Wednesday, May 21, 2008

Pay you to Live Search, brilliant?

Both TechCrunch and VentureBeat reported that Microsoft would announce a new search advertising model, which pays users who use the Live Search engine to search and eventually finish an online transaction. Is this a brilliant idea? Or not?

One week ago, I was at Redmond with the Live Search team. In Live Search, there is a group whose job is "to explore all the crazy ideas." The group picked me to interview and asked about my "crazy ideas". Unfortunately, however, I did not have any crazy idea except of a fairly novel vision suggested for Microsoft to compete with Google. In short, my suggestion was a totally un-Google Web search strategy that the Live Search crazy-idea people could not catch where my craziness was. As the result, they were not impressed by idea that did not sound crazy. Now I see what the Live-Search-craziness is.

The philosophy beneath this "crazy" idea is straightforward: when there are two sites from which we could buy the same product, we often choose the site that gives me more discount when checking out. Since Microsoft has lots of money, why not directly buy searchers from Google?

Is the idea "crazy"? Crazy, indeed.

I would like to quote a comment written by a reader (Tyler Wright) of TechCrunch. He has made a very cute analogy that points to the problem of this "crazy" idea---

"GM and Ford offer cash back to buyers, and they’re on their way out - and losing credibility daily.. Sounds kinda similar."

Ah-ha, this is the problem. GM and Ford often do more discount and promotion than Honda or Toyota does. But the discount and promotion seem do not really save their fate. Why does Microsoft believe that discount and promotion would save it from Google?

A deeper thought behind this strategy is that "online search" and "online transaction" are actually two varied phases. At the online-search phase, we look for a good search engine that can help us find what we want quickly and conveniently. During this phase, we also frequently look for advertisement provided by the search engine. By contrast, at the online-transaction phase, we simply want to finish the transaction as quick as possible. But at the same time, an extra bargain is alway appreciated. Very few people, however, will continue looking for product advertisement when they are checking out (because they are tired of long-time shopping).

By the former analysis, I cannot see why I should abandon Google for being my search engine, while at the same time I can use Live Search to check out. If many Web users adopt this simple strategy to maximize their benefits, I cannot see how much Live Search may gain by this scenario. To the end, Live Search could gain a few net-flow from Google due to the final check-out transaction. The problem is, however, this extra net-flow gained by Microsoft does little help for prompting advertisement in Live Search. This is thus the key of the entire issue.

Sorry, I am still too calm to be crazy.


Anonymous said...
This comment has been removed by the author.
Anonymous said...

Let's get crazy. I also think buying users with coupons instead of having them beg to use your product for its useful features is ... not a viable strategy.

Anyway as I said let's get crazy, it is much more interesting than trying to help Microsoft or any corporation anyway ;)

Let me reformulate my very shallow understanding of your work :
Your hypothesis is that the web as the subpart of the Internet is the most advance part as it holds the fastest evolving components.
Could you please develop on how it is possible to measure the speed of evolution ?
Is the fitness based on social utility (thus usability) ? Is it based on anything else ?
Can you consider that there is an "edge" to the web, an edge as in the most advance and the fastest evolving elements ? If yes where is the bleeding edge and can you locate it ?
Could having an automated mechanism to perpetualy know where the edge is give an advantage to someone desiring to evolve in this system ?
Is it positive for the system too in the sense that it foster innovation and the fastest adoption of the new functionalities ?

a (maybe crazy) bleeding edge seeker ;)

Yihong Ding said...

Hi Utopiah,

Thank you for all the questions and I think they are very interesting. I am not sure whether I could answer all of them. But I will try to lay my thoughts down so that you may find something interesting inside.

First, I am not sure how to evaluate the speed of Web evolution. You may have already watched my series of Web evolution. I have a pretty nice thoughts on how the Web may evolve. But the velocity of evolution, it is too hard to answer. But one thing I am sure. With the direction of correct theory, the speed of Web evolution could be accelerated.

In particular, if you are specifically interested in my thought of the timetable towards Web 3.0, I can tell you that we may come to Web 3.0 in about 5 years from now. By my theory, I think that 2008 and 2009 will still be the flourishing time of Web 2.0.

From one side, the accumulation of Web-2.0-quality resources is still at its beginning and far away from being serious troubled. On the other side, the speed of the accumulation of Web-2.0-quality resources is much more faster than what happens before the previous dot-com bubble because of the popularization of social networking. Hence we may not need to have three to four years preparation to reach the next transitional point.

From next year (2009) the issue of new WebROM will start to be a critical one. In fact, I foresee the current project about Data Portability is an attempt to the solution though most of the current discussion issues are still away from the real target.

But this is my predication. If the new WebROM cannot be built and successfully advertised in the realm of Web industry, we may have to experience the second dot-com bubble at about the year 2011.

In general, I don't know whether the Web has edge. ;-) In fact, many great systems do not have edge (e.g., our universe or the human society). I watch the Web is such a complex system that every node could be at the edge and at the same time at the center.

The term "edge" with respect to the Web is a comparative term. Inside the Web we may have small ecosystems that serves for special interest. For them, they may have edges. But to the entire Web, I cannot say it has edge.

I believe that it is alway good if a system can rapidly foster innovation and adopt new functionalities. We may experience a few failure in progress. But in a large democratic system as the Web, failure would not be too expensive for us to take.