real opportunity for data publishers.




I regularly see examples of companies removing all traces of unsucessful products, ousted executives and failed ventures from their Web sites, leaving no clue they ever existed. A large percentage of companies, mostly for benign reasons, "age off" old press releases and announcements from their Web sites, leaving only a narrow window of corporate history. Most companies seem to feel that the primary value of their Web sites is to provide current if not real-time information, with only a small nod to what has happened in the past. That means that those who capture and retain this type of business information will ultimately end up with a vast repository of business intelligence, much of it unavailable elsewhere.




Even in the pre-Internet days, historical data had real value. I published one directory that ran a small index of corporate name changes that was one of the most popular and heavily used sections of the publication. I know another healthcare directory that didn't simply delete companies that went out of business, merged or were acquired. Instead, it ran it as an index called “Mutations” which proved incredibly popular. I know one financial publisher that actually retains all the previous positions held by the executives in its database, valuable information that could be the basis for a number of specialized, high-value products. In many industries, there are successful databases that cross-reference old and new part numbers, or suggest equivalent parts to replace discontinued parts. And knowing what products a company used to make, what ventures it has exited, and what executives it used to employ will become increasingly valuable as the information becomes harder to access. When it comes to data, the past can be a prelude to lucrative opportunities.

The recent Marketing Accountability Forum sponsored by the Association of National Advertisers kicked off by releasing results of a new survey of senior-level marketers. While some 60 percent of senior-level marketers surveyed said that defining, measuring, and taking action on ROI is important, only about 20 percent reported being satisfied with their ability to do so. Yup, here we go again, a new salvo in the advertising ROI war. Can anyone object to measuring the return on investment of business expenditures wherever possible? I certainly don't. The rub, however, is that little qualifier, "wherever possible."


The rush to prove advertising ROI is a direct outgrowth of the recent "pay for performance" advertising phenomenon induced by the search engines, which in some cases, does allow advertisers to measure ROI with some degree of precision. And for those who can't measure the ROI of their pay for performance advertising, there's at least the comfort that the advertiser is still only paying for performance, right? Right, but let's not forget that the definition of "performance" has been crafted by the same organizations you are paying for that performance. Just try to buy something with all those clickthroughs you just spent so much money to obtain, and you'll see just how abstract that definition really is.

For advertisers, asking a publisher for proof of ROI has no downside. ROI is a "motherhood and apple pie" concept: nobody will ever laugh at you for bringing it up. At the same time, while it is a serious business concept, it's also in many cases nothing more than a trendy new sales objection Can publishers prove value? Yes, but only if they define what value means, just as the search engines have defined what performance means.

Consider an air travel analogy. You have a hot new sales prospect in a distant city. You need to make your sales presentation in person. You call an airline and arrange the flight. Do you then require the airline to prove ROI before you purchase your ticket? After all, if you don't make the sale, the price of the ticket is wasted, and you'll have zero return on that investment. In this context, what is ROI? The airline can't guarantee you'll make the sale. The airline can't be reasonably asked to show statistics and case studies to prove that a high percentage of salespeople who fly to sales presentations close deals. The airline's job is to get you from point to point safely and on time. It can't and won't make any promises beyond that. If you can get to that sales presentation without flying, more power to you. But if you need to fly, you do it on the airline's terms, in the context of their clear mission and value proposition. The airline is a means to an end, a business tool.

When missions and value propositions get fuzzy, so do business roles, promises and measurements. And lest you think advertisers have more of a handle on this than publishers, consider the big new initiative rolled out during this ANA conference, called MI4 (Measurement Initiative: Advertisers, Agencies, Media and Researchers). Core to this new initiative is a proposal that the entire industry adopt "consumer engagement" as a key to "Return on Media Investment" analysis. What is "consumer engagement?" Well, even though it's fundamental to this new initiative, it still hasn't been defined, nor has it been tested. They're going off to do that now. The takeaway for database publishers? With all this uncertainty among people who are clamoring for certainty, it is incumbent on us to not only define our value, but also to define how that value is measured.

I opened up two recently purchased music CD's yesterday and found they both contained postcards I could fill out to get on the mailing list for the music labels producing the CD's. I have seen this in scattered instances before, and what's particularly interesting to me is that only the small labels ever seem to bother, even though the cost to insert a postcard into a jewel case is virtually zero, and the information gained can be priceless. Yet for whole segments of the publishing industry, the customer continues to be an intermediary, not a true end-user.

I've never been particularly excited about any form of publishing where there isn't some direct connection with the end-user. I say this even for advertising-based publications. Many print publishers to this day continue to rent lists and ship out their ad-based publications to strangers, hoping that the large quantity they are sending out will compensate for their lack of knowledge about who they are sending to. This happens with many ad-based Web sites as well, with publishers evaluating their success based on level of site traffic -- eyeballs -- with no real knowledge of the users behind that traffic

Subscription-based publishers usually have better information on the end-user, but not always. Many data publishers sell a significant percentage of their subscriptions to libraries. Even when the customer appears to be an individual in a company, the subscription ends up in an internal information center, and the individual subscriber of record may not use the information at all.

Of course, many data products are sold through distributors and aggregators, another type of intermediary sale where the ultimate user is unknown. Distributors have traditionally been loathe to release any end-user usage information. I can remember sitting in meetings when Dialog ruled the roost, begging and pleading for the tiniest shred of information on who might be using our content. Ironically, with aggregators and distributors increasingly feeding corporate intranets, even they don't truly know the ultimate user anymore

Interestingly, a lot of publishers are wringing their hands and worrying about maintaining their brands in an environment where information distribution is increasingly anonymous and diffuse. The focus on branding content is in one sense an admission of defeat: publishers are effectively saying, "I probably will never know who you are, so I want you to at least know who I am." Presumably these end-users will then seek out the publisher directly for additional content. At least, that's the hope But this is not the time for passivity when it comes to knowing your customers. It's not just a sales issue. It means understanding how and why your content is being used, and intermediaries will never be able to truly answer that question for you. Because if you don't know exactly who is using your data, as well as how and why it is being used, you won't be able to apply the high-value infocommerce characteristics that are critical to continued success and growth.

HEAR FROM THE MOST IMPORTANT NAMES IN THE DATA PUBLISHING BUSINESS ...TODAY'S AND TOMORROW'S InfoCommerce 2005 is proud to announce that

Tim DeMello, Chairman and CEO of Ziggs, has been confirmed as a speaker.

InfoCommerce 2005 November 6-8 | Philadelphia

The Working Conference for the Thinking Publisher.

A few weeks ago, CNET published an article about Google. To create some interest, the article kicked off with some information obtained via Google about Eric Schmidt, Google's CEO. The specific information published about Schmidt was by today's standards pretty banal: town of residence, money made selling Google stock, political contributions and a tidbit or two about his outside interests. None of it was all that revealing.


Google's reaction to the story has to merit an award for tone-deaf public relations: it banned everyone at Google from talking to anyone at CNET for one year. Yes, CNET is being punished for using Google to write an article about Google. Irony and hypocrisy abound. But beyond the quick yucks, there is a much bigger issue: to varying degrees, we've all been throwing data together so quickly and on such a grand scale that we haven't really stopped to consider the consequences of our work. Putting all the information in the world under one index is indeed an activity rife with implications, and even less ambitious attempts to gather and disseminate data have issues associated with them. And these issues actually grow as you become more successful at what you do.


Many of us now have data products based in whole or in part on data mining, assembling data gathered on an automated basis from all over the Web. Getting data assembled properly is no small feat, and there can be consequences if it is not correct. This isn't just an issue for consumer information, as the U.S. Supreme Court made clear in its famous Greenmoss decision. Nor is it just an issue for financial information. It's only a matter of time before some company is passed over for a contract, or some individual is passed over for a job based on an incorrectly aggregated data profile, and then watch the legal fireworks. Blazing new ground can be risky.


Similarly, we all need to remain focused and clear on why we collect and report certain information. We've all seen the spate of recent headlines about identity theft. The real question for many of these data providers, one not publicly addressed, is "what were you doing with all that information in the first place?" Which of your customers had legitimate uses for it and why? To hear some of these data providers talk, you'd come away convinced that private investigators were the largest and most lucrative market out there. Hardly. Talk to these data providers privately, and they will quickly admit that the main reason they aggregated all this personal information was because they could, and because when it comes to information, more is always perceived to be better. In many cases, those data aggregators most loudly proclaiming that "more is better" are the ones that know the least about their customers and how their data is being used.


I've been very bullish about rating systems and user recommendations as a way to add value to databases, and still am. Yet I will acknowledge there is a dark underbelly here as well. We spend a lot of time worrying about attempts to game these systems to achieve undeservedly high scores. But there are also cases of consumers using rating and referral services to punish businesses they take a dislike to, sometimes for the pettiest reasons. Some businesses are saying that negative comments hurt them financially, and that the data publishers behind these systems are disinclined to get involved in the messy business of arbitrating disputes, so they are left with no avenue of appeal.

Our vision of infocommerce is that data, properly formed and properly delivered, becomes more valuable to customers, who rely on it more. That's a great business model, but with increased reliance ON our data, there comes increased responsibility FOR our data, and what we are seeing now is just a sampling of some of the heightened level of scrutiny to come. We must be ready with a thoughtful policy that protects interests that extend far beyond our own businesses.

Expedia and Hotels.com, two of the great innovators and success stories in the online travel agency business, have recently been spun off by their parent, Barry Diller's IAC, into a new company called Expedia. The spin-off is intended to boost IAC's sagging stock price. Apparently, Diller believes there is more upside potential in IAC's remaining properties, which include Ticketmaster and the Ask Jeeves search engine, than in its online travel properties.




On August 8, the New York Times wrote a piece that nicely summarized the many challenges facing the newly independent Expedia. In essence, Expedia profited handsomely during the economic downturn by buying blocks of hotel rooms on the cheap from the major hotel chains then reselling them at a markup. Hotels got badly needed money, but they ended up paying a high price in business disruption, not the least of which was enabling a third party to sell their hotel rooms less expensively than they could.




But now with an improving economy, the hotels are fighting back, aggressively pushing travelers to their own, much improved Web sites, which now always offer the best available room prices. Some chains have gone even further, and are now squeezing Expedia on standard booking commissions. Further, Expedia's many competitors have begun copying much of the Expedia business model. End result: much more competition and a less compelling product are both kicking in at the same time. Expedia is hardly out of the game, but it's going to be a tough battle going forward. And how does Expedia plan to distinguish itself and hold onto market share in this hotly competitive market? A new focus on content to help travelers make more informed travel purchases, an effort that will likely be fueled by another company that IAC included in the Expedia spin-off, TripAdvisor (a 2004 InfoCommerce Model of Excellence winner).


A second article in the New York Times on August 16 described the rapid growth and success of the managed corporate travel business. Managed corporate travel essentially involves a corporation pushing all its travel bookings through a single online travel agency in exchange for efficiencies and savings. One of the biggest players in this field, the article noted, is Expedia Corporate Travel.


Is there a contradiction here? Not at all. What it underscored are the essential differences between consumer and business markets, and the power of infocommerce.


Because consumer markets for almost anything tend to be huge, they attract lots of players. These players compete aggressively for market share, because consumer markets tend to depend on volume to make real money. To attract fickle consumers, the general pattern is for the competitors to start an arms race to offer the most content, the most features and the most functionality. It's an endless, expensive spiral, and many companies cripple themselves in the process of trying to cripple the competition. Worst of all, it's harder than ever to build loyalty among consumers, and more expensive than ever to try to remain front-of-mind with them.


In contrast, business information markets tend to be smaller but afford greater stability. Further, businesses still tend to consider other factors in the buying decision beyond price, such as dependability and functionality. Expedia Corporate Travel is doing so well in the corporate travel market because it's doing a lot more than booking cheap fares. In addition, it provides management tools, enforces corporate travel policies, provides sophisticated reporting and saves client companies money as well. By taking information (hotel and airline rates and schedules) and making it actionable (by taking reservations), Expedia adds value by improving productivity while controlling costs. By acting as a central corporate travel agency and providing management control and reporting, it embeds itself into corporate workflow so deeply it is almost impossible to dislodge.


Not all data providers can or want to take their customers all the way to a purchase, but what we should be striving towards is adding functionality to data so that it helps customers improve their efficiency and productivity. And that is the essence of infocommerce - to become part of internal customer workflow, where you can deliver the highest value while creating long-term customer dependency and significant switching costs. As the tale of the two Expedias illustrates, the future of data publishing is less linked to finding lots of new customers than pushing more deeply into the businesses of our existing ones.


HEAR FROM THE MOST IMPORTANT NAMES IN DATA PUBLISHING BUSINESS ...
TODAY'S AND TOMORROW'S InfoCommerce 2005 is proud to announce that Dale T. Denham, Senior Vice President, Advertising Specialty Institute, has been confirmed as a speaker.

There has been a tremendous amount of hand-wringing in the press about a spate of new surveys that indicate that a growing number of consumers are routinely and aggressively deleting cookies from their computers. One study, for example, claims that 27% of consumers clear cookies from their machines on a weekly basis.


Cookies are small files that your Web server software can place on the hard drive of every visitor to your Web site. Originally, cookies were designed to provide added convenience to the user. As an example, a cookie can be constructed so that a visitor to a subscription-based site doesn't need to go through the login process every site they visit the site.


For advertising-based sites, cookies are critical to measuring traffic and usage. If you ever wonder how a Web site without required registration is able to compute "unique visitors," the answer is via cookies. When a site user visits for the first time in during a reporting period, a cookie is placed on that user's computer that essentially says "don't count me again for the rest of the reporting period." If the user deletes that cookie, the same user is counted again, effectively inflating the unique visitor count.


When cookies represented a one-to-one relationship between publisher and site visitor, very few people found them objectionable. But when Web advertising networks introduced the concept of "third party cookies," things began to get ugly.


When an advertising network with say, 1,000 sites, places its cookie on a user's computer, it is then able to tell if that user visits any of its other 999 sites. Every time the user visits one of those sites, the network is able to capture this information, building a behavioral profile of the user. A number of years ago, one major ad network got a little too clever and started matching its behavioral profiles to online registration data, allowing it to know not only who you were, but your interests and Web surfing preferences as well. That hit a little too close to home, and the program was canceled after a storm of public protest. Behavioral profiles have again come back into fashion, the difference this time is that they are all anonymous. What upped the ante on cookies is when most of the popular anti-spyware software companies decided that these third-party cookies were invasive, and allowed users to delete them. Even though these software companies grudgingly admit that these cookies are generally not harmful and don't really invade anyone's privacy, they have an agenda of their own: it allows their software to "find more stuff" on user's computers, making their software seem more valuable.


It is possible to delete all the cookies on your computer using a feature built right into every browser. Trouble is, this deletes "good" cookies (those that speed login to specific sites by saving user name and password), as well as third-party cookies, which is why more Web-savvy users don't do it. It's also important to understand that most anti-spyware software selectively deletes cookies, trying to delete only third-party cookies. That means for most data publishers, the cookies set for subscribers with their passwords remain intact, and counts of unique visitors are not going to be distorted.

Those most loudly bemoaning the issue of cookie deletion are the advertising networks, which increasingly depend on the third party cookies they set to control ad rotation and target ads based on behavioral profiles. Some executives from the major ad networks are busy writing editorials suggesting that publishers must convince their audiences of the benefits of third party cookies. Correct me if I am wrong, but the only reason third party cookies need to be defended is because the slippery practices of some advertising networks have brought them into disrepute, to the point where legislation has even been proposed that could potentially outlaw cookies. But now publishers are being asked to run out and put their reputations on the line by endorsing cookies on behalf of this group of unregulated and often shadowy advertising networks. And since we're being asked to endorse third party cookies, and since networks can charge more for targeted advertising, is it not unreasonable to ask how much of that premium pricing trickles down to publishers?

The concept of pay-for-performance advertising, which is the key driver behind the boom in online advertising, is radically transforming the data publishing industry. While this transformation has been destabilizing, on balance it's been beneficial, and we have in large part Google to thank.


So with Google now reaping outsized rewards for its brilliant innovation in online advertising, why is it now playing around with print advertising? Yes, if you haven't read about it already, Google is apparently buying full-page ads in a few magazines on a test basis, and reselling them as fractional page ads to some of its AdWords advertisers. While there isn't a lot of information available on how serious Google is about this test, most of the reporting about this move consists of little more than fawning praise, usually along the lines of, "Isn't Google clever for seeing this opportunity?" or "Google can't fail because it knows so much about advertising."


Huh? All I see is a company that seems to be showing more hubris than insight.


In the online world, Google is delivering the advertising it sells, in an electronic format, and in a fully automated environment. That equates to nearly pure profit on everything it sells. What does the print advertising environment offer? Pretty much the exact opposite.


And while Google programmers are renowned for their cleverness, any publisher reading this is sure to be smiling at the thought of Google trying to automate the "process" of advertisers designing and uploading their own ads, in the right size, format and resolution, all in time to meet strict print production deadlines.


There's also the question of sales. Google, like many Web start-ups, is a big fan of what's called "self-provisioning," letting customers place their own orders and manage their own accounts. Customers interact with Google on its terms, using its preferred methods. Whether customers are happily trading this impersonal approach for the greater efficiency it allegedly yields is a topic for another day. What is significant here is that Google has no culture of personalized interaction and "knee-to-knee" selling, and indeed it appears almost antithetical to its business model. Yet this is what it will take to chase this relatively low-margin business it now apparently covets.


In this new environment, with Google taking real inventory risk, it seems inevitable that Google will end up writing some big checks for print ad pages it couldn't sell. There will also inevitably be lots of Google filler ads for fractional units it couldn't sell and for advertisers who didn't submit materials in time, and these costs could easily subsume what are likely to be the thin profits for re-selling space.


I am hoping that the Google test of print advertising sales stems more from an innocent "dude, couldn't we like sell print ads too?" moment than an orchestrated strategy to get its hands on an even bigger slice of the national advertising pie, along with the right to decide when and where much of this advertising gets placed, a development that would leave many publishers in a dangerous state of dependency. With Google able to decide which publishers will prosper and which won't, it would truly be in a position to stop a few presses.


We're pleased to announce a Model of Excellence award for 2005 has been awarded to Business Partnering International for its AgencyFinder service.

For a handy reference to Models of Excellence winners for 2005 and years past, please visit our awards page for the complete lists and full details.


Kelly Gay, Chairman, President and CEO
of KnowledgeStorm, has been confirmed as a speaker.

InfoCommerce 2005
November 6-8 | Philadelphia
The Working Conference for the Thinking Publisher.

The recent announcement by Ebay that it is acquiring Internet telephony provider Skype (my considered assessment of this deal: indescribably dumb) prompted me to take a fresh look at another Ebay initiative that pops up on our radar from time to time: Ebay Business.

Launched in 2003, Ebay Business was intended to extend Ebay's transactional platform to business-to-business purchasing. Just like the consumer version of Ebay, businesses can either auction specific items or sell merchandise at a fixed price. Buyers can find items by browsing within a category or through keyword searching. What was particularly interesting, and a bit frightening, about Ebay Business was its ambitions. Backed by a budget of over a hundred million dollars, Ebay Business wanted to become a significant player in business and industrial purchasing.

As a transaction service where users could both source and directly purchase merchandise, Ebay Business has strong infocommerce characteristics. If it achieved any scale, it could become a real threat to traditional buying guides that typically only introduced buyer and seller then stepped out of the picture. This distinction spotlights the blurry boundaries between buying guides, catalogs and marketplaces.

It is not as if buying guide publishers hadn't seen the opportunity to evolve into marketplaces, where they could generate potentially huge transactional revenues. Rather, the problem has always been in the execution. We're all aware of the large number of industry marketplaces that have been launched with great fanfare and huge investment, only to fail miserably, or at best limp along. The problem isn't lack of value or lack of need. Rather, the problem is with the model. In short, the better a job the marketplace does for buyers, the less attractive it is to sellers. That's because you can't sell merchandise without stating prices. And when you list prices, users almost invariably compare and buy on price. That's a rational thing to do, but it strips away the more emotional elements of buying such as service, quality, brand, reputation and other critical, but soft, differentiators. Buying guide publishers have wisely decided to continue to focus on the middle ground, introducing buyers to sellers and letting the two parties complete the purchase directly.

So has Ebay Business "cracked the code" of the marketplace model? After test driving the site today, I must admit that it's vastly improved over what it offered at launch. In its early days, Ebay Business wouldn't or couldn't separate its business and consumer listings, so a search for "bags" would yield both padding shipping bags and Prada handbags. When I searched for "bags" again today, the results were all business-oriented, though there was a prominent cross-reference link to women's handbags and one seller was offering biohazard nuclear waste bags "for entertainment purposes." Overall, however, it's all business.


Ebay Business claims it sold over $3.3 billion in business equipment and supplies last year, and provides the factoid that it sells on average a forklift every four hours. There's clearly something going on here, but I am not sure it qualifies as a breakthrough approach.

A key weakness of the Ebay Business model is its scope. By trying to sell pretty much everything, it suffers from discoverability problems. There's a basic keyword search capability that will take you only so far in finding what you need, and categories tend to be overly broad. Indeed, in a published interview just a few months ago, Ebay Business was patting itself on the back for having determined that business buyers don't like to browse for merchandise, and instead want to go immediately to the item of interest. To address this, Ebay Business is rolling out what it calls -- are you sitting down for this -- "item specific categories" which are being introduced at the blistering rate of about five per month. This gets them in synch with concepts familiar to buying guide publishers since about 1900.

It's not that Ebay Business is unaware of the data publishing industry. Right out of the gate, it struck a potentially ground-breaking deal with GlobalSpec that some thought would ultimately link Ebay merchandise to the powerful GlobalSpec parametric search engine to provide seamless discovery and purchasing. In fact, the deal really was oriented more towards building visibility and traffic for both parties.

When we saw the recent announcement that Reed Construction Data had struck a deal with Ebay Business, we again had visions of infocommerce integration dancing in our heads. On closer inspection however, the deal looks like simply a new spin on traditional subscription promotion programs.

Just as data publishers rarely produce good software from scratch, and software producers rarely produce good data content, I think we've got a similar issue with Ebay Business. The back-end is there, but to succeed, it needs a proper front-end, and that could be the basis for many fruitful partnerships with buying guide publishers. Having only discovered "item specific categories" in 2005, Ebay Business will clearly never get there on its own.

InfoCommerce 2005 is proud to announce that Asad Haroon, Chief Marketing Officer of Liquidity Services Inc., has been confirmed as a speaker.

I am putting the finishing touches on a new study we undertook of buying guide advertiser attitudes towards print and online advertising. It's likely the largest survey ever undertaken of this unexplored corner of the advertising universe, and there are a number of eye-opening findings.

Most significant to me was strong confirmation that the boom in paid search isn't really about an exciting new way to reach new customers cost-effectively. Instead, it's about shifting the advertising risk from the advertiser back to the publisher. What's fueling paid search is the pay-for-performance model, where advertisers don't pay unless something happens.

I've spent a lot of time railing about the fact that the click-throughs advertisers are buying are in many cases not worth the paper they're not printed on, but this argument really hasn't sunk in with advertisers yet. Instead, they're excited if not entranced by the notion of only paying for advertising if it works. It's the way they believe the world should work, and in describing this, the word "fair" kept coming up over and over again. To advertisers, "fair" is shorthand for re-balancing advertising risk. Simply put, a very large number of advertisers don't believe deep down they are getting value for their advertising dollars. This may not stop them from advertising, but it does tend to limit their advertising, and this skepticism about value makes advertising harder to sell.

Take away this skepticism, and you open the advertising floodgates, as the explosive growth of paid search clearly shows. While the growth of paid search is certain to slow in coming years, the notion of fairness as expressed through pay-for-performance pricing, appears to be with us permanently. It's something that all advertising-based publishers will have to address. It doesn't necessarily mean moving to pay-for-performance pricing, but without it your advertising story and sales proposition is far less compelling, and you will need to work hard to find other ways to establish value.

While this desire to shift risk is certainly rational behavior, we can't conclude that everything advertisers do is entirely rational. Another finding of our study is that all online media are basking in the reflected glow of paid search. For the moment at least, it appears all online advertising is good, no matter what form it takes. That will make it easier to sell for a while, but increased advertiser expectations will also make this advertising harder to renew.

But lest you conclude that buying guide advertisers may not be all that clever, consider another important finding of the study: the decision by advertisers where to advertise is surprisingly sophisticated and nuanced. Advertisers look hard at the audience for online buying guides and the reputation of the publisher, rating these both much more important to their decision than overall site traffic. That's good news for buying guide publishers, or it will be, once they start taking advantage of it. Another finding of the study is that a large majority of buying guide publishers continue to sell based largely on their overall site traffic.

The overall portrait of the buying guide advertiser is a complex one, largely a reflection of the confusing transition period in which we are all operating. Nobody knows with certainty what's right, leaving all parties open to constantly shifting interpretations of what is right ... and fair.

PS: If you would like to be notified and receive a copy of the table of contents when this study is available, please drop an email to Roxanne Christensen .

I talk frequently, some would say endlessly, about the need for B2B advertisers to understand that a clickthrough that brings someone to a company Web site represents the beginning of the sales process. In all the hype and excitement surrounding pay for performance pricing, it is all too easy to forget that what search engines are selling is a very brief opportunity to engage a presumably qualified prospect. Just as the search engines have to perform in order to get paid, advertisers, too, need to perform in order to generate sales. Unfortunately, this is anything but commonly accepted wisdom right now.

That's why it is refreshing to see one of the leading B2B online marketing agencies say pretty much the same thing -- and say it in writing.

In the latest issue of B2B Magazine, Karen Breen Vogel, CEO of B2B marketing agency ClearGauge, kicks off an article entitled "Analytics Alone Will Not Get the Job Done" by stating, "Businesses with long sales cycles are sometimes mystified by the contribution their Web site can make to the company's financial results." Bingo! Traffic to a B2B Web site, whether organic or purchased, is no different than the advertising impressions generated by a print magazine. Frankly, patting oneself on the back for generating lots of Web site traffic is about the same as patting oneself on the back for running a magazine ad. Great, you did something. But it's what one does after one attracts attention that really matters, because that's what determines how many of these fleeting eyeballs will start the path down the long pipeline to becoming sales. It's as true online as it always was in print.

Breen Vogal elegantly describes the B2B Web site as "...a relationship development or improvement platform." She also contends that, "ROI is only one data point. Contextual understanding is also needed to make adjustments and create Web pages that spur action, combat buyer resistance and lead to improved ROI." She also notes that "Many businesses that invest in analytics software either drown in a sea of traffic and page view stats or measure campaign-specific initial responses and final conversion events. This level of data and insight does not reveal what site visitors really want or show their relative financial value to the pipeline. Businesses need to develop a framework to gain both deep customer insight and pipeline visibility."

This translates to me as a very positive shift on the part of B2B advertisers from an obsession with traffic generation and maximization (an obsession unfortunately shared by many publishers), to a new focus on working that traffic to generate concrete results. After all, it's only a short leap from there to eliminating garbage traffic to better focus limited resources, and that's nothing but code for quality over quantity. More subtle, but equally important, this will represent tacit acknowledgement by advertisers that publishers can only do so much to help generate sales. Ultimately, it's up to the advertiser.

If this shift comes to pass, publishers will be in a better place along with advertisers since each party will be returning to their natural role of doing what they do best. Interestingly, it will also confirm that the rules that drove the pre-Internet world are replicating themselves online. Tools and terminology have changed, but roles, functions and objectives have not.


We're pleased to announce a Model of Excellence award for 2005 has been awarded to Carroll Publishing for GovSearch Suite.

For a handy reference to Models of Excellence winners for 2005 and years past, please visit our awards page for the complete lists and full details.

Maybe it's just a strange string of coincidences, but in conversations with a number of publishers this week I've heard exciting, even mind-bending ideas about new applications for paid search. What they all had in common was they took paid search in unintended but beneficial ways, and the publishers, and not the search engines, are poised to reap the benefits. Whether the search engines will ignore these new applications, attempt to take them over, or even ban them remains to be seen, but the key is to think of paid search not as an advertising medium, but more as a targeted delivery platform.

Since the publishers who share all these new ideas would be less than thrilled to see them described in this weekly column, all I can say is trust me: there are some interesting publisher-driven innovations in the pipeline. But to give you a sense of how paid search is beginning to change shape, we can look at publicly-announced programs that happen to be in the employment field.

Zigg's (a Model of Excellence winner which will be demonstrated at InfoCommerce 2005), hosts standardized "online profiles" of business professionals. The subscriber, the businessperson, controls and maintains his own profile.


As you would expect, you can search these profiles on the Zigg's site, and subscribers can point people to their profiles. But Zigg's goes one step further, offering a subscription upgrade that turns the subscriber's name into a paid search term on the major search engines, improving both discoverability and visibility. I am sure the search engines didn't see individuals as big users of paid search when they launched it, but Ziggs has worked it into a seamless package for those business professionals who value increased Web exposure.


Then there’s TalentScope which has its own innovative use for paid search: a new twist on help wanted advertising. Employers can now work with TalentScope not only to place online help wanted advertising on its network of job boards, but they can also convert the position into paid search terms, allowing the advertiser to reach the elusive market of passive job-seekers who might be interested in the position, but aren't actively searching for a job.

A number of buying guide publishers are moving to similar models, as described in our recently released report, Online Buying Guides: Making Sense of What's Happening Now. Some yellow pages publishers have been quick to move into the role of marketing agent for the search engines, which is certainly one way to get a piece of the paid search pie. But a more innovative, sustainable and profitable approach is to create new offerings that closely couple your data offering with paid search engine marketing in ways that offer both convenience and added value to your customers. It's great to see buying guide publishers are now leading the way in an environment that has been unalterably changed by the search engines' introduction of pay-for-performance. Adapt and flourish.

Verisign's recent – and odd – acquisition of Moreover Technologies made me wonder how it was positioning itself these days. During a quick spin through its site, the first thing I noticed is that it has dropped its intriguing old tag line "the value of trust." It still offers a program called "Verisign Secure Seal" which proves to site visitors that credit card and other sensitive data is transmitted in encrypted form, but aside from that, it seems to have morphed into a high-end hosting and transaction processing company.

I also received a press release from ConsumerWebWatch.org, a non-profit, grant-funded group formed by Consumer Reports. Next week it will be issuing the results of a major study of Internet user attitudes towards Web site trustworthiness. ConsumerWebWatch has done lots of research about trust on the Web, but to date has been better at raising issues than providing solutions. One of its main initiatives is to ask Web site operators to pledge to abide by five general guidelines it has developed that it feels improves a Web site's credibility and overall trustworthiness. For all of this organization's concerns about trust, this doesn't strike me as a very aggressive response, and the very short list on its site of pledged companies seems to confirm this.

This got me thinking about "the state of trust" programs on the Web. One of the earliest initiatives in this area was TRUSTe.org, another non-profit dedicated to building trust in the area of information privacy for Web site visitors. TRUSTe has introduced a number of innovative offerings since it was founded, yet in its seven years in existence, has grown to only 1,300 members, albeit very large companies for the most part The Better Business Bureau, a natural player in the area of trust, offers both a business "reliability seal" and a site privacy seal program. Despite its strong brand and five years in the market with this program, it appears to have convinced only around 25,000 businesses of all shapes and sizes to participate Of interest to database publishers, D&B has also entered the fray with its D&B Web Seal program, which a business can place on its site to demonstrate it is listed in D&B, is not in bankruptcy, and does not meet D&B's "business deterioration criteria." A list of participating business as of December 2004 suggests D&B has signed up fewer than 500 firms in the United States.

This list only scratches the surface. Depending on definitions and approaches, there may be as many as two dozen firms offering certification or verification programs addressing issues relating to trust. The need is there -- at least the vendors think so. So why have none of these programs taken root in the marketplace? I think the key issue is how to offer customers a concrete guarantee of satisfaction that is so compelling that it influences purchasing decisions (although InfoCommerce Model of Excellence winner ValueStar comes close). Satisfaction, particularly where services are concerned, is in the eye of the beholder. That's a huge variable that translates into risk for any third party trying to assure satisfaction. For this reason most of the operational certification programs have pulled their punch. Most offer very little in the way of added confidence for reasons of cost and liability. To meaningfully audit a Web site on an ongoing basis for any specific type of compliance is expensive, which is why most certification programs are based around written pledges to be good, rather than attempting to require proof. Similarly, arbitrating complaints and disputes is messy and expensive, so these organizations tend to stay away from that as well. Even trying to ascertain that a business has appropriate licenses and insurance is labor-intensive and fraught with risk if a mistake is made. It's a dangerous world, and ironically it may be even more dangerous being in business to try to reduce this danger. That's why most trust-based certifications devolve to "we think they're okay because they told us so," or "we haven’t heard anything bad about this outfit."

To truly monetize trust, somebody is first going to have to provide a solid basis for trust.

Q: Where does an 800-pound gorilla sit?

A: Anywhere it wants.

It's an old joke, but it neatly sums up my feelings about Google, a company whose current focus seems to be on gaining control (and a percentage) of every single dollar spent on advertising in every medium, and some days seems well on its way to getting there. That's why news of a not-yet-launched offering called Google Base is potentially so scary.

Google is apparently playing around with the idea of offering to anyone a free online database service. You will (we think) be able to customize fields to some extent. You will (we think) be able to manually enter or import data into it. The service will (we think) be offered for free. Here's where it gets interesting ... and scary. Users can enter whatever they want in a structured, consistent form. Google then will index this content and include it in its main search engine and who knows where else. This gives users the ability to expose (and sell) all sorts of things through Google without even having Web sites of their own. The scary part of this is that a manufacturer, for example, would have the ability to upload all its product data and have that data fully indexed and discoverable through Google. With convenient, powerful and free online exposure like this, who needs to advertise?

That's exactly what is concerning so many publishers. Online buying guides suddenly look a lot less compelling by comparison. The really galling part is that, while putting pressure on buying guides publishers, Google would be able to monetize this free service by selling advertising around it. What Google Base represents is the ability for advertisers to bypass the paid intermediary (publishers) in favor of a free intermediary (Google). It's not hard to guess which will resonate more with advertisers And it's not just data publishers who are concerned. Newspapers think it could cripple their classified advertising businesses. The Wall Street Journal suggests that Google Base could put serious pressure on eBay. You can even argue that this puts Google in the content creation business. Should Google Base cause Google to become enamored with structured content, there's no telling what might come next. Since Google Base effectively would allow anyone to "pour" in seemingly unlimited amounts of content which would all be immediately indexed, it's not at all clear what uses (both good and bad) could be found for this capability, and its unintended uses may prove as destabilizing as its intended uses.

And, since Google Base may never even be launched, this is all speculation. A lot of things would have to go right in order for it to truly threaten any existing online publisher, though even an unsuccessful venture can really muck up a marketplace in the process of failing. It also suggests that Google remains tone deaf about information publishers, partnering when it suits, competing when it suits, and often trying to do them both simultaneously.

It's an 800-pound gorilla thing, so we wouldn't understand.

Well, the big buzz this week was around Amazon, which is going to offer books online, in whole or in part, for a fee. This is generally viewed as a publisher-friendly response to Google’s library scanning project. A few quick thoughts on both initiatives:


The Google Print Library Project, as described by Google, actually sounds very innocent to me. Google will scan and make available the full content of out-of-copyright, public domain books. But for the in-copyright books it proposes to scan, it intends to only display a small snippet containing the text surrounding searcher's key words, and nothing more. As Google describes it, the objective is really discovery of books, not delivery of their content. I'm not sure why this isn't good news for publishers. This may once again be Google's ham-handed public relations raising more ire among publishers than the program itself. Book publishers are so irate that the Association of American Publishers has filed a lawsuit against Google on their behalf.

Interestingly, if the publishers get their way, it may be a boon for data publisher R.R. Bowker, a unit of Cambridge Information Group. That's because the publishers want Google to check ISBN numbers (issued by Bowker in the United States to determine what books may be scanned. Ah, the magic of being in the middle!

Let's move over to Amazon. Nobody can doubt that Amazon knows how to sell books online, but parts of books? May I gently inquire how many people will want to buy a single chapter of a novel? On the B2B side, there have been a number of ventures launched to sell market research and other professional content "by the slice," down to the level of individual charts and sets of statistics. While everyone at the time saw this as an "obvious" opportunity, there don't seem to be a lot of home runs in this area. My suspicion? Those business people willing to grab an out-of-context chart off the Web from a source of unknown credibility to throw into a presentation aren't really doing research. They are looking for third-party validation of a pre-determined conclusion. Paying money to get a solidly-researched answer doesn't make sense to them as they already "know" the answer. So while this is indeed a big market, it's not a market that respects quality content, which is why it has been so difficult to reap meaningful revenue from it.

Both the Google and Amazon initiatives will doubtless change shape and perhaps even focus as they mature, making it hard to predict their impact. For now, it seems as if two key Internet trends will be reinforced: better discoverability of content, which is a boon for existing publishers. At the same time, this discoverability will be available to all, enabling smaller publishers and start-ups to compete more effectively with the big players.

Talk about juxtaposition. Just a day after InfoCommerce 2005, while I am still trying to absorb all the new business models and innovation demonstrated and discussed in an intense two-day period, I came across a post by Rafat Ali of PaidContent.org, listing some of his key take-aways from his recent mixer in Washington, DC. One of them jumped right out at me: "The traditional B2B information people are asleep at the wheel...seriously. They deserve all they're getting."

I can't take issue with Rafat's assessment because I don't know which B2B publishers attended his event, but I will state -- strongly -- that there is life, vitality and success in B2B information publishing. This success has been a function of vision, hard work and investment. While some individual publishers won't make it, the medium as a whole continues to advance.

Are the traditional B2B publishers uniformly getting clobbered? What we heard at InfoCommerce 2005 suggests otherwise. Rich Malloch, President of Hearst Business Media, detailed some of the company's activities in the healthcare sector, where they've become so integrated into the workflow of client hospitals that they now actually define the workflow, and are now seeing average contract terms of five years, and where the average life of a customer is now 40 years, and we're not talking about small-ticket sales either. Joe Douress of LexisNexis Martindale Hubbell, a company with a 100+ year history, has re-defined itself online to reach both the B2B and B2C markets, and now enjoys 15 million searches (not mere home page hits) annually, and has become the number one online lawyer directory in the process. Add in some of the stunning growth and success of newcomers like Jigsaw, Zigg's and TechTarget, and what I see is an industry that is humming.

How about creativity? Thomson Gale, another "traditional" publisher, described a fascinating initiative that makes its database content available to the patrons of its library customers, online, at home, and through the major search engines. Jigsaw Data and Zigg's described entirely new business models where users supply and maintain the content, and pay for the privilege.

It doesn't get much more creative than that, and their numbers suggest that the marketplace likes the concept ... a lot.

I agree with Rafat that those publishers with their heads buried in the sand are in trouble, and probably do deserve what they get. But the group at InfoCommerce 2005 evidenced lots of innovation and success, and database publishing in particular will continue to dominate the intellectual dialog for some time to come.

In session after session at the recent InfoCommerce Conference, the word "community" was mentioned repeatedly. Whether it was in the context of a product feature or an entire business model, community seems to be hot.

I've generally been very dismissive of the whole concept of online community. While it remains a popular buzzword, its meaning is tough to pin down. If we agree for the purposes of this discussion that community is some form of online system and venue for users to interact with each other, then community has been with us since the earliest days of the Internet. Indeed, community in the form of chat rooms fueled the early growth of services like AOL. During the dot com era, it was seemingly de rigueur for every new publisher site to have a community feature. Why? They were cheap, ran themselves, created free new content and were believed to make a site more sticky. All good things, except for one small problem: they rarely if ever worked successfully.

Since then, online communities have taken many forms, but very few have been databases. Yet community-built databases have a good track record. Look at the current success of Wikipedia, a community attempt to build a free online encyclopedia, or look at the Internet Movie Database (which was a volunteer, community effort until acquired by Amazon). A case can be made that there is greater willingness to contribute to building a truly useful reference than there is to slinging questions, comments and insults back and forth. Certainly, the issue of externality exists with a community database (though clever incentive programs tying access to contributions might perhaps address this), but a community database seems to have a lot less baggage than other types of online communities. Time is less of an issue since a growing base of reference data is being constructed. Anonymity is less of an issue since the content is rarely the least bit controversial. Noise gets filtered out through the nature of the community and its structured input.

I certainly agree that a community database is less interactive than a community chat room. But though it sounds counterintuitive, it is looking like you can create a more sustainable community by limiting and structuring interaction. And who owns all the valuable content that users are contributing? Whoever hosts and structures the interaction, and nobody knows structured data better than data publishers. Opportunity knocks.

I am just back from the Newsletter & Electronic Publishers Association (NEPA) conference in Orlando where a remarkable new online marketing tool was revealed to me. Let me tell you what it is. Are you ready? It's called -- the telephone.

Yes, it appears that for a growing number of publishers, telephone ordering is the season's "must have" Web solution. Publishers of specialty information products (and a number of our data publishing clients) are noticing significant lifts in both the volume and size of orders when a telephone number is added to online order forms (one publisher told me that his average order increased nearly 20%). This is true for both B2B and B2C marketers. The underlying dynamic is straightforward but significant. Order size increases when a phone number is added primarily because it creates an opportunity to upsell the customer. The number of orders increases because customers can get a quick answer to specific product questions.

So while the Web makes it easy to create what is effectively an online vending machine, you should not fall victim to the self-service approach to selling. With our industry now on a relentless push to create deeper and more sophisticated datasets and software tools, we are necessarily adding complexity. At the same time, our customers have increasingly specialized and sophisticated uses for our products. That means our products are becoming harder and harder to sell "self serve" from a Web page.

I worked with a very successful print directory publisher about ten years ago who told me the thing he liked most about directory publishing was that orders came in the mail, and he shipped out his directories by mail, and there was almost never a need to actually talk to a customer. To him, things couldn't get much better than that. Indeed, he semi-seriously contemplated getting an unlisted phone number to further insulate himself from his customers. This wasn't exactly a clever business idea, but in an era of simpler products and less competition, you could act least contemplate doing business that way.

In this new era of technology, when you can now easily and perfectly avoid customer contact and get them to do their own order entry to boot, it's actually more important than ever to maximize customer contact. It's not just that you can generate more orders and more dollars per order. It's that customer relationships built on self-provisioning aren't really relationships at all.

Though the Internet has imposed many changes on database publishers, one significant impact is just now being felt: the growth of decentralized and virtual business entities. We did a study a few years back and found a remarkable 23% of all business Web sites provided no physical address for the company. Rarely is this just a sloppy oversight. In the majority of cases, these companies are actively trying to disassociate themselves from a physical location. Why? In some cases, the company has no physical location. In some cases, the company is trying to mask that it is a home-based business. In a good number of cases, the company wants all its customer interaction to be via the Web. For some online merchants, a fixed location is viewed as a potential detriment to sales, because some prospective buyers might judge them to be less responsive or less accountable given their distance.



Further complicating the situation is that many of the same companies also rely exclusively on toll-free numbers, further masking their physical location, and 8% of these companies offer no phone number at all. Not surprisingly, these companies rarely offer much in the way of executive names on their sites either. Clearly, it is becoming increasingly difficult to gather contact information on companies that offer only limited information on their Web sites and only want to do business by email.



This, however, is only part of the problem. There is also a trend towards organizations with lots of physical offices but no clear headquarters (something I see increasingly with law firms and consulting companies). Closely coupled with this trend is the growing number of company employees that are not associated with any fixed location, generally because they are in constant motion, so even a nominal address for them is largely meaningless.


Another rapidly changing part of the business environment is the move towards home-based workers. Should they be listed at their home addresses? Should you even list home addresses at all? Are they doing business on their home phones? Are these lines subject to consumer telemarketing restrictions? It's not clear And if all of this isn't enough, we will likely soon feel the impact of voice over Internet (VoIP) telephony technology. One of the nifty features of VoIP is that it, too, is not beholden to physical location. A VoIP customer in New York can have a San Francisco or London telephone number on request.

All of these changes are pushing data publishers to re-consider their database structures, the relationships between individuals and organizations, their data integrity checking logic (remember area code/zip code concordance?). As an industry long associated with contact information, we've developed data compilation strategies and data verification tricks based on what was terra firma: the need for business entities to have fixed locations and for employees to be associated with those locations. But increasingly our new value proposition will be based on how well we are able to provide contact information when there is no "there" there.

Maybe it's just me, but surfing the Web lately has become an increasingly frustrating experience. Without question, the major search engines have made tremendous strides in expanding the scope of their coverage, increasing the frequency of their updates, and most importantly of all, discerning the relevancy of search results. This is all for the good. Yet at the same time, an equal if not greater amount of intellectual energy and creativity has been expended on getting between users and their search results in the name of commerce. And the cumulative impact of all these tricks and games is beginning to counteract some of the true advances in search.

I first noticed this with paid search links. Every so often, I'd be searching on something incredibly obscure, and my search results would contain a paid ad from eBay claiming the item was for sale on its site. "Not darn likely," I thought, and after some searching on eBay, I determined I was correct. eBay wants me to visit its site so badly it's willing to misrepresent itself to maximize traffic. I am seeing a number of retailers doing this as well. Type in a search for Brand A, and you'll see lots of links to retailers claiming to sell that brand. Click on the link, and you'll find they sell only the competitor to Brand A. Clever online marketing? No, because the retailer has angered me by wasting my time. Good for search engines? No, because these experiences teach me to discount and distrust paid links.

You've probably also noticed the growth in pseudo-directories; sites that you land on by accident (or, increasingly, by misrepresentation) that contain endless lists of paid links, or search features that produce only lists of paid links as results. A close cousin of these sites are the notorious "link farms," sites created to make other sites look more popular and thus raise their ranking in search results. There are also a growing number of links that re-direct you from content you want to see to content a merchandiser wants you to see.

Is this a problem? I think it is, because it reduces the ability of the search engines to deliver a fast and dependable result. Also, keep in mind that I am just discussing navigational sleight of hand. This doesn't even begin to address the growing issue of content accuracy and trustworthiness.

The more I think about all these issues, the more I see a strong future for some form of vertical search. Interestingly, vertical search to date has focused on presenting users with highly focused content, which has value. That's all well and good, but the more I use the general search engines, the more I think that the real value of vertical search will be not only that it provides focused content, but that at the same time it is also providing filtered content, creating treasure by taking out the trash.

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There has been lots of ink expended this week on the AOL/Google deal, but there is one angle I haven't seen addressed -- the nature of the deal itself and the eerie feeling of deja vu it creates. Either memories are short or all is forgiven, but it now appears okay for the "do no evil" folks at Google to pony up $1 billion for a piece of a company that not too long ago paid a $500 million fine for cooking its books -- apparently, inflating ad sales was much easier than addressing a business model that was in freefall. Okay, I am sure AOL is in a different place now, chastened after a long fall from grace. It now has new management and only a few ongoing criminal complaints.

One thing that characterized the "old" AOL was its enormously complex advertising deals, written as much for publicity value as revenue potential, where few people truly understood the full scope of the deals, specifics of which dribbled out to the public over the course of many months. There was also a fondness to throw equity and options into the mix, just to make things sexier. The complexity of these deals made it impossible for outsiders to truly assess their value. They were often structured with complicated advertising swaps and credits that created a fertile environment for creative accounting.

Another characteristic of deals done by the "old" AOL was for AOL to inject itself into many aspects of a partner's business. That made these deals hard to terminate, because AOL had insinuated itself so deeply, and locked itself in with layers of contractual complexity on top. In addition, this deep embedment allowed AOL and its partners to make lots of noise about synergy, when in fact most of the "synergy" consisted of a laundry list of initiatives ranging from pointless to impractical.

Of course, Google did its deal with the "new" AOL, so I am sure there's no need to worry that AOL may be reverting to form, or that Google had the wool pulled over its eyes, or that AOL played the Microsoft card to perfection and its own advantage. Nope, Google now has the power and surely Google drove this deal and Google will be getting more than it is giving.

We also shouldn't forget who's running the show here. After all, Google bought a stake in AOL, not the other way around. So you won't be seeing graphical AOL ads on Google's pristine home page, and you won't have AOL salespeople selling Google, and you won't see Google hawking AOL memberships and TimeWarner magazine subscriptions. You also won't see contorted Google offerings designed primarily to prop up AOL subscriber numbers (remember when AOL tried to "fence off" the Internet to force its subscribers to only look at its preferred content). Most tellingly of all, you won't be seeing CD-ROM's emblazoned with the Google logo hitting every doorstep in America. Oh wait, here comes the mail now ...