In a deal that potentially intensifies an already heated competition among search engine companies, Barry Diller's IAC/InterActiveCorp. announced yesterday that it agreed to purchase search company Ask Jeeves for $1.85 billion in stock. Ask Jeeves will join a roster of other businesses now under the IAC umbrella, including online travel agency Expedia, Web dating site Match.com, and retail channel Home Shopping Network. The move--which could give Ask Jeeves the financial backing to compete with the largest search players--comes on the heels of MSN's official entry into search last month; MSN kicked off the launch with an extensive ad campaign designed to reach 90 percent of U.S. households 40 times in the next eight weeks. MSN last week announced that it was poised to start testing its own program for delivering sponsored search listings--which ultimately will compete with both Google and Yahoo!'s Overture, MSN's current paid listings provider. Ask Jeeves is currently considered a second-tier search engine, behind market leaders Google, Yahoo! Search, MSN Search, and AOL Search, according to research firms Nielsen//NetRatings, comScore, and Hitwise. The companies give varying estimates of Ask Jeeves' market share, but all put it at less than 10 percent. But IAC's reach--the company's sites drew 44 million unique visitors in January, according to comScore--potentially gives Ask Jeeves a big boost with consumers. IAC intends to add the Ask Jeeves search box to its vertical sites, such as its online dating site Match.com, retailer Home Shopping Network, and ticketer Ticketmaster, and might also set up a distribution deal with Expedia. Those changes alone will increase Ask Jeeves' exposure, said Scott Garell, executive vice president-general manager of search properties at Ask Jeeves. "They can absolutely help us build our brand if they put our search box on sites," said Garell. "We definitely see a lot of synergies here." Barry Diller, chairman and CEO of IAC, said in a written statement: "We believe that in the future [Ask Jeeves] has the potential to become one of the great brands on the Internet and beyond, and by beyond we mean in wireless, in the search for anything on any device." Additionally, IAC has the deep pockets to fund advertising--such as the series of spots created by TBWA/Chiat/Day, San Francisco, that Ask Jeeves launched last month. "With their resources, we'll be able to invest in building our brand," said Garell. He declined to state whether the company planned additional campaigns. Still, whether the added visibility will be enough to propel Ask Jeeves into the top tier of search players remains an open question. Conventional wisdom, said Jupiter Research analyst Gary Stein, is that the major companies are too popular with consumers for Ask Jeeves to make significant inroads. But the field is evolving so rapidly that Ask Jeeves--which also owns Excite, iWon, and My Way--might yet emerge as a force to be reckoned with. "The search game has changed twice now in the space of five days," Stein said, referring to MSN's announcement that it was entering paid search. "We'll see what happens tomorrow." Some industry observers say that consumers have little loyalty to particular search engines. comScore reports that 65 percent of users use at least two search engines per month. Synergies With Verticals IAC also can now make use of Ask Jeeves through ads on its search results pages. For example, as of Monday, when users went to AskJeeves.com and typed the term "online dating" into the search box, they were served an ad for Yahoo! personals at the top of the results page. But in the future, IAC might arrange for its online dating site, Match.com, to appear in that spot. Garell declined to say whether such deals were in the works, other than to comment: "We're going to have to investigate the synergies over time." In September, Ask Jeeves beefed up its site with new personalization capabilities that allow users to save their queries, and last month, the company announced the acquisition of blog search engine Bloglines. For now, Ask Jeeves relies on Google for sponsored search results, but with IAC backing, might invest in own sponsored search engine. Google accounted for approximately 70 percent of Ask Jeeves' revenue last year. Ask Jeeves also can use IAC funding to invest in new research and development--possibly creating new meta search sites, said Forrester Research analyst Charlene Li. She predicted that Ask Jeeves would "focus on developing areas of expertise in verticals." Some observers also see Ask Jeeves as well-positioned to expand its local search offerings. Last year, Ask Jeeves made a deal with IAC's Citysearch.com, which involves returning Citysearch's local content and information to Ask Jeeves search results pages. Analyst Chuck Richard, vice president at Outsell, said that IAC's purchase price for Ask Jeeves--seven times the revenue and 33 times the operating income--is in the same range on revenue multiple as the price Dow Jones paid for MarketWatch. The acquisition is expected to close later this year.
When the next generation of Microsoft's Xbox video game console is released later this year, it will include an online marketplace where developers can sell virtual items and services for real cash, developers announced at the annual Game Developer's Conference in San Francisco early this month. But the online selling of purely virtual items for hard, real-world cash actually has been going on for years, with players of "massively multiplayer online role-playing games," or MMPORGs, selling virtual objects--including fictional possessions, "characters," and game currency--for U.S. dollars. MMPORGs are online games in which players assume the role of a character in a fantasy or science fiction world, and interact with hundreds or thousands of other players, banding together to hunt for treasure, explore simulated worlds, and slay monsters. Examples of MMPORGs include the enormously popular "EverQuest" and its sequel, "EverQuest II," and a game based on George Lucas' "Star Wars" universe called "Star Wars: Galaxies." The so-called "secondary market" for game items began on Internet auction site eBay, where players of "EverQuest," produced by Sony, bought and sold rare gear--such as a virtual suit of armor--in-game cash ("platinum pieces"), and entire in-game personas--a powerful wizard or an experienced warrior, for example. Such sales were made for hundreds--and in some cases, thousands--of dollars, said industry observers. While developers have attempted to stop such markets, the markets have proven remarkably resilient. In 2001, "EverQuest" developers asked eBay to stop hosting these auctions, and announced that selling in-game property for real-world cash was a violation of the game's end-user license agreement. eBay stopped allowing these auctions, but the market for in-game property persisted. In fact, the selling of characters and items in these MMPORGs has even grown on specialized sites such as PlayerAuctions.com and MySuperSales.com. More recently, Blizzard last week tried again to stop the practice by banning more than 1,000 accounts from its game, "World of Warcraft." The banned players had engaged in "gold farming," which involves harvesting "gold" in virtual mines, and selling it online for cash--much like collecting Monopoly money and selling it for U.S. currency. IGE offers "World of Warcraft" gold on its market, charging $108.99 for 500 pieces of online gold; the company offers to purchase the same amount of gold from players for $25. Cindy Bowens, a community manager with Sigil Games, which is developing the anticipated game "Vanguard: Saga of Heroes," said the secondary market for items and accounts poses difficulties. "If you can go out and buy this item or this level for cash when I've spent my time and effort and skill to earn it, it somewhat cheapens the experience," Bowens said. "I deal with players by the hundreds every day, and what I hear is that they don't want these sales allowed in their games." Bowens said that she's seen entire areas of online games dominated by so-called "farmers," who are hunting for rare items or money to sell online. "To me that's a huge problem," she said, adding that "our paying customers are leaving these games because their play is being impeded by someone trying to make money." "When it's interfering with the gameplay of our customers, we feel that's something we really have to take a look at," Bowens said. What's more, Bowens said, companies that deal in the sale of online items are cashing in on the work put in by the developers of these games without investing anything in the games' creations. "It just seems incredibly unfair to me that an entire organization can come along and cash in and make money on that--without any investment or risk they can make a profit out of what these people are doing," Bowens said. "I have a problem with that." Bowens declined to comment, however, on any action that Sigil would be taking to curb these secondary markets, either in the game development or in court. Representatives for IGE did not return phone calls and e-mails for comment. Chris French, who runs the MMPORG information site "the Caster's Realm," www.CRgaming.com, said some players spend all their in-game time "farming" items to be sold on auction or online market sites. And, he said, there's a substantial amount of money to be made. "I know someone who bought a new car off of stuff they got in the game," said French. So much money, in fact, that there are companies dedicated entirely to the online selling of MMPORG characters, items, and money. One such site, www.IGE.com, has stores for the major 15 MMPORGs, and sells characters, items, and online currency. IGE also owns MyPlayerAuctions, www.playerauctions.com, which hosts online auctions for players looking to sell their money, gear, and characters. Some players and developers do not appreciate the existence of this secondary market, however, because sites like IGE make it possible for some players to get powerful characters and rare items without putting in the time and energy that others do. "They've largely been credited with destroying the market economy that was originally in 'EverQuest,'" said French. "My personal opinion is that it's very bad for the game."
One out of four college students surveyed online reported receiving ads on their mobile phones, according to a Ball State University study of 1,171 students conducted last month. Of the students to receive wireless spam, nine out of 10 said they were annoyed by the unsolicited text message advertisements or instant message ads sent to their cell phones, What's more, 68 percent of respondents who received wireless spam said they were less likely to purchase a product from businesses responsible for serving the unwanted ads. Fortunately for the advertisers responsible, only 5 percent of students receiving such spam could even recall the name of the business or product in question. But, of the students who received unsolicited ads, 1 percent said they responded. In October 2004, Federal Communications Commission rules went into effect that strictly limited the messages that marketers could send to consumers' mobile phones and PDAs. Before messages can be sent to wireless devices, consumers must opt-in--and they can't be sent unsolicited text messages asking them to opt-in. But the survey results indicate that at least some marketers are ignoring that rule. Some mobile advertisers indicated they were concerned by the report's findings about the prevalence of unsolicited marketing. Tom Burgess, CEO and founder of Third Screen Media, a mobile media-buying firm, said: "Spammers or spimmers can only hinder the industry, so we and the service carriers will have to work that much harder to protect consumers and our interests." Some in the industry believe "spim," or advertisements sent by instant message, has not flooded users in the United States because consumers in the country have been slow to adopt the practice. "Everyone outside the U.S. is thumbing," said Royal Farros, CEO of online marketing firm MessageCast, Inc. "It's getting a lot of press here, but Americans have really been slow compared to Europe and Asia--where, not by coincidence, spim is a huge problem." Michael Hanley, the report's author and an assistant professor in the journalism department at Ball State, said he has watched ads served to mobile devices grow along with the popularity of text messaging, and now instant messaging. "Even though it's illegal to send unsolicited ads to cell phones, and these results show how much consumers hate them to begin with, I'm confident the number of ads will continue to grow as text messaging and instant messaging becomes more popular," Hanley said. Of the sites that students were initially unfamiliar with, 92 percent of the products that students remembered being offered were from pornographic Web sites. And of the 8 percent of respondents who received ads from familiar businesses, about half remembered exactly what businesses they were for. The brands that students could recall were either their carriers--AT&T Wireless, Cingular, Verizon--or ads from Blockbuster, ring tone provider Jamster, and familiar porn sites. The Ball State study also found that 68 percent of college students send text messages using the mobile phone, and about 14 percent instant message on their cells.
Yahoo! has agreed to acquire online photo-sharing service Flickr, Stewart Butterfield, president of Ludicorp Research & Development, confirmed yesterday. Ludicorp launched Flickr in beta a year ago. Flickr's management team will remain in place, and will continue to pursue the release of a full version 1.0 of the service, Butterfield said. Butterfield would not discuss terms of the deal, which was widely rumored over the Web and the blogosphere for the last two weeks. Flickr allows users to upload digital photos and assemble them into albums, which can be posted on blogs and shared with other like-minded netizons. The service has gained widespread appeal among experienced Internet users for its community-based approach to organizing and sharing digital images on the Web. The news comes just one week after Yahoo! unveiled its plans to launch a combined social networking and blogging service called Yahoo! 360, which allows users to incorporate a list of personal content, including digital photos, into their blogs. The service will be available at the end of March--by invitation only at first.
A standardized RFP process will increase the efficiency of the online buying/selling process. As we all know the growth of any industry is based partially on the efficiencies of the sales process. Many industries have moved to the Internet for their entire sales process. Last week I was sitting at my desk typing as fast as I could to complete a proposal for a leading movie studio. I noticed that I was actually sweating as I typed due to the fact that other requests for proposals (RFPs) were coming in and I was counseling my staff on still more RFPs. Our sales assistants have become experts on inputting Atlas and Mediavisor (as much as anyone can be) and somewhat expert on the myriad forms that we receive from 30 or so different agencies or advertisers. Oh. I forgot. Each RFP asked for big ideas and the high demand (i.e. short supply) inventory and we have 48 hours to provide it or we "will not be considered for this buy" Don't get me wrong. We love getting RFPs since we would be out of business if we did not. However with the current state of the industry, we must recreate the Mona Lisa for every one. If we could create industry standards (like we have for ad units) it would help publishers to provide top-flight programs for our agency partners. The additional time could be used to create innovative programs on publisher sites. I use the word "partners," as we need to continue to streamline the way we do things in order to avoid another mini-implosion like what happened in 2000. Of course, we do not want to stifle the creativity of agencies and advertisers, and of course I think there should be areas for beyond the banner creative executions. However, we all need to admit that the RFP process with varying "standard" database programs, like those mentioned earlier, and the speed in which new ad technologies are entering the market, all point to the need for a step towards standard RFP practices. Six or seven years ago, agencies needed to create 15 to 20 different ad units for each plan. The IAB's standard ad units help to squash that process and the increased efficiency significantly increased the growth rate of the industry. Leonardo da Vinci did a great job on the Mona Lisa ? let's not try to create a digital version of it.
A standardized RFP process will increase the efficiency of the online buying/selling process. As we all know the growth of any industry is based partially on the efficiencies of the sales process. Many industries have moved to the Internet for their entire sales process. Products like Media Visor and Atlas can make it easier for agencies to standardize and distribute RFP's. However, they currently lack flexibility and can be cumbersome for some media planners. Even so, as the demand for proposals increases, the argument for some extent of standardization becomes more valid. Standardized or not, the more specific the RFP, the less round pegs come back to fit into our square holes. Although many questions will be present on all RFPs, the extent that specific information is required varies by campaign, by agency, and by planner, based on the objectives and sophistication levels of each. Savvy planners ask more sophisticated questions that require clear and technically involved responses. Publishers and even some media planners sometimes may not realize the financial ramifications of incomplete information, particularly when rich media, attitudinal studies, or other technology is involved. And, yes, media planners do appreciate the time you put into preparing proposals! It is evident that certain publishers have spent more time learning what planners need as opposed to focusing on the bells and whistles. Planners should try to give publishers the time necessary to present their best ideas, however the reality is that sometimes plans must be turned around quickly. This is yet another reason why RFPs must lay out all the specific information required upfront, it is the first step to smooth logistics and trouble-free campaigns. Many publishers who receive RFPs may not make the final media plans, but if you are receiving them regularly you are in the consideration set and should be proud. Keep answering those RFPs. Even da Vinci had some ideas that didn't fly.