nearly a decade ago when serial entrepreneur Bill
Gross proposed an online search engine that ranked results
based on how much advertisers were willing to pay to have
their links tied to specific requests.
But the concept
developed into a revolutionary idea that turned Internet
search engines into massive moneymaking machines.
Now Gross hopes
to shake things up again with Snap.com, which is providing
another commercial twist on search engines while also
promising to deliver more useful results than industry
leaders Google Inc and Yahoo Inc.
"We feel there
is so much more innovation that can take place in search,"
"It's hard to
say that little Snap will ever beat Google, but I think
we can become a viable alternative."
As Snap gears
up to shift out of test phase, the search engine's
parent company - Pasadena-based Perfect Market Technologies
Inc. - has raised $US10 million ($A13.29 million) in a
venture capital round led by Mayfield, a Menlo Park firm.
Gross and Snap CEO
Tom McGovern intend to use some of that money to spread
the word about a system that he believes can deliver better
value for advertisers.
and other search engines make money by distributing
sponsored Web links that are tied to a search query or
the content displayed on a page.
Advertisers pay commissions
whenever the commercial links are clicked on, even if
the traffic doesn't result in a sale.
this "pay-per-click" approach at GoTo.com,
which later changed its name to Overture Services before
Yahoo bought it for $US1.7 billion ($A2.26 billion) in
2003. Google introduced its own pay-per-click model, known
as AdWords, in 2002.
As it has emerged
into a highly effective marketing tool, the pay-per-click
system has spawned more mischief, too.
for a competitive advantage, some advertisers have repeatedly
clicked on a rival's link in an attempt to drain their
Other rogue Web sites
belonging to the ad networks maliciously click on commercial
links to generate more commissions for themselves.
The estimates on
the prevalence of so-called "click fraud" vary
Critics of the
system say 10 per cent to 20 per cent of the clicks
are bogus - done by a person or automated program with
no intention of buying something. Others say incidents
of fraud are vastly overblown.
Gross is among those
who believe click fraud is a big problem. He aims to change
things with a "cost per action" system that
only charges ad commission when a purchase is completed.
"I believe the
commercial side of search will evolve toward cost-per-action
in the next five to 10 years," Gross said.
Snap faces a long
Google handled 1.8 billion U.S. search requests last
month, giving it a 36.9 percent share of the market, according
to comScore Networks.
Yahoo ranked second with 1.5 billion US searches,
or 30.4 per cent of the market.
As of Monday,
Snap had processed just 16.4 million search requests since
its site debuted nine months ago.
entrepreneurs also are trying to improve upon ideas they
conceived years ago.
For example, the
co-founders of online price and shopping comparison site
MySimon.com are taking another stab at the niche.
Michael Yang and
Yeogirl Yun recently raised $US7.2 million ($A9.57
million) in venture capital to back Become.com, a search
engine that pulls together product reviews and prices.
of innovation helped separate Snap from other startups
trying to elbow their way into the search engine industry,
said Allen Morgan, Mayfield's managing director.
"It's kind of
like the Big Bang is happening right now," Morgan
market is exploding infinitely and in all directions.
We feel like it's opening a pretty interesting opportunity
for a company like Snap."
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