Thursday, May 19, 2011

The Conduit Toolbar Deal: A Bing Victory, Or Strategic Move By Google?

Today I read RKG's [as usual] brilliant blog piece on the impact of Conduit switching from Google to Bing. In it, RKG's Mark Ballard shows that, in getting Conduit to switch, Bing has taken ~1% search marketshare from Google. He also showed that Conduit traffic converts at 2/3 the rate of traffic.

I don't recall this change, which happened during December 2010 & January 2011, being discussed by Google in its Q1 earnings call, despite the fact that it possibly contributed to their Q1 miss (the one that destroyed ~$12-13B in market cap). IMO, Google takes great pains to appear supremely strategic, and sell-side analysts, for their part, are easily fooled because they lack fundamental knowledge of the SEM space.

That said, the big question in my mind is: did Bing take Conduit away from Google, or did Google dump Conduit? AllThingsD's Kara Swisher wrote about this, but commenters to the article disagree on this point. If Bing outbid Google in a deal Google wanted to keep, then one could argue that Google was handed a big, strategic loss. If, on the other hand, Google was no longer willing to pay what they had been paying to Conduit, then Bing took the bait and forked over a lot more dough than they should have for the 1-1.5% search marketshare this gives them.

My opinion? Bing outbid Google, and will do the same on a number of other major search distribution deals to come, including Firefox later this year. Bing monetizes search traffic at roughly the same rate as Google, and MSFT's cash hoard will now be used to wreak havoc on Google's growth in what may, just may become a sustainable advantage to Bing's search business.

My brother once took advantage of Bing's cashback rewards to buy several 1oz gold krugerrands via a Bing merchant for 30% off. That was 5 years ago and it appears Microsoft is not done throwing serious, serious coin around to buy their way into search. Meanwhile, 190 people in San Mateo are about to get a lot richer.

Friday, May 13, 2011

Miva is Vertro: Different Name, Same Outcome

Non-value-adding search distribution partners always end up getting screwed by the big guys, making small-cap search engine stock plays a bad bet.

SMX Advanced 2011: Exhibitor analysis

I ran into Danny Sullivan at the airport a couple days ago on my way to Seattle, but that's about as close as I've been to my old world of SEM in a long time. Last year I took a spin in the world of dynamic display, joining Dapper, an Accel-funded startup. We were acquired in Q4 by Yahoo!, and now I run Sales for Smart Ads, Yahoo!'s dynamic display business.

Anyways, being in Seattle got me to thinking about all my trips up there in years past to attend SMX Advanced. SMX Advanced is far & away the best search marketing event, and the only one that consistently has sessions worth attending. [NOTE: judging by the fact it is sold out, the industry must agree with me.]

Looking at the 2011 exhibitor list, though, much has changed. Whereas before it was mainly SEM tools, SEM agencies and keyword intelligence tools vendors, the crowd of firms paying for exposure has changed in two key respects:

1. SEO tools vendors now are on par with SEM tools vendors (7 vs 7):
BrightEdge, Conductor, SEOMoz, SEOClarity, webposition, webCertain & The Search Monitor

2. Dual SEM/SEO agencies and SEM/SEO agency/tool hybrids:
Efficient Frontier, Covario, Zeta Interactive, AdSage, BruceClay, Deluxe for Business & AimClear

From these changes, two key trends emerge. First, SEM as a growth channel has clearly slowed down for advertisers on an individual basis, such that they now have to take SEO more seriously. And second, the hybrid agency/tool business model that Efficient Frontier pioneered back in 2003 has become accepted and embraced by both advertisers and investors.

Last, while I won't be attending (I need a miracle, Danny!) I'd attend the following sessions if I could:

Day 1 - Human Vs. Machine: What’s The Best Way To Manage Paid Search? (12:15-1:45). Since I beat down a rabble of agency types who would've liked to convince the audience that bid management is dead back in 2007, the debate has turned to the relative value of human vs machine.

Day 1 - The Modern Online Marketing Plan: Maximizing the SEO, PPC and Social Mix
I fully expect Covario's Harrison Magun to drive a data-driven session and show the world again just how on top of their game Covario is. Harrison, yeah, I'm calling you out; you guys have great data, so let's see it!

Day 2 - Leveraging SEO Power Tools
With lots of inhouse and VC-based investment in the SEO tools space, this should be a great session. Specifically, it'll be interesting to see how Amazon's internal SEO tool (Advanced Mechanical Turk) compares to the best the VC-backed world has to offer. Wait! But there are no VC-backed power SEO tools on the panel! Conductor, BrightEdge, BloomReach et al., you had better be in the audience & ready with tough questions, or else the crowd is likely to end up thinking that they can build vs buy. . .

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