The recent slowdown in the economy has been big news.

Common sense has told me for a long time that the Internet search industry must find revenue models that work.

A popular perception is that search engines are more a public service than companies striving for profitability. For example, the Yahoo! model of generating revenue from advertisers has received criticism despite being successful so far.

As the shakeout continues, what search engine revenue models will survive? Are the days of commercial-free searching over?

What's Working?

Inktomi, a service that provides search technology to portals worldwide, comes out of the shakeout with what appears to have been the best plan all along.

Inktomi collects a tiny fee for every search request passed to its system by portal partners such as MSN, AOL, Hotbot, Overture, iWon, About.com and a host of others.

AllTheWeb (FAST Search & Transfer ASA) has had less success emulating the same business model but will likely continue to win business, primarily in Europe.

Google -- still privately held -- continues to silently run strong in the midst of economic uncertainty after having won a large client, Yahoo!, away from Inktomi. Google sells its technology widely, too, but Yahoo! remains its primary client.

Inktomi continues to be the dominant search technology seller.

Pay to Look?

Can paid-for submissions support search engines? The recent addition of various paid-submission and paid-placement models give search engines a source of revenue where none existed before.

Yahoo! and LookSmart offer programs in which, for a fee, editors will expedite a site's addition. The fee does not guarantee a site will be added, only looked at in a timely manner.

Paid submissions alone will not generate enough revenue to support the operating costs of the average search engine except, possibly, in the case of paid-placement engines following the model of Overture, FindWhat.com and Kanoodle.com.

Bidding Up

These engines have an open-bid process whereby top positions go to top bids. It's too soon to tell if it will fly.

The open-bid process, however, has helped Overture develop affiliations with AOL, AltaVista, Lycos and others by emulating Inktomi's business model and closely resembling Amazon.com's affiliate marketing programs.

Searches for which Overture has no bidders are passed to Inktomi. Inktomi returns data for Overture to format as though they were its own. (Inktomi sells search technology in this manner.)

Inktomi itself has begun a paid-inclusion program. A webmaster can pay to have pages included within 48 hours of submission without any guarantee of positioning, but pages are re-indexed an average of every 48 hours for 12 months thereafter. Most webmasters are happy to have the guarantee their important pages will gain entry.

Search for Tomorrow

Email and Internet searches remain the largest Web activities. This sounds obvious; in fact, I don't really expect things to change much in the future. E-mail will always be a basic Internet application, and people will continue to surf using portal bookmarks. But half their time spent at portals will be used for searching.

The future of searching will support a diversity of Internet applications, some commercial and some not. This is true already. Among search engines powered by Inktomi, there is diversity in portal controls and settings that supply results unique to each search engine.

Further, desktop applications and proprietary technologies exist that, among other things, can hyperlink text in documents on your hard drive to Internet search processes.

With users tuning out banners and other online advertisements, it makes sense to assume they'll be wary of commercially supported search results. I'll bet the average Web user wants to feel secure that commercial-free technology returned their favorite Web finds and not sponsored listings.

Therefore, while a desire for commercial-free Internet search technology exists, there are those who are happy to follow commercially ranked links to a useful site; that is why Overture will continue to be successful.

In the future, there will be room for both models.

   

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