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We also know that this company used to be one of the cool, new, and wonderful dot coms which were at one time worth more than $200 per share.
However, according to their Q10 filings with the Securities and Exchange Commission, it looks like they know they'll be out of business in November.
Where did Inktomi's business go wrong
Last year, a Ralph Nader backed consumer advocacy group called foul on search engines, saying that they needed to disclose better what results they were serving: ads, or algorithmically driven 'objective' search results. While INK isn't an actual search engine, they still serve results to one of the offenders in this case, to which the FTC recently responded with a letter saying some SE's needed to be more honest.
INK's programs of pay for inclusion / XML feed, are never properly disclosed at their portal partners site. They also don't tell people up front that paying to play gets you ranked higher. This might have changed since they relaunched their newer, better index, however when they first launched their pay for spidering program, you had to pay to be in the db that was queried first for results.
Now, with a stock price falling, financial troubles relating to their headquarters, and even their pay per click customers getting less traffic (because of the larger index) their revenue outlook is shoddy, at best.
With a share price of .46 cents last time I checked (yesterday) and no new partners or contracts in site, their Q10 filing last month has a very omnious sound of forboding in the closing lines.
WE MAY NOT BE ABLE TO CONTINUE TO MEET THE CONTINUED LISTING CRITERIA FOR THENASDAQ NATIONAL MARKET WHICH WOULD MATERALLY ADVERSELY AFFECT OUR BUSINESS AND
FINANCIAL CONDITION.
From the Inktomi Q10 SEC filing [biz.yahoo.com].
To continue to be listed on the Nasdaq, a company needs to keep their price per share over $1.00 USD for 10 days or more out of 90.
Having said that, INK will be out of business in November unless they sign a new partner.
This is great news for search engine optimization / and web publishing as a whole. Adversiting is one thing, search engine results are something different, and should be treated as such.
Littleman has said that PFI is a failed business model. In two months, when this company finally bites it, I'll be glad to see his proposition be made truth.
I don't perceive them as a bad company and I for one won't be dancing. I'm also not going to begrudge them for trying to make a buck.
It looks like they dropped below $1.00 USD before July 19th.
That would change the date from the 14th of Nov, to the 19th (at the latest) of October.
Any bets that they'll outlast my original prediction?
There are plenty of other ways they could have chosen to make money - they made a bad move, and started a flawed business concept which others have embraced.
This is why they are a bad company. It's not personal :) just business.
Strictly business, baby. Strictly business.
I'm not sure where the animosity comes from; One of my sites - a non-profit - has been listed free by Inktomi for several years, resulting in decent traffic from Ink-based portals.
I for one hope they can figure out a way to return to profitability, be it by changing their business model, pricing plans, services, or whatever.
Oh, here's another reason... Notice the "Sponsored in part by Inktomi" appearing on certain pages of this site? As an individual supporter of this site, I appreciate that!
Jim
That just refers to PubConference Jim.
I'm not sure where the animosity comes from
Bit of a history lesson for you, as mentioned in my above post.
INK created XML based PPC - they also were the first ones to do pay for inclusion.
Though, I hate to do this - they'll be delisted at the beginning of the next month.
unless they can manage to more than double the valuation of the price of their stock for more than 10 days in the next 5 weeks
Their ideas have had a profound impact on the way search engines view monetization - and this has been a bad thing, for many reasons. The recent (last year, and now response by them) FTC letter to search engines only highlights a small portion of what it should address.
Every page should say something like.."click here to find out how to get your site into our index!" or "pay us today to get your site ranked here!"
The average guy would probably pay...IF he knew about it...oh well...back room, dodgy stuff does command a price.
>Having said that, INK will be out of business in November unless they sign a new partner. This is great news for search engine optimization / and web publishing as a whole....
I think it would be very sad and a backward step - but everyone is going to have their own opinion and (of course) are quite entitled to them.
Even if it does happen - I can't see the other SEs using PFI and trusted feeds suddenly stopping.
Before they introduced PFI, their content based ranking algorithm got beat up pretty badly by us, the SEO community. We kept "hacking" their algorithm and spamming them and lowering the results of their index. We had a long tit-for-tat "war" with them, with us launching new "attacks" (seo techniques) that would gain top ranking, and them attempting new "defenses" to maintain the relavency of their results. In the end, we "won". We proved that site page content analysis alone is inadequate. More than us, Google won by pioneering link analysis, providing much better results and making obsolete all the search engines based on content analysis alone.
Along with this, the weakness of Inktomi's revenue generation machine and business model became apparent at the same time as the global economic collapse. Their other (non-search engine) divisions pretty much collapsed economically. And, while they were still generating good traffic to their search engine results through MSN, AOL, Yahoo and others, they were not making enough money.
Which moves them into the second phase. To generate desperately needed revenue, they implemented a bad idea badly. The bad idea is PFI with its fundamental contradictions. Their decision to stop crawling the web to encourage inclusion payments transformed their database from an information source into an advertising medium. This flows from the fundamental flaw of PFI: it has forced inktomi to be torn between two irreconcilable positions - an advertising medium and a search engine database). I think their recent moves to begin agressively crawling again is the best move and what they should have done from the beginning. But, it appears to be way too late.
I think inktomi's move to PFI, the decisions they made during its implementation, and, even, InktomiGuys behavior on this forum all demonstrate the lack of imagination and insight of Inktomi top management. Maybe that is the underlying explaination for all their trouble. I wasn't alone in seeing, at the time the decisions were made public, the wrongheadedness of their PFI strategy. When they fail, their management will blame it on insurmountable market and technological difficulties, but they didn't have to fail - their failure is a result of their unimaginative leadership.
They need have only positioned their paid service as "Pay for Freshness" rather tna as "Pay for Inclusion". They still should do that. PFF is a valuable benefit they can offer their clients and many websites will pay for it. They should dis-associate their paid offerings from anything to do with inclusion. Web sites are included becasue their crawler finds them. That is the only defensible position if they are going to claim to offer search engine results.
makemetop: While it does not make me sad, really, to see inktomi die, I have to agree with you that it is regrettable. My feeling is that Inktomi has behaved very badly and deserves to "die for their sins". But, I have a brain to.
And, my brain is less eager to see them die. The SEO community needs more search engines and an healthy group of different active source. The continuing devolution of the market into complete dominance and monopolization by Google are bad things for everybody. Inktomi has recently shifted and is attempting to again be a crawling engine. We need that.
BNBN (Barnes & Noble .com) has been trading around $.70 for months, and is in the same boat as INKT. Even if BNBN get's delisted I hardly think that B&N will shut down their online division.
Economy and market conditions have made it difficult for many companies trading on the NASDAQ to live up to the minimum trade value of $1.00 per share...
But INKT is in nowhere near the financial conditions of a couple of very well known Telco companies: WilTel (Williams Telecommunications - controls about 50% of the fiber optic network in the US) and WorldCom. Both are trading at approx. $.01 per share... :(
Inktomi's biggest problem concerning "us", was that they temporarily turned their back on their Web Search services business, and concentrated on Enterprise Corporate Search services...
I've always loved Inktomi's business model, in that they have never been a portal, or publicly accessible search index, and have never become competition to their own clients over the past 7 years (Hotbot, Yahoo, AOL, MSN)...
Google on the other hand, will surely lose the Yahoo deal, as Yahoo views them too much as a competitor. The only reason AOL did a deal w/ Google, is that AOL controls the entry point to the web for their subscribers, and makes it very difficult for AOL subscribers to break out of AOL controled web navigation.... If Google continues to increase in popularity, I see AOL abandoning Google also.
I'm not sure where Jeremy's statement, "No new contracts in the immediate future" comes from. I think Ink. has as good a chance of "re-landing" Yahoo, as anyone at this point. Wisenut's and Teoma don't have enough stability IMO, and I still question Yahoo getting into bed w/ FAST, although I would say FAST is probably Ink's major competitor at Yahoo...
People discuss Spammy indexes, well FAST had one of the "spammiest" indexes just a year ago.. People can spout all they want about Google and relevance, but they are just another search index, that can also be artificially influenced.
If Ink. pulls off the Yahoo deal, they will surely climb out of the "de-list" zone at NASDAQ. Timing is everything in business, and Ink. has been in the right place/right time in previous situations.
Inktomi isn't going to get the Y! deal.
Yahoo has teamed up with SBC/Pacific Bell to provide for home portal service for their DSL and dial up network. They are not going to trash the search results by providing Inktomi listings at a time when they are expanding into a captive market contract.
Instead Y! is keeping Google as a service provider, but de-emphasizing Google by removing the link and the "powered by Google" image that caused the branding effect.
As to inktomi's de-listing, I think it will happen, but I don't think it is going to happen gracefully. Before they de-list they'll do a multi share reverse split -- maybe 30 to 1. That will cause even more decline as investors lose even greater faith in the stock.
The upper management doesn't have any faith in the stock either. Take a look at:
[biz.yahoo.com...]
The management is dumping stock at every opportunity.
De-listing will not be the end of ink. They'll hang on for a while after that. What will finally do them in is when the accountants have no more room to juggle the numbers.
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What's going to do them in will be the amount of ill will they created with webmasters, the very people that they are now "serving" -- there is just too much bad blood.
I still don't think they get the relationship.
I sense a bit of personal "distaste" for INK? :)
I looked over the link to restricted/insider shareholder transactions, and other than Eric Brewer exercising some options, didn't notice the "mass" exodus "in number of shares" that you were alluding to?
On the upside for INK, they landed TI today for their Enterprise Search services.
news.moneycentral.msn.com/ticker/article.asp?Feed=BW&Date=20020916&ID=1926768&Symbol=US:INKT
Stock is up 11%, and any positive ground in the market these days is a good sign. I realize they have a long way to go..
Not sure how SBC/PacBell plays into Yahoo's decision for search providers, as they are a "regional" player, with no "national" reach. Don't live on the West coast, so not sure how much market share SBC has in California.
My money is still on Ink at Yahoo.. But then I always did like a bit of a "long shot"...
There was also news about another lawsuit against them today so actually, the news is a bit of a mixed bag.
Up 11%, that is interesting news. I wonder how well that will change the EPS (earnings per share) outlook from a loss of about 23 cents or so.
Using some basic financial calculations, doesn't that put their market capitilization at higher than their cash, even though they are losing money?
They don't own their building, I don't think their brand is worth much, and I still say their only *good* contract is with MSN.
I'm going to be upset if they dont' get delisted (unless their revenue figures rebound) by the original predicted date, though it should be much sooner.
SBC reaches South Central United States, Upper Midwest, California, Nevada and Connecticut.
My daddy always taught me, you buy things that "appreciate", and lease anything you can that "depreciates"...
Real estate usually appreciates over the long term, but in the N. California market that could be an exception to the rule, for many years to come.
Those that bought in 98-99, are going to be 'hard pressed' to break even for awhile... :)
I didn't hear that Ink was getting sued, would be interested for the "spin"....
Mike, thanks for pointing out that SBC's reach is a bit more than "one" region... The question still remains as to the market share they have in broadband services.. I think it's smart for Yahoo to partner, and wondered why they let AOL and Google get such a "head start" on them....
That's just bottom feeders coming in with hopes at making a quick buck on a bounce.
Real estate usually appreciates over the long term, but in the N. California market that could be an exception to the rule, for many years to come.Those that bought in 98-99, are going to be 'hard pressed' to break even for awhile...
redzone - This is a little off topic, but while this may be true of business property, I don't think you've seen what's been happening with housing prices here. They may start going down when interest rates get high, but so far they've been going steadily up....
SBC subsidiaries' trusted brands: SBC Southwestern Bell, SBC Ameritech, SBC Pacific Bell, SBC Nevada Bell, SBC SNET, Sterling Commerce, and Prodigy - and world-class network, SBC companies provide a full range of voice, data, networking and e-business services to address the specific needs of individual businesses and consumers. SBC is America's leading provider of high-speed DSL Internet access service, and one of the nation's leading Internet Service Providers (ISPs).
SBC companies currently have more than 60 million access lines nationwide. SBC also has a 60 percent equity interest in Cingular Wireless, its joint venture with BellSouth, which serves more than 21 million wireless customers.
Inktomi shares are down 6% today
So I'd say Littleman was right on that score...however, given what Mike pointed out about Yahoo's reach, it makes more sense to me that yes, if INK could somehow land Y!, they would again be one hot company.
However, give that their algorithm has not evolved to a level of sophistication as great as that of Teoma, WiseNut, or Google, I highly doubt that Y! would make the mistake of taking them on as a partner.
They could split the business in to manageable parts, I think that the PFI programs could support themselves if they maintained a good list of OEM web search partners (especially if they got Y!).
Call me crazy but I wouldn't disregard them just yet, when someone’s back is against the wall you can never tell what they'll do next. However, I think they might have to do some creative thinking.
That pay for inclusion stuff was never a good idea. To state that Index Connect doesn't provide an advantage in terms of rankings is not quite on the up n' up in my opinion. How stupid do they think people are?
As mentioned earlier, Ink is a search technology company. They ddn't have to worry about running a portal or any of the other stuff that a YAHOO! has to deal with. For one that is supposedly a search technology company that didn't have the distractions of all the other portal business dealings it is surprising that their search enigne is soooooooo bad.
Maybe they'll come around with this larger index but they'll never touch Google or be a real competitor in web search again. With MSN now announcing that they intend to make money now, Ink may not be there much longer.
.02
Post #1000!
Any idea when their contract is up with MSN?
should i still sign-up with inktomi?
or use the money to pre-order the "attack of the clones" dvd?
Take your money and go out to eat - at least you'll get something it...
-s-
I find it hard to believe that professional SEOs and webmasters would actually want another search provider to go bust. Google's ever-increasing dominance of the search market and the weakness of their competitors is not a good thing. Surely, we need the Inktomi's of this world, regardless of whether or not you resent paying to be included in their database.
At least with Inktomi providing results to MSN, there is some alternative to Google. And as for the relevancy of their results, there isn't that much difference between them and Google and they are a damn site better than the mess that is Lycos/Alltheweb/Fast.
