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Google and Yahoo to have Rival Snapping at their

BusinessThe 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 providing.

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 advertising budgets. 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," Gross said.

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 launch. 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 like Snap."

Reuben Dunn
Search Engine Optimization Company


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