Overshadowing LookSmart’s recent release of its new auction-based pay-for-placement offering was the announcement on Monday detailing the loss of its MSN listing syndication. Of course, the Sponsored Listing product announcement did not mention MSN syndication, which was a pretty good indicator that something big was about to happen.
This is just another day in search marketing. One company drops another’s listings making it more confusing for advertisers to figure out where their paid listing money should be spent. A barrage of questions initiated by hype has once again overtaken search marketing. As always, true believers, I stand ready to help.
Sure, LookSmart is going to lose some traffic. Yes, this is a dismal announcement that plunged LookSmart stock into the depths with Luca Brazzi. No, the site is not yet ready to sleep with the fishes and this could actually be very positive news for advertisers. Here’s why.
Tears of Joy
Monday morning, I got a letter from Jason Kellerman, LookSmart’s Chief Executive, delivering the MSN LookListing product bad news. After mid January, listings would no longer be carried by MSN. Kellerman did offer a link to the Sponsored Listings rising star. This move precipitated at least one really big question.
If MSN represented close to 65% of LookSmart’s revenue, why would LookSmart introduce a bid-for-placement product that was bound to ruffle some feathers at MSN?
If you buy into (bad pun) a story that appeared in Business Week on October 6th that inferred some pretty serious allegations against paid inclusion providers like LookSmart and Inktomi, the inclusion model was heading down for the dirt nap anyway. Business Week’s probe suggested that paid inclusion listings were sneaked into results amid the unbiased (who are we kidding) spidered results and obvious (that would be sponsored) advertiser links. The report also suggested that sites that did not advertise in paid inclusion might have been deliberately removed. Was that wrong?
So, if the redundancy nightmare didn’t get LookSmart (or inclusion syndication as a whole) it appears consumer activist Boogie Man would have. This inevitable fate of inclusion makes the Sponsored Link program a stroke of necessitated mother of invention genius.
The Business Week report is the kind of journalism that usually sends me off on a rant, so I must submit a question to the publication. Why pick on inclusion providers? In my years of working in search marketing, I have witnessed some pretty shady business practices all over. From launching my client’s search program only to target said client’s biggest competitor for bids the next day to offering my clients a cheaper presence for the same inventory with a direct relationship, clearly there is enough mud. So if you are going to sling it, sling it on more deserving targets.
The Golden Calf
The world awaits release of Microsoft’s much-hyped yet unseen operating system, Longhorn. In many a press release and “accidentally” leaked sneak peak, Bill Gates and company promise a totally revamped OS built on a new file system that gives users a single route to data, regardless of how that data is created or where on a PC or network it's stored. A fair assumption about Longhorn functionality would be that it includes searching the Web.
Though MSN representatives have indicated a desire to build a better model, search decision makers are standing by their commitment to user experience and search marketing efficiency statements when questions are posed about the next big predicted partner drop, Overture. Since Yahoo!’s proposed purchase of the paid search syndicator in July (a move that was recently completed) the Overture listings that appear within MSN search results would seem to be a competitive conflict. Removing Overture listings now seems inevitable, but who is to say those listings can’t be provided by another listing syndicator while we wait for Bill’s next OS opus.
Save the Swan Song for Later
As for LookSmart, at least one employee I spoke with sounded off with a staunch survivalist attitude, “We have faced adversity before with changes in structure and partnerships. We did an about face and turned things around then, and we will do it again.” Now that’s moxie. I like it.
About the author: iMedia search marketing columnist, Kevin Ryan clearly needs to find himself a life. In addition to his weekly column, he actually spends his free time covering search news to bring you the latest and greatest information ad infinidum. Kevin is currently Director, Market Development at IPG’s Wahlstrom Interactive where he provides guidance in directional online marketing to Wahlstrom’s prestigious list of clients and sister agency brands.