The original concept of Paid for Advertising being
tied to search engine results was almost laughable
when Bill Gross came up with the idea 10 or so years
ago. Since then of course, that concept has turned
Search Engine leaders Yahoo and Google into
multibillion dollar operations.
Gross is planning another coup with Snap.com, "We feel
there is so much more innovation that can take place
in search," he said. "It's hard to say that little
Snap will ever beat Google, but I think we can become
a viable alternative." The idea is to produce more
useful results than the big two are currently
Snap's parent company, Pasadena-based Perfect Market
Technologies Inc., has raised $10 million in a venture
capital round led by Mayfield, a Menlo Park firm. The
plan is to use some of that funding to promote a
system that the people involved believe offers better
value for advertising dollars.
The major search engine operators place sponsored Web
links adjacent to search results - the site owners pay
commissions whenever the links are clicked, even if no
sale is made - Yahoo and Google in particular make a
lot of money from it.
It was originally Gross's idea at GoTo.com, which
later changed its name to Overture Services before
Yahoo bought it for $1.7 billion in 2003. Google
introduced its own version, known as AdWords, in 2002.
Pay-per-click systems have proved very successful
marketing tools but they've generated doubtful
practices too - some advertisers have repeatedly
clicked rivals' links trying to waste their
Critics of paid advertising suggest that up to 20 per
cent of the clicks are fraudulent although others
dispute that estimate - Gross is amongst those who do
believe click fraud to be a serious issue. His program
would offer a "cost per action" system that only
charges if a sale is made.
"I believe the commercial side of search will evolve
toward cost-per-action in the next five to 10 years,"
It could be an up hill ride for Snap. Google handled
1.8 billion U.S. searches last month, giving it a 36.9
percent share of the market, according to comScore
Networks and Yahoo racked 1.5 billion US searches, or
30.4 per cent of the market - in contrast, Snap has
done 16.4 million searches in the nine months since
Others are trying to update systems too. Michael Yang
and Yeogirl Yun who founded MySimon.com, raised $7.2
million in venture capital to back Become.com, a
search operation putting product and price information
side by side.
It was Gross's record that separated Snap from other
startups said Allen Morgan, Mayfield's managing
director. "It's kind of like the Big Bang is happening
right now," he said. "The search market is exploding
infinitely and in all directions. We feel like it's
opening a pretty interesting opportunity for a company