Amazon Fires a Search Salvo at Google, Yahoo and Microsoft (AMZN, GOOG, MSFT, YHOO)

by: The Stalwart

The Stalwart submits: Just when Google was starting to enjoy hegemony, a tiny client-state has to muck things up.

The news in the search field is that Amazon (NASD: AMZN) will be opening up the guts of their Alexa search engine to outside users. Here's John Battelle to explain it:

Every so often an idea comes along that has the potential to change the game. When it does, you find yourself saying - "Sheesh, of course that was going to happen. Why didn't I predict it?" Well, I didn't predict this happening, but here it is, happening anyway.

In short, Alexa, an Amazon-owned search company started by Bruce Gilliat and Brewster Kahle (and the spider that fuels the Internet Archive), is going to offer its index up to anyone who wants it. Alexa has about 5 billion documents in its index - about 100 terabytes of data. It's best known for its toolbar-based traffic and site stats, which are much debated and, regardless, much used across the web.

OK, step back, and think about that. Anyone can use Alexa's index, to build anything. But wait, there's more. Much more.

Anyone can also use Alexa's servers and processing power to mine its index to discover things - perhaps, to outsource the crawl needed to create a vertical search engine, for example. Or maybe to build new kinds of search engines entirely, or ...well, whatever creative folks can dream up. And then, anyone can run that new service on Alexa's (er...Amazon's) platform, should they wish.

It's all done via web services. It's all integrated with Amazon's fabled web services platform. And there's no licensing fees. Just "consumption fees" which, at my first glance, seem pretty reasonable. ("Consumption" meaning consuming processor cycles, or storage, or bandwidth).

The fees? One dollar per CPU hour consumed. $1 per gig of storage used. $1 per 50 gigs of data processed. $1 per gig of data uploaded (if you are putting your new service up on their platform).

In other words, Alexa and Amazon are turning the index inside out, and offering it as a web service that anyone can mashup to their hearts content. Entrepreneurs can use Alexa's crawl, Alexa's processors, Alexa's server farm....the whole nine yards.

While Battelle's enthusiasm may be a little much, it's not hard to see this as being somewhat significant. If developers take to the Alexa service, I'd be shocked if other search also-rans like Ask and MSN don't follow suit. MSN, in particular, seems more interested in harming Google than in actually improving their own business. While Google could, in theory, follow suit, should the model becomes popular, this could be disruptive to their adwords-based revenue model. Under this model, the revenue comes from the developers fees, who can then publish their data anywhere/way they see fit (running their own ads against it, if they see fit).

Of course, this will likely be down the road, should it come to pass, but it does show that the search game isn't necessarily over, and that investors in Google, who operate under very optimistic visions may need to rethink. We've seen time and again, in many industries, that the story is rarely over when people think it is.

Update: In thinking about this more, it's incredible how much more daring and interesting this idea is than Microsoft's latest grumblings, that they will pay users to search via MSN. Quite a contrast. One thing brilliant about Google's model is that, because they sell their inventory in an auction, they're impossible to undercut. The buyers set the price, and there's very little that Google or any competitor can do about it. I'm surprised the Senate hasn't held an investigation.


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