Friday, November 04, 2005

Getting paid for searching? Welcome to the 'user loyalty model'

Now this is going to make the search engine wars more interesting. And not surprisingly, it had to come from Microsoft. In a recent interview to UK's Computing magazine, Bill Gates alluded to the prospect of search engines (read MSN) 'rewarding' users for using search.

That's exciting for several reasons: a) competition is bound to increase, that will help PPC advertisers who are increasingly beginning to pay an arm and a leg for every click... (b) searchers will benefit not only with the results they are looking for, but the cash or whatever other rewards that might be on offer.

But probably more importantly, it has the potential to shake up the search engine hierarchy. That's because both Microsoft and Yahoo! have a significant advantage over Google if and when they launch a 'user loyalty' program, since both these companies have a bigger base of 'registered' users to start with. That makes it a lot easier to roll out a loyalty/rewards program.

Some analysts say that such a program may not work because users will still go for relevance. Yes, of course, but who is a judge of relevance? Relevance is effectively a perception of a USER, let's remember that, and not of the search engine--- and this perception is subject to change. Does a user always expect the best result at the top of the organic search result? No, definitely not. Will a user be willing to look down a few places more if he/she is going to get a reward for doing the search in the first place? Most likely yes.

Users of any product will be willing to upgrade/downgrade to another product or service as long as they PERCEIVE that the value of what they are getting additionally is MORE than what they had previously.

I think the relevance argument is a bit flawed and counter-intuitive (more on it in separate post).

More later,

Manoj

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