Google's policies on Arbitrage ruffled a few feathers in Oakland, Calif. after Ask.com CEO Doug Leeds said rumors began spreading across the
Internet that the Q&A site committed arbitrage.
Google's policy describes arbitrage as when advertisers use AdWords to drive traffic to their Web sites at a low cost, and pay for traffic
by earning money from the ads placed on those Web sites. The rules state a Web site may get suspended if it
has excessive advertising or designed for the sole or primary purpose of showing ads.
"Arbitrage means you're trying to get a click and send the user to an app or site with a bunch of
ads," Leeds said. "That's not what we're about."
Leeds told MediaPost that Ask.com offers something a little different than traditional search engine query results. It offers an
information service supported by content and monetized with ads to drive traffic. He believes the explanation on Search Engine Land prompted by a SEL reader jumps to conclusions because of the recent change in
the company's content business model.
Ironically, Google's mantra has been for marketers to create ads that answer customers' questions in queries.
Google declined to comment on the
situation. "In general, we don't comment on specific advertisers or ads," said a Google spokesperson. "We're constantly reviewing and updating our policies, and search partners are subject to these
policies."
Leeds said alienating users with a short-term arbitrage play is not what the company is about, adding that the company has been working with Google to ensure compliance.
The
strategy is working. Leeds said daily queries rose Oct. 24 by 25% year-to-date, because site visitors get answers to the questions they seek, so they come back. Mobile query growth rose 45% in Q3 2012
compared with the year-ago quarter. And the company has seen 69% year-to-date page-view growth in Ask's Q&A community.
In September, Ask.com held 3.5% of search market share -- up from
3.2% sequentially, according to comScore.
Piper Jaffray Analyst Gene Munster said the search business at InteractiveCorp "could demonstrate a clearer growth opportunity in mobile, particularly
in search." Based on certain acquisitions and improvements in the company's strategy, Munster estimates 11% growth in the company's search business in 2014.
Growth continues from investments
in acquisitions, such as About.com, as well as branding campaigns. Next week, Ask will launch two new spots as part of its national cinema campaign with National CineMedia, which began in July 2012
across 40,000 screens nationally.
The branding campaign illustrates Ask's investment in marketing, which contradicts the definition of
an arbitrage business. Arbitragers don’t spend money in offline brand awareness.