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The Honolulu Advertiser
Posted on: Tuesday, March 23, 2004

Revamped searches on Yahoo may yield questionable results

By Leslie Walker
Washington Post

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

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

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

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

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

This competition is good news, because Google was gaining too much market share. In December, it processed roughly three out of every four Web queries, according to the Web traffic measuring firm comScore Networks Inc.

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

So what worries me about Yahoo's new search? When I run comparison queries at Google and Yahoo, obvious differences jump out. First, Yahoo devotes a lot more space to ads — on some queries, you might not even notice the regular results for all the ads.

Second, Yahoo places ads in a more prominent position than Google, with fewer visual cues to separate them from non-commercial results. This translates to more clicks for advertisers and more money for Yahoo, since advertisers pay when people click on their ads.

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

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

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

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

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