February 15, 2006

Making Search Sticky

By Evan Schuman, Ziff Davis Internet

Opinion: Yahoo isn't the first search engine to try to bribe visitors to be loyal. What would make a user loyal when all of the options are free?

In what Yahoo is carefully characterizing as mere research, the portal is asking some of its users whether they would be willing to perform all—or at least most—of their searches on Yahoo in exchange for discounted music downloads, frequent flier miles, video rental discounts and even charity donations.

One of the Web's first search engines, Yahoo has taken a distant number two position behind Google in search market share, while MSN is a distant third.

The marketing problem is substantial. First, all of the major search engines are completely free to users. Secondly—and this is possibly the most frustrating element for Yahoo—the search engine results are seen as equivalent, if not identical.

Whether the results from one engine or another are more accurate or more comprehensive is irrelevant, as most consumers and businesspeople perceive them to be identical. As the old saying goes, "If ten Boolean search parameters say you're sick, lie down."

Personally, until about a year ago, I was finding Google's results to be consistently and demonstrably superior to any other engine, including Yahoo's. But as Google has focused its efforts in 100 different areas lately, I've seen its results fall into line with Yahoo and others.

Also, Google seems to be doing strange things adding and removing sources. I'll be researching a story and will run the identical search on Google at different times on the same day and will see a significantly different number of responses.

How different? A week ago, the same search yielded 208,000 one day and 102,000 results the next. A day later, an identical search returned 42,000 results.

What's going on? Is Google deleting sources that frequently? I can understand the numbers increasing as new sources are made available, but why such a rapid decrease? Google seems to be forgetting as quickly as a White House staffer testifying to Congress.

Getting back to Yahoo's dilemma, bribing users to search only on one engine is not going to be a sustainable long-term strategy.

First, thin margins today force the bribes to be pretty lightweight. What is Yahoo proposing?

Elimination of Yahoo ads. Nice idea, but most customers have gotten quite adept at ignoring those ads, so I'm not so sure the removal of them will be such a lure. Also, if ad revenue becomes substantial, will Yahoo stand by this offer if tons of people take them up on it? It seems to be one of those offers that only works if it's not especially successful.

Removal of ads would be more of a lure for, say, CNN.com or ABC News, where users have to sit through commercials before they watch a news report. Then again, those two sites used to offer commercial-free viewing in exchange for a fee and that didn't work too well for them, either.

Unlimited Yahoo Mail storage. This is better, but storage is so cheap today that, again, this may not be much of a lure. And, like ad removal, it seems like it won't be sustainable if it's wildly popular.

Outlook access to Yahoo Mail. Sorry, no dice. That should—and, in my opinion, will—be offered to all Yahoo users soon enough. No true incentive there.

Five free music downloads from Yahoo Music. C'mon, guys. A handful of free downloads from your own music service? You'd offer that to anyone as a marketing come-on. No impressive incentive there. Yahoo is also offering a discounted subscription to its music service. Same argument.

Donations to charity. This has the most potential, but read Yahoo's fine print: "Yahoo will give a percentage of the revenues generated from your searches to a nonprofit organization of your choice."

Let's set aside for the moment that the percentage being donated is not specified. The greater concern is "revenues generated from your searches." Direct? Indirect? It can't be ad revenue because they're already saying it will include no ads. There's no subscription revenue because it's all free. So what revenue are they referencing? How will it be measured? How will the user know? Won't it likely be so infinitesimal as to be irrelevant?

A $5 PC-to-phone calling credit per month. This is a come-on to use Yahoo Messenger with Voice. If they gave users unlimited usage for a year, that would be an incentive (maybe). But $5 a month? That's not even an especially aggressive marketing come-on, let alone a usage incentive.

Netflix discount. They are considering a free first month and then a $7 monthly discount. No great lure there, unless the customer was going to be using Netflix anyway.

Discounted Yahoo Personals subscription. Free first month if you agree to pay $20 per month thereafter. Hardly much of an incentive to ditch Google.

250 Frequent Flyer miles each month. OK, this has some good potential. The number is a bit thin, but at least it's not a promo for some Yahoo service. Make this 2,500 miles a month and Yahoo may be onto something.

Even with a solid miles program or the always-attractive cash payment (which Yahoo has not mentioned), the practical reality is that search has taken on a huge importance today.

If people believe that Google will deliver the best answer more quickly, they'll use Google and they'll leave the $2.89 in incentives on the table.

But if people believe that all engines are essentially the same—which they pretty much do today—and Yahoo makes these incentives real and substantial, they may just prove that while money can't buy love, it may indeed be able to buy a healthy heaping of search loyalty.