For online shoppers, a sorry 'search'

Want to let the search engine do the shopping?

Many Americans use the Internet for the same reasons they turn to the Yellow Pages – to learn about a product or to make a purchase.

But what many online shoppers don't realize is this: When search results pop up on screen, the websites listed first may not be the ones most relevant to their queries. Rather, the top positions often go to sites willing to pay search engines top dollar for prominent placement.

Such dealings, which have emerged over the past two years, are yet one more indication that the Internet's transformation from an information clearinghouse to a commercial enterprise is well under way.

"It's important for people to know that search engines have been hijacked by marketers," says Gary Ruskin of Commercial Alert, a consumer advocacy group, who asserts that search engines are "central to the quest of learning and knowledge in the information age."

To that end, the Federal Trade Commission last month made public a letter warning search engines to disclose those results that are paid for. Several have responded by tweaking their policies, but experts say some search engines' practices mislead consumers.

The practice has been driven by online retailers' desire to stand out in a virtual forest of millions of Internet sites. There's always advertising, of course, but retailers hawking their goods or services online now believe Web shoppers have tuned out ads. (Internet ad spending fell 12 percent in the first quarter this year, according to media-research firm CMR.) Many retailers hope bidding for top placement on search engines gives them choice access to consumers' eyeballs.

As general manager of Neo-Image Candlelight, Gary Strat relies on high visibility on search engines to drive traffic to his website (www.candlesjustonline.com).

Competition, even online, is fierce. A search for the word "candle," for example, yields between 1 million and 3 million results, depending on the search engine used. Bidding for a good position is essential to the survival of Mr. Strat's business. "Without paying money, being on top is luck of the draw," says Strat.

To get top billing, he works primarily through a service called Overture, which develops lists of websites carried by major search engines, including AltaVista, AskJeeves, MSN, and Yahoo!.

Internet retailers bid for position on Overture's lists. They place one bid for each search word or phrase they want their website to be listed under.

Strat bids on 40 words and phrases each day, including "candles," "wedding candles," "floating candles," and "votive candles." The bids range from 5 cents to 80 cents, he says, depending on the popularity of the term. The top bid for "candles" is generally about 80 cents on Overture (www.overture.com).

Each day, the highest three bidders are guaranteed the top positions for search results on participating search engines. Neo-Image Candlelight pays Overture between 5 and 80 cents whenever a Web user clicks on its link, even if no sale is made. Overture shares part of its profits with the search engines.

Google, another search engine, offers a similar bidding program. America Online – and, in about a month, Netscape – subscribes to its service.

Winning a spot on Overture's and Google's lists of top sites is vital to many e-businesses. Some compare it with gaining shelf space at Wal-Mart or a major supermarket chain.

"A ton of money is flowing into search-engine marketing because users rarely look past the first page of results," says Danny Sullivan, editor of Search Engine Watch, an online trade magazine. The bidding, he adds, yields about $1 billion a year for search engines and their marketing consultants.

Search engines display results in different ways. Many first list sites that have an association to the company that runs the search engine itself. The first results America Online offers, for example, are labeled "recommended sites" and lead to affiliated companies. MSN calls them "featured sites."

Beneath the affiliated sites, most engines list paid placements – such as those bid on by Gary Strat – and label them "sponsored sites." Before the FTC statement, AltaVista labeled paid results "products and services."

AltaVista and Google list sponsored sites both above and to the right of rankings that are not paid for. Google also overlays color bars on sponsored links to emphasize their status as paid advertisements. Unpaid search results, which often run in the millions, are listed last.

But even these are influenced by money. Because of the huge number of websites, search engines lack the resources to inspect the relevance of each. Companies that want their sites included in a search engine's database can, however, pay a fee for the service.

AltaVista charges $70 a year to include a site in its general database. Lycos charges $12. Yahoo!, which relies on human beings rather than software to evaluate and rank sites, promises expedited consideration for $300 a year. Google and Netscape do not offer websites preferential inclusion for a fee.

Until two years ago, search engines relied exclusively on complex algorithms and "crawling" software to find websites and evaluate their relevance to a specific term being searched for. Websites have since found tricks to make their sites appear more attractive to inspection.

Many repeatedly use keywords in their sites' text and programming language. Some persuade other sites to link to their own, thereby making their own sites appear more authoritative.

Other sites go to greater lengths to get noticed. "They create pages loaded with key words that are not even intended for human beings to see," says Sullivan. "As soon as the page appears, it disappears and becomes an e-commerce website."

Search engines will continue to be the recipients of millions in marketing dollars, experts say, because they offer companies a direct link with Internet users interested in their product or service.

Still, consumers can rely on a few safeguards to find objective information online. Most search engines, for example, erase from their indexes sites that have little relevance to specific search terms.

Recognizing consumers' distaste for ads, some research sites, like www.refdesk.com, instead ask users to make a donation via credit card.

If the big search engines tilt too far toward paid results, experts say competitors similar to refdesk.com will fill the void. "I would suspect there would be another search engine with a very simple, very clean, neutral service," says Steve Telleen, a website quality analyst with Giga Information Group.