Distribution is a growing segment of the search industry, but some say it's been a largely invisible trend to date because traffic measurement firms limit their scope to dedicated search sites and
portals, and miss some of the search activity happening elsewhere on the Internet.
Search technology and sponsored listings firm InfoSpace estimates that of the Web searches conducted today,
approximately 25 percent of queries are conducted outside of dedicated search sites. That's a big chunk of the $2.3 billion search market, as valued by Piper Jaffray, and that percentage is
growing.
Aside from high-profile distribution deals like the partnership between AOL and Google, vertical category search partnerships have proven lucrative for smaller search technology
firms like InfoSpace properties WebCrawler and Dogpile. The trend toward search tech distribution is underscored by recent announcements between InfoSpace and FoxNews.com, ABCNews.com and
Cablevision, and Yahoo's recent agreement to power CNN.com's search engine.
"There is a very clear trend among high-traffic Internet sites looking to provide search functionality," says Brian
McManus, executive VP, Search and Directories, InfoSpace, Inc. These days, he says, nearly every content site has a searchable archive/database. McManus says that high-traffic sites are
beginning to realize the revenue potential in providing search functionality on their sites, and the opportunity is there for smaller search players to come in and provide content owners with
sponsored listings programs.
"Distribution is a big part of our DNA," notes McManus. He says that more than half of InfoSpace's Search & Directory revenues are now from distribution rather
than from the company's owned and operated search sites (Dogpile, MetaCrawler, WebCrawler). Now a primary strategy for the company, partners add InfoSpace's private label search capabilities to
retain Web traffic and earn revenues from visitors who click on paid listings. McManus adds that InfoSpace typically doesn't brand itself on sites where it provides search technology.
InfoSpace has distribution deals in the search technology, sponsored links, and interactive Yellow Pages listings paid search categories. McManus says that their distribution traffic is spread
across ISPs, vertical category sites, and client applications such as WhenU's SaveNow. The company's clients include Fox News, ABC News, Verizon Online, Cablevision, and WhenU.
McManus says
that measurement firms like comScore MediaMetrix and Nielsen//NetRatings do not yet measure distribution deals in assessing search market share, so the traffic data for each search property can be
a little misleading. Spokespeople from both comScore and NetRatings confirmed that both companies measure traffic by Web site and not by distribution deals--with the exception of major deals
like the partnerships between AOL and Google, and MSN and Yahoo.
James Lamberti, VP of comScore marketing solutions, says that comScore qSearch, for example, only assesses the top 25 search
locations, which means that the smaller search engines appearing in marketing rings around the Web are discounted--as are Amazon.com's new search engine and InfoSpace's search properties--simply
because they don't generate the traffic. However, he concedes that if distribution were counted as belonging to the search provider and not the content provider, traffic figures would be higher
for companies like InfoSearch. Lamberti says that comScore is currently working on a way to integrate distribution deals into calculating market share.
Lamberti says that distribution
partnerships between vertical and niche content sites are where the potential for growth is. He says that full inventories and fierce competition at larger search sites present the biggest
impediment to search growth, and advertisers will certainly be looking to buy keywords from high-traffic content sites.
"Search will be a way to do everything on the Web," Lamberti says. "The
opportunity doesn't stop at Google, Yahoo, and AOL. Lots of midsize players (are starting) to take advantage of that; they're out there building their networks," he says.
InfoSpace's McManus
is wide-eyed about the opportunity: "There is no question there will be continued growth in the (search distribution) marketplace. Search is a utility every site wants. It's also the most
lucrative form of advertising on the Internet, and I don't see that changing."