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|Nielsen Says Search Engines are Leeches|
are they sucking away your profits?
Has anybody read this latest Alertbox on search engines [useit.com]?
Nielsen basically says that if you rely on search traffic (PPC mostly) then you will never be able to increase your profit margin much because you will continually have to bid higher on your keywords. Anybody find this to be true? Do keywords continually increase? Is there any way to work together (with one's competitors even) to set a limit to the bidding wars and stop the evil empire?
Hasn't the vortal thing (including 'quality' type site) been done already by Looksmart? Anyway, Looksmart, Lycos, Google are the least of your worries as Reed Business is a Mega Mega player and with their 30 odd verticals plus 2 major companies such as Totaljobs and Caterer.com series of engines - will blast any competition out of the water.
I see 'quality' sites as a tough nut to crack, mainly down to the costs issue involved. You can't maintain a quality anything without some form of profit generation. What about development needs of this site? You will need to stay one step ahead of the nearest rival, if not well infront of them.
Can't do that without cashflow, and if this new form of site is that hot it'll need oodles of staff to handle the customer flow, enquiries, maintenance, admin, payment processing etc etc. In other words the bigger a company gets, the more staff it takes to maintain it.
|Hasn't the vortal thing (including 'quality' type site) been done already by Looksmart? |
Looksmart is a commercial operation. I am talking non-profit.
|Can't do that without cashflow, and if this new form of site is that hot it'll need oodles of staff to handle the customer flow, enquiries, maintenance, admin, payment processing etc etc. In other words the bigger a company gets, the more staff it takes to maintain it. |
Oodles of staff? No way! Haven't you heard of automatic payment processing systems? A good website design and inforation interface would ensure that enquiries would be limited to an easily manageable level.
In my previous post I provided a conservative estimate of how staff could generate $600 per hour. If the site is that hot increased staff = increased income. This would be type of problem I would like to have ;).
Looksmart is a commercial operation. I am talking non-profit.
>>>>>> Yep, I'm talking non-profit as well, Looksmart was used as an example of something that has capability for expansion.
Are you assuming that every company start-up is owned by a fully qualified web designer that can design anything? You forget many don't know how to do this, yet want to run a business. A bit different when you look at actual reality isnt it.....
>>>>>>Oodles of staff? No way! Haven't you heard of automatic payment processing systems?<<<<<<
Er, yup. let's see Barclays small business, Paypal, Protex, World pay etc. But they ALL want paying mate, some don't ask for extortionate set-up fees, while 1 wants 6 months upfront. If you don't have the £600 - you can't even take payment online. Even if you use Paypal, you still got to find the cash to pay a web guy to incorporate this into a CMS..... I think you under estimate my knowledge of what's involved in setting up businesses.
>>>>In my previous post I provided a conservative estimate of how staff could generate $600 per hour. If the site is that hot increased staff = increased income. This would be type of problem I would like to have ;).<<<<<<
That's about £400ish uk pounds (give or take a little), jesus! so if you pay that amount to staff, how much do you charge for the service, and secondly will anyone in their right mind pay that in the first place - when the majors offer PPC....
Your charges are unrealistic. Why does everyone think they are the Dogs, when they quite clearly aren't. lol
Tell, you a story - I was going to charge £150 per month for advertising on my site, ok. I sent out a direct mail campaign to 800 emails and many were outraged at the prospect. That was just asking for £150! You start demanding rediculous amounts and few will pay. You actually want to keep prices respectable and reel the clients in, then once you have a rapport and built up a relationship - maybe then once you are established, then you can up your charges, but people won't stand for being ripped off.
I think you should read what I said again beacuse you are clearly misinterpreting it.
No. You were on about how staff could generate $600 per hour. If you expect staff to generate 600 in sales in ONE hour - you would have to be paying them a serious amount in commission to get them to make that kind of output/effort. Not only that, but staff aren't just going to do this without weighing up whether it's achievable.
It's called 'Expectancy theory'.
So $600, even if that translated into £50 per customer, that's still 12 sales per hour, which would be unrealistic. I don't think you have enough traffic coming in to be able to convert this, - as that is one heck of a selling rate, which as a professional sales person I have to say is impossible - even on the web as I know it, with everything automated to high heaven.
Of course I'm guessing on what your product/service might be, but without providing proof of what you do, you give others on here little to go on.
Perhaps before boasting about sales, you should be prepared to prove this, otherwise people WILL make judgements. You can't blame them for that.
I give up :(
Don't give up--just recruit a team for your open-source search engine and prove that the skeptics (of whom I'm one) are wrong. :-)
Recruiting a team eh hmmmmmm. Interesting idea, except how will staff be paid without turning a profit?
Any new SE venture is going to be low on funds because it's well, 'unknown'. How will this person overcome that?
|Interesting idea, except how will staff be paid without turning a profit? |
Non-profit isn't necessarily the same as having no money.
Not everyone is living from paycheck to paycheck.
It's pretty common for people who share a vison and goals to invest time into a business with little prospect for immediate payment of wages. The same is true for non-profits.
Which of course is how a lot of small businesses and non-profits get started.
The trick would be to find people who can invest the time and who have the skills and share the vision needed to make the project work. And/or to find people who may or may not have the skills but share the vision and who are willing to invest enough cash to get the project started.
Neither is uncommon in the non-profit world.
BeeDeeDubbleU, good ideas...
I've been looking at some of these issues for the last few months while building some SE-related technology.
It's definitely doable to have an open source search engine (there is already a lot of open source SE code)--whether it can get big enough to compete with Google is another question. Wikimedia got big through open source and community collaboration so I think it's possible. For a lot of informational queries Wikipedia is better than Google for search.
Then there are projects like Nutch.
Nutch bills itself as an "open source search engine". And Tim O'reilly is on their board--not sure if they will have a "retail outlet" but who knows...I think some other big engines have been playing with the Nutch code.
According to Nutch:"Web search is a basic requirement for internet navigation, yet the number of web search engines is decreasing. Today's oligopoly could soon be a monopoly, with a single company controlling nearly all web search for its commercial gain. That would not be good for users of the internet.Nutch provides a transparent alternative to commercial web search engines. Only open source search results can be fully trusted to be without bias. (Or at least their bias is public.) All existing major search engines have proprietary ranking formulas, and will not explain why a given page ranks as it does. Additionally, some search engines determine which sites to index based on payments, rather than on the merits of the sites themselves. Nutch, on the other hand, has nothing to hide and no motive to bias its results or its crawler in any way other than to try to give each user the best results possible."
All it takes is the will to succeed ;)
P.S. I am too old and skint to get involved ;)
I'm glad superpower brought up nutch.
Why is the nutch project progressing so slowly?
Didn't Yahoo! have a front end for nutch at one point?
>>>Non-profit isn't necessarily the same as having no money.<<<
Only if you're lucky and have a very good idea. For most that 'dream' is few and far between.
>>>Not everyone is living from paycheck to paycheck.<<<
Too true. At last, someone who admits the truth. Maybe now others can see the web is nothing more than an open invitation too actually lose money. Of course, money can be made, but it takes more than passion and time.
It's pretty common for people who share a vison and goals to invest time into a business with little prospect for immediate payment of wages. The same is true for non-profits
Most non-profits are actually charities and any business that is non-profit, isn't a business at all.
No money - means NO business! Share a vision, work with a passion may work for a start-up charity (non profit). But not for a business that's intent, MUST be to turn a profit.
Passion and will etc - I wonder what all that is a code for. But that's the mentality and acceptance of one country over another. Us Brits don't buy into all that crap, as we tend to be very realistic regarding goals and money and things. Well, most of us anyway.
|Most non-profits are actually charities and any business that is non-profit, isn't a business at all. |
A business? Who said anything about a business?
You are confusing the issue again. Organisations that do good stuff are not necessarily businesses.
TWAIN Working Group
The Rotary Foundation
The Nature Conservancy
Better Business Bureau
Not for profit organisations can and do achieve many things. In some situations they can do this better than commercial organisations because they are free of many business pressures and influences.
This current conversation is about Non-Profits ie, an entity that doesn't charge money for what it does. This fits in nicely about SE's that charge too much, or Leaches - that's the original post.
Someone mentions a Search Engine and we now get 2 discussions surrounding the non-profit issue. No wonder there is confusion - but I'm not wrong.
I can't believe you think that compiling some list would make me agree with you. You even got that wrong as Nominet IS a business and DOES charge for transferring domains.
I quote from their website:
"Nominet is the internet registry for.uk domain names.
We manage over four million domain names, making us the world's fourth largest Internet registry. With 3,000 members, 130 staff and a turnover of £12m"
A turnover of 12 million, and they are non-profit?
How can they have a turnover and - and a VAT registration number (663 4990 03) and not be a business. They are charging VAT on their services...
"Nominet charges £30 plus VAT to make a transfer. This fee, which is set on a cost recovery basis, was introduced on 19 May 2003 and is reviewed every six months. Nominet charges to cover the service provided.
The others you mentioned - some are registered charities, and I would have to check the rest, but I'm just not that sad.
Hi Ronin, Yahoo Labs was using it for a while but I am not sure if they still are. I believe Creative Commons is too.
From the perspective of learning open source SE development I think Lucene/Nutch is worth a look. There is at least one detailed book on Lucene. Also Lucene has been ported to Python and Ruby (Ferret), which is good if you are not a Java developer. These efforts are still quite early and seem disorganized but that's often the way this type of thing starts. If you look at Wikipeia's traffic, the first couple years were minimal as they built the foundations but then it just took off.
The Ruby port may encourage more development among the Web 2.0 crowd. It's still too early to tell. [ferret.davebalmain.com...]
Also, there is a Nutch forum at Nabble:
|his current conversation is about Non-Profits ie, an entity that doesn't charge money for what it does. This fits in nicely about SE's that charge too much, or Leaches - that's the original post. |
Non-profits don't charge for what they do? You still don't understand do you?
|The others you mentioned - some are registered charities, and I would have to check the rest, but I'm just not that sad. |
I don't know where you are on the sad scale but if insulting people is part of your make up you should at least consider putting your brain in gear before operating your mouth. Nominet is actually a good example. Here's another quote from their website ...
|By the early 1990s, commercial companies started to sell domain names to customers. As demand for domain name registrations grew, it became clear that a voluntary group could no longer cope with the volume of registrations being requested. A new organisation was needed to manage the .uk TLD and as a result Nominet UK was formed. |
There was discussion about what type of corporation the Registry should be. The options to set-up as a profit-making company or a charity were rejected, and Nominet was established in 1996 as a private, not-for-profit company, limited by guarantee.
I don't care what text you extract - I'm telling you Nominet provide a service and charge for that - er which makes it a business transaction actually.
It's in black and white what they do. They are in the business of transferring domains. They don't seem to do it for no money - therefore cannot be regarded as a non-for-profit.
The problem here lies in the language used namely 'non-for-profit' which I'm assuming means 'not making profit' - BUT it has another definition - which is 'not intending to make a profit, which is a totally different kettle of fish. I could NOT intend to make profit, but do! So if I do make a profit, I MUST be charging for something correct....... Unless people hand me a bag of cash for no reason hehe
If you aren't clear about what something means then don't use jargon in the first place.
|They are in the business of transferring domains. They don't seem to do it for no money - therefore cannot be regarded as a non-for-profit. |
"Not-for-profit" is a legal designation, describing a certain type of legal, possibly corporate, entity.
"Not-for-profit" means "an entity whose primary objective is not profits"; it does not mean "an entity that never takes in any money or other considerations".
In point of fact, not-for-profit entities can have highly-structured fee schedules. For instance, government "public" corporations are not-for-profits, one example being Amtrak. According to your definition, as I read it, since Amtrak charges its passengers, it can not be a not-for-profit corporation. Or else, since it is a not-for-profit corporation, it must then not be a business, or at least it must not charge for the service it provides.
I'm afraid I cannot agree with either interpretation, and will have to stick with the standard definition [en.wikipedia.org] of "not-for-profit".
Not-for-profit" is a legal designation<<<<<<<
Well, if that's true, then they've just broken contractual law then. Organisations that pass themselves off legally as 'non-profit' and then willfully charge for said service/duty have just gone against terms of legal agreement.
Obviously a convenient loophole somewhere. I do have written proof of such a business transaction from Nominet, and I'm taking it as I've been charged through a business transaction for services by a company who claims it doesn't take payment, yet it also claims it does. So far we have various paragraphs from the same website both claiming 2 entirely different things. Not our fault - but Nominet and god knows how many other .orgs are to blame.
:) Moves away from lectern and goes off stage)
Eventking you are totally wrong about this and I had decided not to offer any further response to your posts but you may be misleading other people here. You do nothing for your credibility by continuing to press this point when you are so clearly mistaken. You are either incapable of understanding the concept of non-profit or you just cannot apologise and move on.
|Well, if that's true, then they've just broken contractual law then. Organisations that pass themselves off legally as 'non-profit' and then willfully charge for said service/duty have just gone against terms of legal agreement. |
Nominet have broken no laws at all and they do not "pass themselves off" legally. As Stapel rightly pointed out there is nothing to prevent non profit organisations from charging for their services and they need enter no "legal agreement" not to do so. They still have to generate revenue. The only difference is that this revenue cannot be redistributed to shareholders. It must be ploughed back into the organisation and that is how the system I proposed back in message 49 could work.
|A good manually edited, open source or non profit SE whose only objective was to produce the best search results without carrying advertising could gain popularity very quickly. The good vibes it would generate would ensure that it gained positive publicity that would ensure it's continued success. |
[edited by: engine at 3:53 am (utc) on Jan. 18, 2006]
>Organisations that pass themselves off legally as 'non-profit' and then willfully charge for said service/duty have just gone against terms of legal agreement.
Eventking, have you ever actually looked at the tax returns that legally-non-profit organizations are required to file? Did you know they were public records? Or have you ever actually gone to, say, the local Red Cross to see what services they offer--for a fee?
My wife teaches First Aid and CPR classes for the Red Cross. There is ALWAYS a charge for taking those classes. She volunteers HER time, but things like printing the class materials, purchasing and maintaining the practice dummies, maintaining records -- take money: the people who take those courses pay fees for the goods and services they receive. (You don't have to take my word for it: check out the Red Cross website!)
I am not a tax lawyer, but I have spent a number of years professionally supporting high-end tax-return-preparation software for accounting professionals. And I assure you that the tax forms and formulas presuppose the legality and normalcy of fee-for-services income within such organizations: I can even say from personal experience that accountants are regularly called upon to report such income. The relevant tax return forms and instructions (990, 990T, 990PF, and ancillary forms) are of course online at the IRS website.
Hutch, I don't know if you have been watching this thread but there was lot of misunderstanding about what exactly a non-profit organisation was. It developed into a slanging match and the mods correctly, snipped much of the thread.
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