Holidays are great for spending time with friends and family, but also a good time for companies to disclose huge fiscal year write-downs they would rather sweep under the rug. It's a little difficult for a company to hide a $6.2 billion failure after paying $6.3 billion for the company in 2007. Some suggest that Microsoft's failed aQuantive acquisition proves it should exit the online ad business and sell its search engine Bing. One big problem behind that thinking: It's no longer about search ranking and paid-search ads, but rather the data behind the service.
Search engines might have built services to provide easy access to the world's information from desktop or mobile devices, but the underlying data behind the services will generate profits from both online and on-site search. Forget the paid-search ads and how high a company can rank in queries. It's all about the data. Although the aQuantive deal didn’t boost analysts' estimates, Microsoft said its online division improved in other areas, such as revenue per search and market share gains for the Bing search engine.
Microsoft will report fiscal-year 2012 fourth-quarter financial results after the close of the market on Thursday, Jul. 19, 2012. CEO Steve Ballmer remains committed to Bing, but search engines have transitioned from a service to a source of data. Think of search engines and services as a market research tool. Collectively, consumers freely give their thoughts, opinions and intent billions of times daily.
Stephen Scarr, CEO and co-founder at search platform Info.com, believes search engines and the data behind the queries have a "symbiotic relationship." He doesn't think it's a coincidence that Google restructures its privacy policies across all services to create one general rule. "They need to have a holistic view to add value to leverage the data," he said.
Google, Microsoft and Yahoo may have developed search engines to give people access to the world's information, but the data behind each search will rise in financial value. Not the value of traffic to a Web site or the top-ranking results in a search query, but the data from the actions and how the engine can use it to target ads and content. The search data continues to become the foundation for a variety of services, from recommendations and social sites to search retargeting and display ads, and demand-side platforms.
Back in 2006, a professor from Rutgers University wrote a letter to the Editor that The New York Times published. It explained how search data supports academic research that addresses issues commercial entities cannot. It also will support the closure of thousands of public libraries that will no longer offer paper books, but rather digital books with embedded digital rights management software.
A couple of scenarios could transpire. Public libraries could turn into profit centers, where a two-dollar charge allows consumers to check out a book for a week and disappears from the person's computer or e-reader when it's time to check it in. The other option would create one searchable online government public library divided by categories that allows anyone to access books from around the world or across the country for a small fee. Those opposed to Darwinism might not appreciate the idea of having the content available for anyone to read.
The online-only library reduces government funds for physical structures and employees, but also eliminates the ability for anyone to walk off the street, sit down, and browse books and periodicals for free and without a library card. Parts of the Newport Beach Public Library system closed and went digital. It requires people to register and sign into the site.