Search is a commodity - Ad serving is the business

The headlines are screaming about the Alexa (Amazon) announcement that they will offer the Alexa index and computing platform as a web service for a fee.  Monster Mash, Re-scramble of the search game, Alexa Offers Fee Based Vertical Search Service, and a host of others are falling over themselves touting this as a historic moment, a turning point. Sorry to rain on the parade, but I don't think so. The search business is not about the technology, it is about the advertising network. The disruption is in the business model, not the technology.

Search has been a commodity for years. There are probably 50 search engines and indexes in existence today. Search is available on virtually any web site, in any browser, and in many applications. Search is ubiquitous and free to users. Search is syndicated to many sites, even some of the biggest sites in the world. AOL doesn't have its own search engine, it outsources search to Google, and perhaps others.

There is very little difference in the size, scope, accuracy, timeliness, or technology involved in any of the search engines. They are all good, and there are hundreds of them beyond the well known Google, Yahoo, MSN, Ask Jeeves, etc. Adding Alexa to the mix will not change things significantly.

Meta search engines have been around for nearly 10 years. Dogpile is one of many meta search engines that basically take your search query and submit it to all the search engines. Then they assemble the results, eliminate the duplicates, and rank them for presentation to you. This all happens in the background in less than a second.

The search business is not about technology, they are all about the same. It is about attracting a huge audience for serving advertisements.  Google and MSN are trying hard to make a deal with AOL to offer their search service to the AOL audience. The prize is a huge audience to serve ads to. Advertisers will flock to the network that has the biggest audience and reach.

Google disrupted the search business by offering a clean (no banner ads) service that was fast and accurate. They attracted a huge audience of people who just wanted to search, when all the other guys (Yahoo, Excite, Lycos, AltaVista) were building big consumer portals with lots of "sticky" content. Google disrupted the business side of search by delivering "text only ads" and auctioning them off to the highest bidder in a self service auction.

Alexa is not disruptive. Yes, there will probably be some new niche search services built on top of it, but I don't expect they will gain much traction.

To present the other side of the story here is an excerpt from John Battelle who authored "The Search" and writes Searchblog.

Every so often an idea comes along that has the potential to change the game. When it does, you find yourself saying - “Sheesh, of course that was going to happen. Why didn’t I predict it?” Well, I didn’t predict this happening, but here it is, happening anyway.

In short, Alexa, an Amazon-owned search company started by Bruce Gilliat and Brewster Kahle (and the spider that fuels the Internet Archive), is going to offer its index up to anyone who wants it. Alexa has about 5 billion documents in its index - about 100 terabytes of data. It’s best known for its toolbar-based traffic and site stats, which are much debated and, regardless, much used across the web.

OK, step back, and think about that. Anyone can use Alexa’s index, to build anything. But wait, there’s more. Much more.

Anyone can also use Alexa’s servers and processing power to mine its index to discover things - perhaps, to outsource the crawl needed to create a vertical search engine, for example. Or maybe to build new kinds of search engines entirely, or …well, whatever creative folks can dream up. And then, anyone can run that new service on Alexa’s (er…Amazon’s) platform, should they wish.

It’s all done via web services. It’s all integrated with Amazon’s fabled web services platform. And there’s no licensing fees. Just “consumption fees” which, at my first glance, seem pretty reasonable. (”Consumption” meaning consuming processor cycles, or storage, or bandwidth).

The fees? One dollar per CPU hour consumed. $1 per gig of storage used. $1 per 50 gigs of data processed. $1 per gig of data uploaded (if you are putting your new service up on their platform).

In other words, Alexa and Amazon are turning the index inside out, and offering it as a web service that anyone can mashup to their hearts content. Entrepreneurs can use Alexa’s crawl, Alexa’s processors, Alexa’s server farm….the whole nine yards.

OK, so the cost of building a search service just went down because you can rent the Alexa index. Is this a whole lot different than the meta search engines using the existing search engines in the background, or sites like AOL outsourcing search to Google?

In the end, the search business is all about building an audience and selling advertisements. The underlying technology to deliver the search results can be custom built, outsourced, or rented. It really doesn't matter. Alexa is just another option among hundreds of existing choices.

Comments

[Jason]

Agreed that search is currently all about building an audience and selling advertisements. And the interesting thing about Alexa is that that may be just the thing Amazon is looking to do.

Imagine this scenario: Amazon attracts dozens of developers to build niche search plays (personalized, vertical, whatever) that in aggregate has a non-trivial number of users (while each search app might only have a small user-base, in total it adds up).

What if Amazon then "enhances" it's data feed by inserting advertising -- either for Amazon products or generic distributed advertising, a la AdSense. Amazon has now created an advertising network for a non-trivial number of eyeballs that can promote its own products or others (for a fee).

[Yakov]

agree for now unless someone builds a new index that will bring search relevancy to the next level and disrupt current business model

[james governor]

can i tweak your argument a little. yes its about the network - but not just the advertisers. the question in my mind is about APIs, developer attraction, and lowering barriers to access. the "fabled web service platform"... its not about building an ad network - because the model here is not about ad serving. its about what calls developers will make when they add ambient search.

there are other ways to make search pay than ads. just like there are other ways to make customers pay for software than ads...

what if you dont get ads but amazon points? yet another business model.

i would be wary of thinking google is the only model for a search business.

[Jeremy Dunck]

I think it's amusing that the only thing people apparently think access to a web index is good for is search.

100 TB of data. For whatever. There are -lots- of business models here.

[Tom Foremski]

Search is easy it is servers plus software/algorithms.

Content is not easy it takes people.

The links have to point to somewhere of value otherwise they are pointless.

The business opp is in content not ad servers.

[saurab]

it’s a good move by alexa….. but the thing to be concerned about is that when you’re opening up an index of this size, it would invite all sorts of spammy SEO-type folks. thats bad. on the positive side, if this gains traction it would mean fewer bots eating up your bandwidth… everyone would go to alexa for scraping data ….. THAT is an exciting prospect. One search platform (ALEXA) + unique ranking algorithm + google adsense for monetizing the search app. cool!