• by Mark Naples , March 5, 2004

You've all read the news by now - announced Tuesday. Yahoo! added paid inclusion to its Search results. The announcement was an interesting one, leading with about 500 words dedicated to new relationships with National Public Radio (NPR), The New York Public Library, The National Science Digital Library, and the Library of Congress - each of which should enhance the content that users find in their research-oriented searches, and none of which is paid, of course.

Yahoo! is calling this new Content Acquisition Program, Public Site Match. The part that garnered all the coverage, however, is the commercial component of Public Site Match, which is cleverly being called Site Match. Site Match allows commercial content providers to submit Web content, update it frequently, obtain additional targeted leads, and track and optimize their performance. It's a paid inclusion program, and some critics are worried that the mixing of these results with natural results, as Yahoo! has stated it will do, will confuse consumers.

The US Federal Trade Commission (FTC) has already spoken clearly against this practice, with correspondence and public postings being made as long ago as mid 2002. Commercial Alert, a division of Consumers Union, has been watching the evolution of Search and sort of acting as gadfly to set up FTC responses when certain practices are seen to violate Section 5 of the Federal Trade Commission Act.

The long and short of Consumer Alert's complaints are that when search engines include Websites in search results lists, on the basis of "paid placement" and "paid inclusion," such search results are advertisements. The original complaint is referred to frequently. It states, "without clear and conspicuous disclosure that the ads are ads," such "concealment may mislead search engine users to believe that search results are based on relevancy alone, not marketing ploys."

There are a great many Yahoo! business practices that I have not understood, like why ads served to its 100 million or so localized and personalized Yahoo! homepages are not more localized or personalized. But, that's a small one compared to this, especially on the heels of having just launched its own Search technology less than a month ago.

Yahoo! knows as well as anyone that there is concern by consumer advocates and the FTC about the co-mingling of results. It's probably the most consumer-focused of all the portals on the Web, so they know how important it is to disclose, in its search results or in an easy-to-find page on its site that it is being paid to list certain sites more prominently. After all, as many as 80% of all Web users, depending on whose research you believe, think it is important for Search engines to disclose such things.

Okay, so why would Yahoo! start this program now? With Ask Jeeves having just purchased privately held Interactive Search Holdings properties -- which include My Way, My WebSearch, iWon, Excite and MaxOnline, for $343 million (including $150M in cash), there clearly is very little regard these days for consumer experience and more for quantitative proof that these consumers are seeing paid advertisers' messages. Yahoo! seems to be accelerating toward monetization of whichever Search-related assets it has. So, I think we can all expect more to come from Sunnyvale.

It's hard to blame them. As I commented last week, what observers seem to care most about in media these days is how markets respond short term. When's the last time you heard of a company making an acquisition like the one Jeeves made, and having its stock jump more than 40%? Yahoo! is only up a couple of points since its announcement. But, it is up. Who cares what the Feds and consumers think? If more advertisers find more prospects on Yahoo!'s pages, it's all good. For now.

If I seem dubious, it's with reason. Google garnered its market share before it began to monetize its eyeballs. If Yahoo! isn't careful, it runs the risk of making Google's Search results seem better still. Or, at least it runs the risk of giving Google's brand a boost by giving it another value proposition to users. After all, at the end of the day, Search is media. Even consumers are learning that. And they have a choice.