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AltaVista Sorts Out its Customers - Part 1: Business Customers
By Andrew Goodman - September 1, 2000

AltaVista has a lot going on these days. Some would suggest that this might lead to a loss of focus. But this old-guard search engine company has a lot to offer. It's now in the process of figuring out what to offer, and to whom. In this four-part series I suggest that Altavista really has four sets of customers. It now seeks to improve its standing in the eyes of all of these disparate groups. Has it bitten off more than it can chew? In this part, I examine (1) AltaVista's major push into the business infrastructure market and its general efforts to court business-oriented search engine users. Three other groups of customers will be examined in the next three weeks: (2) serious search enthusiasts; (3) the fun bunch; and (4) dialup for dollars, or ISP customers.

Powering site search: AV the infrastructure company

Most Internet pros will still tell you AltaVista offers a great search product. Its index is well filtered and frequently updated, its spider looks at your metadata, and the search process itself is highly customizable.

Site search - the ability for users to search for material on a company web site - has become vital to e-commerce. As a result, literally hundreds of infrastructure companies have appeared, offering to build search tools into corporate and e-commerce web sites. AltaVista makes a strong case that an established company would be wise to stick with an established search engine company when choosing a partner to power its site search.

Altavista Search Engine 3.0 helps businesses deliver the most relevant documents to their users and customers. A recent PC Week lab test found that the AV engine returns more relevant results in the top 5 than its major competitors such as Thunderstone. The product, while not overly expensive, has steep hardware requirements. Therefore it seems most suitable for larger enterprises.

Find it fast on your cell phone

The web site for AltaVista's new wireless search product offers a cool visual representation of how AltaVista Raging Search is being integrated into Nokia wireless phones. Part of the excitement about newly-released Raging Search Unplugged has to do with the fact that AltaVista has compiled the world's largest index of sites written for WML (Wireless Markup Language). Because cell phone users are going to have practical needs, like finding movie times, local businesses, and other usable information, a lot is resting on Raging Search , since the top two or three results are all that can be reasonably displayed on a wireless phone. No one is likely to do a lot of endless scrolling on such devices. The steady product development efforts that can only be accomplished by a serious search engine company like AltaVista make it a good candidate to move with the changing times in this new wireless arena. Some companies may keep relevant, fresh, and spam-free for a short period, but AltaVista's search, in my experience, continues to improve, especially on the score of the first three results being the most relevant. It has taken a combination of the Looksmart directory, ongoing development of AV's proprietary ranking algorithm (which places some weight on the link popularity analysis which is Google's claim to fame), the use of RealNames (Internet Keywords), and other tweaks and refinements, to keep AV results useful and relevant. Few other engines - and certainly none of the spider infrastructure companies such as Inktomi and AllTheWeb, can claim such a comprehensive approach to ensuring the relevance of the first page of results. (We must, of course, tip our collective hat to Google.)

In other words, because AV works hard to develop its product, it is likely to be able to handle the information needs of serious business users more than flash-in-the pan companies who may be unable to face the challenge of a fast-changing, increasingly complex Internet environment.

At the same time, they face competition from AOL, MSN, and Yahoo!, all of whom want to "own your phone" and follow you everywhere, even into the washroom.

Raging BS

The college-aged founders of Raging Bull had a great idea. Create a stock message board like the ones at Silicon Investor, Yahoo! and Motley Fool, and to encourage a massive number of page views, target the zealous investors in and promoters of penny stocks. From those humble origins grew a sizeable mass market financial site, which was acquired outright by AltaVista last year.

So how does Raging Bull fit in with AltaVista's focus on the business market? Actually, it doesn't. It is symptomatic of AltaVista's portal pretensions and entertainment-oriented flights of fancy in the recent past. Raging Bull generates massive page views, but one cannot imagine how AltaVista can continue to scatter its energies so far and so wide while true portals Yahoo!, AOL, and MSN (and almost Lycos and Excite) have them beat hands down.

I'll get back to this topic in part three of this series.

Show us the money

We started with a brief glimpse at business applications because that's likely where a company like AltaVista stands to make its money long-term. Given its size, accumulated intellectual capital, and strong brand, it is well-positioned to build search products for business based on a "build once, sell many times" philosophy.

And making money is something that has always been forgotten in the AltaVista equation. Many in the constituency of AltaVista loyalists became accustomed to AV always being there, and held the company to a high standard in keeping with its serious image and high profile. Various well-heeled AltaVista owners - it's now owned by holding company CMGI, who bought it from Compaq - were nice enough to keep this big, powerful search index afloat, for the simple reason that they thought it would be pretty cool to own a search engine, and that it might lead to something. That something they hoped for, one often suspects, is pumping a search engine up into a "portal," an initial public offering, inflated market valuations, and the ability to acquire other businesses for inflated stock. That probably won't happen now, unless AV finds a way to reposition itself not as a B2C behemoth, but as something more like an infrastructure player (and tossing phrases around Europe like "cutting edge wireless technology" probably won't hurt).

While it's tempting for the company to raise gobs of cash on the strength of page views or buzzwords, today's market sceptic is going to look askance at the use of the big AltaVista name as an excuse for lavish initial public offerings in Europe and North America; as a means of getting the public investor to keep the sober, serious search company in business for another few years. That's just delaying the inevitable. Better if AV becomes more like Yahoo! -- able to fund its operation with the cash flow created by its own profitable operations. To do that, of course, it will have to stop wasting its energies competing with Yahoo! in the horizontal portal arena.

Or maybe taxpayers would like to keep AltaVista in business. Hmm, thought not.

Fascinating or not, AltaVista's infrastructure role and forward-looking business search applications are what are going to pay for all the neat stuff they come up with in the lab.

Next time: Part Two - Serious Search Enthusiasts


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