With GoTo’s New Search Service, Visitors To Small Sites Aren’t Going Anywhere

Upstart search engine GoTo.com – inventor of the idea to charge advertisers for top search results listings – took steps this month to get more small Web destinations to install its engine on their pages. The company’s logic is simple: The more sites hosting GoTo.com searches, the more money GoTo.com makes.

Small Web sites now can add search capability automatically through the company’s main page at www.goto.com. The move follows a similar product called Search-in-a-Box that GoTo.com, Pasadena, CA, began earlier this year. But Search-in-a-Box didn’t make sense for Net locales that wanted to retain their traffic because it shifted visitors to GoTo.com’s site.

The newer product, called Integrated Search, lets host sites hold onto their traffic. GoTo.com is pitching to hosts that put a premium on visitor loyalty. The company previously had set up only a few larger sites with capability similar to Integrated Search, and the program had to be implemented manually, said GoTo.com CEO Jeffrey Brewer.

“There’s a big problem with online advertising today,” Brewer said. “It’s historically been hugely concentrated at the portal sites.” Brewer cited estimates indicating that more than 70 percent of ad dollars spent on the Net go to the top 10 portal sites, though 85 percent of ad impressions take place elsewhere.

“They only capture 15 percent of the impressions that consumers view on the Internet. So there’s a huge discontinuity there,” he said.

To help it with Integrated Search, GoTo.com hooked up with ad network 24/7 Media Inc., New York, which will give host sites the option of selling banner advertising on search result pages.

As a hypothetical example, a dog-loving Web surfer perusing a page about German Shepherds might carry out a search on kennels using a GoTo.com-sponsored engine, and receive a list of hits prioritized by which sites paid GoTo.com the most for the keyword “kennel.” Additionally, the canine enthusiast might be served up with a banner from 24/7 touting a pet products e-commerce site.

No money changes hands between GoTo.com and 24/7. The latter will promote the program to its affiliate sites. GoTo.com will make its money on the search click-throughs, while 24/7 will take home a commission on selling keyword-targeted ad banners to advertisers.

Since GoTo.com is more interested in selling the search listing to Web destinations that have paid for the most visible spots, affiliate Web sites will keep the majority of the revenue generated by the banner ads. Brewer added that GoTo.com arranged a “more favorable” than normal commission structure with 24/7.

The pact marks an expansion of the two companies’ work together; 24/7 signed GoTo.com to its Search/Directory ad channel in March.

For its part, 24/7 touts the targeted nature of the program to its advertiser clients, said Scott Paternoster, the company’s director of national sales. He sees other advantages over advertising with the bigger portal sites as well.

GoTo.com’s Brewer said the company also approached ad network DoubleClick Inc., New York, about partnering in the deal, but found 24/7 more receptive to the idea.

“[24/7] understood the value that we were creating and they understood the opportunity for them in terms of expanding the inventory of the most targeted banners sold: Keyword-targeted searches. They get direct marketing,” he said.

GoTo.com, Pasadena, CA, pioneered the concept of charging for search listings more than a year ago, and the company recently declined an invitation from Alta Vista Co., Houston, to help the larger portal set up its own pay-for-listing program.

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