fantomNews™ — the ultimate know

(rt) In a well informed piece Joe Holcomb of Blowsearch analyzes the state of contextual advertising in general and the situation of middle market search engines in particular.

The reason why middle market engines are still quoting increasing revenues across the board because they are doing more volume with their core advertising clients: overall, however, they have lost a significant part of their clients to the big players Yahoo! and Google. Joe argues that this is not sustainable in the long run and we tend to agree: remaining second if not third choice over an extended period of time, while the big contender are filling their own coffers to the brim with profits and pumping serious resources into R & D.

Another problem rests in the fact that most middle segment players are driven by the same VCs who used to sponsor Dotcom Bubble 1. (Or, if not the same in all cases, they seem to adopt an indistinguishable mindset which isn’t too confidence inspiring.) If your whole business model is focused on selling out and “making bank” some day, you’re simply not given to actually risk your skin for some truly innovative stuff nobody’s tried out yet. Which, of course, is a basically reactionary, derivative existence with no easy way out.

But it’s not just the minors he views as being in jeopardy. Here’s his take on Google:

Google is a perfect example of a company that is missing the boat. Yahoo has expanded services, built a competitive product, and still rakes in millions in subscription revenues every year. Google gives everything away for free with the “hook” that it can be paid for with the clicks generated on the advertising services they provide. Yahoo has built a clearly sustainable model that will carry them for many years to come. Google on the other hand is building itself a crutch, on which, its entire business model could collapse in very quick fashion. Where are Google’s ancillary revenue streams?

There’s lot to be said for that view, and though we’re currently seeing Google pushing their ad revenues in a major way, the abounding rumors about their launching their own browser, OS and possibly even proprietary hardware do start to make sense within this context.

Back to the middle players:

The middle market lacks innovation, correct motivation, and drive. It lacks the necessary firepower to take on the Google’s and Yahoo’s because it isn’t hungry anymore. The drive to succeed has been replaced with the drive to hit revenue goals. The correct motivation for all the middle market search players should be to enhance the user experience and provide tools and services necessary for businesses to sell more and users to find more online.

Which certainly does not bode well for likes of FindWhat (rife with other problems of its own), Mamma and Looksmart (look-who?) …

An interesting read at:
→ Why Middle Market Engines Are Missing The Boat

You read about Blowsearch here:
↗ The End of Click Fraud? Hm.

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