Search developments in brief

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Includes: AABA, GOOG, SHOP-OLD
by: David Jackson

  • JupiterResearch predicts that the paid search market will evolve into four distinct verticals -  retail, financial services, travel, and media & entertainment - with search services increasingly focusing on single verticals. Similar to the fifth of Five Internet danger signs to watch for in 2005: Category-specific search starts to become truly effective. If correct, this prediction is postive for the pure-play comparison shopping and travel search sites.
  • Yahoo! has opened its pay-per-click (NYSE:PPC) ad APIs and rebranded Overture as Yahoo Search Marketing Solutions. This helps medium-sized companies buy pay-per-click ads on Yahoo search and for placement with its content partners, but it isn't the entry of Yahoo into the small-web site contextual advertising business that the market is yearning for. InternetNews outlines the issues, but there's some confusion between the contextual advertising (content) and search markets.
  • One of Microsoft's key Windows architects, Marc Lucovsky, has defected to Google, according to David Winer. Lucovsky was a "Distinguished Engineer" at Microsoft, and was responsible for the Windows NT executive, kernal, Win32 run-time elements and then was chief software architect for .Net My Services. To state the obvious: competition for employees between Google and Microsoft proves that, yes, the two companies firms really do compete, despite the fact that investors in Google have not factored this into Google's stock.
  • Click fraud is becoming a serious enough problem that "a cottage industry of tools to detect click fraud" is emerging, according to Danny Sullivan, Editor of Search Engine Watch. eWeek names two companies - Clicklab LLC and Net Applications - that are "providing services such as click auditing to advertisers worried about fraudulent clicks". The PPC ad provers are incentivized to eliminate click fraud in the long run, so these companies are potential acquisition targets.
  • Google has added reviews to its local search service, and integrated Google Maps. You can now read reviews of restaurants and other local businesses. eWeek says that Google's recent inclusion of reviews in Froogle, Google Movies and now Google local search was the result of a project by interns last summer. For investors, the question is: who gains and who loses from Google's integration of third-party reviews? In the analysis of Google Movies, I argued that smaller reviewers gain, and larger (better-known) review sites lose. But I"m not sure...
  • WebSideStory reports that Firefox took another 0.74 percentage points of market share from Internet Explorer between January 14th and February 18th. That suggests that Firefox adoption is decelerating, as the gains for the prior two months were 0.89 percentage points in December and 1.03 in November. Firefox market share is now 5.69%, according to WebSideStory; Janco Associates recently said it was below 4.5%. Is the deceleration for real? It makes sense that early adopters rushed into Firefox, and maybe the wider population of web users will take longer to catch on. But as more web sites abandon proprietary technologies that work only with IE, the biggest barrier to Firefox adoption will be removed. Firefox adoption matters to the search companies.