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AOL To Launch White Label AOL-Only AdWords Monday

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Aol Search

This was embargo’d till Monday, but AOL just told me the embargo was broken so I can post it now. AOL has worked with Google to execute a white label version of AdWords that allows AOL advertisers to target only AOL audience members. The benefit to AOL is that they get to cross sell their and display advertisers into AOL Search. This is the first such white label deal I’ve seen done, though there may be others (I have a mail into Ask to see if they are doing it.)

From a draft of the release:

AOL today announced the launch of the AOL Search Marketplace, which is available to select AOL advertisers giving them the chance to buy sponsored links specifically targeting the AOL search audience ( ). The service, built on Google AdWords™ advertising technology, extends the suite of advertising solutions AOL can offer to marketers.

“Our advertising clients have told us they wanted the ability to target their search advertising to users of AOL Search, and now with AOL Search Marketplace we can offer this service,” said Mike Kelly, President, AOL Media Networks. “We have found that there is a significant impact when search and display campaigns are coordinated. The addition of the AOL Search Marketplace enables us to offer advertisers end-to-end solutions, everything from AOL to our industry leading third-party display network to video advertising and performance ads. This will let marketers better coordinate their advertising, and build greater efficiencies into their campaigns, with AOL.”

AOL® Search Marketplace uses a white-label version of Google AdWords®, providing advertisers the ability to buy search advertising that solely targets the AOL Search audience on the AOL® Client applications and®. This service uses the same best-of-breed functionality, features and reporting that advertisers have come to expect from Google AdWords. Until now, advertisers did not have the ability to segment and optimize traffic coming from AOL.

The new Search Marketplace is a result of the expanded five year strategic relationship AOL and Google entered into in December 2005. AOL test marketed AOL Search Marketplace with about 30 advertisers over the previous five months.

I spoke with Dariusz Paczuski, who manages AOL Search Marketplace. He told me that most of those beta advertisers have re-upped and increased their spend with AOL due to this new product.

Google tells me that the rev share between the two companies has not changed. They also issued this statement to me:

“As a valued partner we look forward to working closely with AOL as they roll out the AOL Search Marketplace to more advertisers. We believe this offering will enable AOL to present a more comprehensive advertising opportunity to their customers.”

AOL also announced two other related search products:

AOL Local Search ( ): Currently in beta, AOL Local Search incorporates technology from MapQuest – the Internet’s No. 1 mapping site, editorial from AOL’s CityGuide and geo-targeted advertising, to make it easy to find locations and reviews for local businesses, bars, restaurants, and more.

AOL Shopping and Commerce Search ( ): AOL teamed up with new shopping partner,, to provide a highly relevant comparison search experience, giving consumers access to an extensive catalog of products and services.

An Interview with Google Offline (Radio/TV) Competitor SWMX

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Henry Blodget offers this interview Josh Wexler, founder of SoftWave Media Exchange, which competes with Google’s nascent efforts in the radio and TV world. From Henry’s summary of the interview:

* Despite investing heavily in its radio and TV placement efforts, Google is badly lagging SWMX, especially in radio.

* In radio, Google sells remnant inventory, but the real business is in regularly scheduled inventory. SWMX generates more than 80% of its revenue from this.

* Google’s attitude–revolutionize the way advertisers buy advertising–has offended many traditional media owners and is hampering growth. SWMX is growing rapidly because it facilitates existing business practices.

* The current process by which radio and TV advertising is bought and sold is grossly inefficient. This creates an opportunity for electronic marketplaces.

* eBay’s media-selling initiative was considered ‘dead on arrival.’

* Companies like Spot Runner, which generate a lot of buzz, focus primarily on content creation and campaign planning. These companies are complementary to SWMX, which focuses on the back-end.

* SWMX expects to turn cash-flow positive later this year. Wexler believes the company’s current cash position will support its near-term initiatives.

* If Google were to buy a company like SWMX, this would require a change of approach to the radio and TV markets.

* The Google-Echostar announcement is more style than substance.

UBS Analysis of Comscore Search Numbers for Feb

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Many of you have noted that my postings have been hurried and cursory lately, that will continue for some time. I’ve been dealing with some family issues (my father) and things have been unusually busy over at FM lately as well. That said, I don’t want you to miss the stuff I’ve been reading simply because I don’t have the time to lard it up with my trenchant analysis. Here’s a summary from UBS’s Ben Schachter, for example, on the Feb Comscore search numbers and Google’s performance. Just wanted to pass it along.

Overview of comScore Search data

This report gives investors a monthly snapshot of internet search trends focusing on the 5 largest sites. We issue this report on a monthly basis, focusing on the same data points. We examine U.S.-only paid-search and world-wide search data as provided by comScore.

U.S. Sponsored Click Data for February

Google’s sponsored clicks were down 3% m/m, up 45% y/y, and 6% q/q. Yahoo’s were up 4% m/m, up 25% y/y, and 4% q/q. MSN’s were down 5% m/m, up 95% y/y, and 14% q/q. AOL’s were down 4% m/m, down 38% y/y, and down 10% q/q. Ask’s were down 6% m/m, up 3% y/y, and down 7% q/q.

World-Wide qSearch Data for February

Google’s total searches were up 50% y/y, 2% m/m, and 10% q/q. Yahoo’s were up 34% y/y, 1% m/m, and 8% q/q. MSN’s were up 19% y/y, 3% m/m, and 1% q/q. AOL’s were down 35% y/y, -2% m/m, and -14% q/q. Ask’s were down 4% y/y, flat m/m, and up 1% q/q.

Key Points

For U.S. sponsored clicks, GOOG showed 45% y/y growth vs. 54% y/y in Jan and 62% in Dec (2nd consecutive m/m decline, but was +6% q/q), while YHOO’s grew 23% y/y in Feb vs. 23% in Jan and 28% in Dec. YHOO’s click through rate increased 43bps m/m (Panama went live 2/5). GOOG’s coverage ratio decreased 118bps m/m to 47.5% although the % of searches w/ a sponsored ad and a click was 27% vs. 22% y/y.

Bottom Line

If one were to trade on this news (and we do NOT advise doing so because we think this data is only directionally accurate), it was not a good month of data for Google. Sponsored clicks were down for the second consecutive month and year-over-year growth rates are decelerating at a faster pace than expected.

However, there is an interesting aspect of Google’s February data that we think might be misinterpreted: the coverage ratio is down significantly (118bps m/m and 522basis points y/y). Intuitively, one might think this is a negative for revenue, however, Google stated on its last call that it was proactively lowering the coverage ratio while increasing its RPS. This is possible because while it is showing fewer ads, we think the ads are more relevant and getting higher click-through-rates and most likely meaningfully higher costs-per-click. This is shown by looking at the percentage of sponsored clicks on search results that have an ad. This metric is up more than 400 basis points year over year. Unfortunately, all of this makes it that much harder to quantify how this data translates into revenue for Google.

We also note that, as shown in the charts below, toolbar searches continue to grow in importance, and are growing significantly faster than the overall search market.

Google and AFP Settle Dispute

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Earlier this year I had a chance to spend some time with the head of AFP (Pierre Louette). He seemed to want to make it work with Google (background), and it’s clear he finally has. From Yahoo News:

Agence France-Presse, a global news agency based in Paris, has settled its lawsuit against Google Inc. and will allow the Internet search leader to post news and photos from AFP journalists.

The deal, announced Friday, settles the copyright infringement lawsuit that AFP filed in March 2005 accusing Google of posting news summaries, headlines and photos without permission.

Financial details of the settlement weren’t disclosed.

The deal will allow Google to use headlines and photos on Google News and other services that drive online traffic to sites displaying AFP news. The companies didn’t disclose where else AFP’s news would be used by Google.

The nut here: “Financial details of the settlement weren’t disclosed.” This has significant implications. More to come.

Look, It's Almost Friday

By - April 05, 2007

And honestly, it’s been one hell of a week. So when a major artist makes fun of another major artist via YouTube, you have to just smile, and love the fact that the web lets all this happen. For your consideration:

WSJ on Ask On Google

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A public article, so I’ll point to it, on Ask’s campaign to differentiate from Google in the UK….

Autonomy: Use my ACID, Please

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Autonomy, an enterprise search co out of the UK, is sure to add to all the hoo-ha about copyright technology in the Google/YouTube/Rest of World kerfluffle with this announcement on deep copyright search from its Virage subsidiary. The release, in part:

Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise and proponent of Meaning-Based Computing, today announced the release of Virage Automatic Copyright Infringement Detection (ACID). Virage ACID enables copyright owners such as broadcasters, production houses and publishers to maintain control of their Intellectual Property by automating the detection of illegal distribution of copyrighted material on the Internet.

Using Autonomy’s unique Meaning-Based Computing, which includes patented image and audio analysis technology, and powered by the Intelligent Data Operating Layer (IDOL), ACID offers a fast, accurate and scalable method of detecting breaches of copyright, wherever they are located and whatever format they are in. By automatically detecting any rich media that infringes an organization’s copyright, Virage ACID eliminates the need for content owners to spend hours trawling through video sharing websites, or manually scanning p2p file contents.

More coverage at here. Crows: $35 RPM

By - April 04, 2007

Local is a public company, so it has to be ready to defend its numbers. I just got a release which claims a $35 RPM for the site. That’s pretty darn good. Not Google good (estimates say Google’s at nearly twice that) but still, very good.

IRVINE, CA, Apr 04, 2007 (MARKET WIRE via COMTEX News Network) — (NASDAQ: LOCM), a leading local search engine, today announced that it has surpassed the $35 milestone for search traffic monetization during March 2007. This milestone reflects consistent monetization of over $35 in revenues per thousand pages viewed (RPM) on

The company previously targeted a $35 RPM based on current ad partners, and expects RPM to increase as it adds direct advertisers, a major initiative for the company in 2007. For the fourth quarter 2006, achieved a $29 RPM.