Search engines: how advertisers shape the results you see (2)

By Stefanie Olsen

The commercial practices of search engines are in the spotlight after a recent warning shot from US federal regulators over inadequate disclosure of paid links.

At the centre of the controversy are two commercial schemes offered by search providers: paid placement and paid inclusion.

Paid inclusion is less well known than paid placement among search engine users, but it is no less popular among marketers and may raise more troubling questions when it comes to sorting out its effects on actual search results.

"Paid inclusion gets more complicated because the deals vary a lot," said Dean Forbes, an attorney with the FTC's division of advertising practices.

"If all of the sites in the search engine's results were paid inclusion then that should be disclosed because that makes it an ad medium," he said.

Paid inclusion largely pertains to "organic" search engines such as Inktomi, AltaVista, Fast Search and Transfer's AlltheWeb, which provide technology that scours the Web and uses mathematical algorithms to compile relevant results. Under financial pressure, many such sites developed programs that guaranteed they would "crawl" or search a web address more often, for a price.

Such programs have been growing in popularity in the past year.

Inktomi, for example, last year started Index Connect, which lets small and medium-sized sites pay a flat, annual fee to have their web addresses regularly indexed. Larger sites such as Amazon.com and eBay, that want assurance that more than 1,000 addresses are indexed, pay on a sliding scale depending on the category. These sites can pay anywhere from 15 cents to $1 each time a web surfer clicks on a hosted page - which is similar to the Overture model.

Others introducing similar programs include AltaVista, Ask Jeeves' Teoma and Fast's AlltheWeb, which plans to begin a paid inclusion service in September. InfoSpace, which operates Excite.com, just this week introduced a new paid inclusion program that lets marketers have their website content refreshed in its index every 48 hours.

Google delivers unbiased search results from a vast index of websites; the company does not accept fees for cataloguing sites.

Companies that use paid inclusion are taking steps to better disclose the practice in the wake of the FTC's letter last month.

Fast's AlltheWeb publicly announced support for the FTC's request and it added a link, called "what's included", to describe its paid inclusion programme. AltaVista now includes a tiny link near its results pages called "about", which leads to a disclaimer that describes how companies can pay to have their sites visited more frequently.

Teoma also will include an "about" link in coming weeks that is close to search results. LookSmart this week plans to add a pop-up link that outlines how commercial listings can appear in a directory of site reviews.

For an explanation of how Paid Placement works - the alternative to Paid Inclusion, see http://www.silicon.com/a55181

Stefanie Olsen writes for News.com