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Pandia Post Newsletter No. 13 2002, May 2002, Part 2

SEARCH ENGINE NEWS

The Look-not-so-Smart Directory

There are really only three Web search directories that count. There's the mother of them all, Yahoo!, there's the volunteer based Open Directory Project and there's LookSmart.

Or maybe not for long. By definition a directory is a catalogue of sites handpicked by human editors. The overall goal is to make a selection of high quality sites that are relevant and representative, so that you spare the searcher from wading through hundreds and hundreds of search engine results.

But what if a directory starts to sell directory inclusion on a pay per click basis, letting websites pay a fixed sum every time someone clicks on a directory link? What if the directory removes site if the website owners are not willing to pay? One day the site is seen as highly relevant, the next it is not. Can this really be considered a search directory, or is it nothing but a provider of pay per click text ads?

Now these are important questions, because this is exactly what LookSmart has done. On April 9 they sent out the following mail to websites owners that had paid to get their websites listed for -- what they probably believed -- was forever:

"Dear Valued Customer:

We have exciting news to share. LookSmart is pleased to announce the upcoming launch of Small Business Listings. Based on feedback from customers like you, we've merged and enhanced the benefits of our "Submit" and "Site Promote" products into one product called Small Business Listings. When it launches, Small Business Listings will take the place of the current products, and your existing listing will be automatically upgraded.

We're giving you a preview of these great changes now because you're a valued customer. There is nothing you have to do at this time -- just wait a little longer to hear all the details. We'll email you with a lot more information when Small Business Listings launches in a couple of weeks..."

Sounds great, doesn't it? Remember, this mail is sent to people who have already paid a one time fee to get their site listed in LookSmart. LookSmart continues:

"Small Business Listings will give you the opportunity to get:

  • Even more traffic from LookSmart's entire network of partners.
  • Better-targeted traffic by selecting relevant keywords.
  • On-line click reporting for your listings.
  • Performance-based pricing - a flat price per click-through to your site.
  • Exact control over your monthly traffic level.

Because we want to ensure that your site's listing continues to be a valuable marketing investment:

  • Your listing will be automatically upgraded to a Small Business Listing.
  • You'll get all the benefits of our new product features.
  • LookSmart will credit your account with a generous number of FREE clicks to ensure that you continue to receive valuable traffic.
  • If you have an active Site Promote listing, your monthly charges will automatically be applied to your Small Business Listing traffic, in addition to the free clicks we provide. "

Hidden behind this corporate we-care-for-you talk are these simple facts:

  • LookSmart is introducing a pay-per-click model for commercial listings
  • LookSmart is asking websites that have already paid US$ 199 to be listed in the directory to pay another 15 cents per click through.

Yes, LookSmart does give their "valued customers" some clicks for free, namely US$15 per month for the next 20 months, but as any webmaster can tell you, with a price of 15 cents a click these clicks are soon depleted.

The price is fixed -- i.e. there is no auction like in Overture -- and you can not decide what keyword phrases are to trigger your listing, meaning that commercial sites will have to pay for click throughs made by searchers looking for information, not commercial goods.

The latest issue of Search Engine News, the monthly newsletter published by Planet Ocean, includes a very interesting 18 pages long analysis of the new LookSmart policy (see http://www.pandia.com/sc/po-senews.html)

Planet Ocean notes that they cannot imagine "any scenario where we'd change our customers' deal after-the-fact without their permission." They then warn their readers against trusting anyone at LookSmart: "They've proven they're inclined to enforce the letter of their (one-sided) contracts without regard to what people believe to be the intentions of their agreements."

We would add that searchers cannot trust LookSmart either.

It is certainly true that the LookSmart directory will continue to include non-commercial listings provided by the Zeal directory (http://www.zeal.com/). We also expect LookSmart to keep some valuable non-paying commercial sites in their database. Still, it will be hard to see the difference between a pay-per-click search result (which in our opinion is nothing but a glorified text ad) and a regular directory listing.

Yes, LookSmart will impose strict rules on the "quality" of the pay per click listings, but so do Overture and Google AdWords.

Which brings us to Bill Gates' MSN.com portal. The only reason for paying for an inclusion in the LookSmart directory in the first place, is that LookSmart provides results to the MSN.com search engine. MSN already includes pay per click results from Overture under the heading "Sponsored results". Now there will be sponsored results under the heading "Web directory sites" as well.

We doubt that MSN can get away with this, which may ultimately force them to drop LookSmart altogether. That would be the end of LookSmart.

Go to the next page: On the Traffick newsletter and BBCi Search >>>


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