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Coming Up: Paid Placements

The shifting economics of the Web are also producing a number of subtler--but potentially equally vexing--effects.

The stalwart search engine, an entity nearly as old as the Web itself, is undergoing significant change as some search sites begin charging other sites for listing them on their search results pages.

There are two practices at work here: paid inclusion and paid placement. Paid inclusion means that a Web site pays to get itself listed in a search engine's results for relevant topics. Paid placement means that a site pays for premium positioning of its listing at or near the top of a search results page. Both practices are common, in one form or another, at virtually every big-name search engine or Web portal.

Paid placement isn't new; your local Yellow Pages is a nondigital form of the same thing. But the practice gets shifty when search engines do not clearly distinguish between results that were bought and results that weren't.

Overture Services (formerly GoTo.com), which syndicates its service to thousands of other search services, is wholly predicated on paid placement. The practice's pioneer, Overture is so forthright about its policy that it reports next to each listing on its results page the amount a site pays Overture every time a user clicks on its listing.

Other search engines, like AltaVista, LookSmart, and Lycos, are less forthright about who has ponied up and who has not. These companies identify paying sites as sponsored links or--even more ambiguously--as featured listings. The Ralph Nader consumer group Commercial Alert has filed a complaint with the Federal Trade Commission asking that search engines be required to clearly mark as ads any listed links that third parties have paid for (see " Nader Group Bashes Search Engine Ad Policies.")

Marissa Gluck, a market analyst with Jupiter Media Metrix, says paid placement is useful to consumers in certain kinds of searches. "When it comes to searches for transactional information, for commerce or retail--yes, it's a good thing for consumers," says Gluck.

For example, in response to our query "motorcycle insurance," AltaVista, LookSmart, and Overture all gave the top listing to paid-for links of national insurance providers that offer and/or specialize in motorcycle coverage. The paid-for rankings may be less distinguishable than they ought to be, but the results are useful when you're looking for a specific item or service that you want to buy--search engines with paid placement spit out Web sites that want to sell. The same query at Yahoo's site yielded some insurance companies, but they were mixed in with FAQ pages and motorcycle fan sites.

The primary drawback of paid placement comes when you're looking for simple information on the Web and you have to wade through a river of e-commerce listings in order to get to the content sites that you really want to consult.

For example, in response to our query "J.D. Salinger," all of Overture's top five returns led to online bookstores that offer the author's literary works for purchase. In contrast, the editorially driven Yahoo returned a healthy cross section of academic sites, biographical resources, fan pages, and FAQs. It should be noted that Yahoo does permit a commercial Web site operator to pay a fee to expedite the review process in which Yahoo considers including the site in the directory's index. But Yahoo's site states that payment "does not guarantee inclusion in the directory, site placement, or site commentary."

Search services that provide paid and unpaid links should clearly mark the two types. Consumers should let search engine operators know when that doesn't appear to be the case. Regardless, you need to use an eagle eye when paid placement is involved. Remember, the inclusion and placement of a link on a results page doesn't always mean it's among the most relevant or informative results.

Searcher Beware: Paid Placement Moves In

Overture Services (formerly GoTo.com) was the first search engine to use paid placement. The results page clearly indicates how much a site pays Overture each time you click the site's link.

Lycos is less clear than Overture about identifying the sites that have paid for top placement in its search results. The search engine refers to these links ambiguously as "Featured Listings."

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