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Internet searching creates new market

Monday, Nov 15, 2004, Page 11

Pam Thompson, vice-president of international operations at Overture Services Inc. PHOTO: GEORGE TSORNG, TAIPEI TIMES

Taipei Times: What business opportunities do you see in online searching?

Pam Thompson: Analysts suggested that by the year 2008, there will globally be roughly 11 billion Internet users, and searching among Internet users is also growing at great speed. We see people are becoming more sophisticated on how they use search. They started by searching the URL and a single word, but now they are a lot more descriptive, which suggests how well the searching tool works, and how the tool is becoming more relevant to them. As they continue to use it, growth opportunities in the search industry rise.

What we are seeing is that people use the Internet and searching as ways of research to make purchasing decisions, in particular more complicated purchasing decisions like choosing a digital camera. They'll search online as well as going to stores. It's becoming an integrated process between online research, online purchasing, in-store research and in-store purchasing. Therefore, we feel there are a lot of opportunities for us to create value for advertisers by allowing them to have more targeted messages, and for subscribers to get access to relevant information to make purchasing decisions.

TT: Marketing via search is a relatively new concept to the Taiwan market. Can you explain how it works?

[Editor's note: Sean Wu (伍臻祥), general manager of Overture Taiwan, who joined the interview, answered this question on behalf of Thompson.]

Sean Wu: If one company becomes our customer, it gets to choose what key words they want to bid on, for example, PC and printer. So when end users or subscribers type in these key words in the search box, the company's specific search listing will show up at the top of the results list. Our customers only need to pay us when subscribers actually click on the links and go to their Web sites. If two companies both choose the same term, whoever pays more gets the first position in the results. It is up to customers to decide what costs they are willing to pay for this particular sales prospect.

A special feature is that this marketing tool is not just for big enterprises, but also small and medium-sized companies, because they only need to pay a few dollars to direct customers to their Web sites.

TT: In your experience in the US, how do your customers like the results they get with this marketing tool?

Thompson: I think they like our service very much. Advertisers in the US all have a certain percentage of their marketing budget that goes toward online spending. We are excited to see that online spending is growing. In addition, the percentage of online spend leans more and more toward the search tool. The trend is occurring in other markets as well. So it's a question of maturity. Customers have to use it to see and appreciate the power it has. Gradually, our customers have been seeing increasing click-through rates and purchases. It's not hard to convince advertisers to use our tool because they need such a small amount of money to get started, not a huge ad campaign. It's a very simple and low-cost way to see how it works.

TT: Will the service provided by Overture reduce the accuracy of search results? If it does change the results, how do you balance customer interests and user satisfaction?

Thompson: The listing page that pops up will show whether the listings are sponsored listings or "pure" listings. This is a dynamic marketplace, so users can either submit the search subject again or go to the relevant pages. It depends on their preferences and the nature of their searches. Our job is to work with advertisers to make sure that we really understand and help them to develop listings that are truly relevant to the search.

Wu: We saw some research on whether Internet users are concerned about paid results and how the paid pages affect their search experience. Studies found that the only thing users really care about is relevancy. As long as the information is relevant to what they are looking for, they are OK with paid results.

TT: In Taiwan, your partners include Internet portals Yahoo-Kimo, MSN, Seednet and Openfind, and news Web sites for the `United Daily News' and `China Times.' How are you going to utilize the two news sites, since most people log onto the sites for news instead of product information?

Thompson: Currently, we use a precision match, and will introduce another product called content manage in the next stage. For example, if an article on a news site is about digital cameras, we will put a small box in the corner that has a couple of relevant listings of that article. Typically, advertising and promotions try to hit people multiple times from a number of different angles to really stimulate buying. In this way we can double-hit the readers.

TT: What is your estimate of the market size for marketing by search in Taiwan?

Thompson: Taiwan is a great market in which to launch Overture, with a significant number of Internet users and a high penetration of broadband users. This is a very technically advanced marketplace for us to market by search. It's still too early to estimate the market size, and we can't disclose our target now. However, with our six partners, we can reach about 80 percent of Internet users here, so we have great business opportunities in Taiwan.

TT: From banner ads to search results, the industry has been looking for new ways to market online. In your experience, what are potential methods or devices to be applied by advertisers following the emergence of 3G mobile phones and wireless communication?

Thompson: This is a great question. I think the answer depends on what part of the world you're in. How people use wireless today varies in different markets. For instance, in a very PC-centric society, people tend to be email-centric and cellphones are merely complementary. Other markets, such as China, is much more driven by voice communication and wireless handsets because they have less penetration of broadband and PCs. In this market, the ability to able to extend the Internet to handsets becomes incredibly important. So we are in a process of investigating the best ways to do that and have a few market trials proceeding around the world. But from this transition we know that having the capacity to network to do interesting things is really the underlined requirement to take full advantage of. In terms of Overture, our desire is to provide our service to either fixed or mobile devices. It's a part of our overall vision.
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