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Google Considers 'Speciality' Subscriptions
jdclucidly writes "C|Net is reporting that Google is considering moving to a subscription based service for educational and commercial entities. The new service will be a specialized spider in addition to their already popular web search." Lexis-Nexis, Google's coming for you.
If they beefed up Google Groups by adding archives before 1995, added a more powerful query mechanism (maybe regexp, even at the cost of reduced speed), and finally formatted the results in some more sensible fashion, I'd pay a fair bit per year for that. Given that I use deja (old habits die hard) many times every day, that would be worth even $100 a year for me.
Yeah, they really will have to add new content to get this to work. Hopely there is enough added value in periodicals, internal corporate materials and other sources to make it worthwhile to people.
What strikes me though is that they will have to add content which can't be available in the basic search. After all there is no reason to pay for specialty service, if what you want shows up as #3 on their free service. In this regard their technology is almost too good, and makes it hard to come up with information that isn't already available for free. I would be very disappointed if they started censoring what material was freely searchable just to put a price tag on some of it.
If you do the math, the economics of search engines just do not work out. Over the last few years the amount in dollars of CPU time required per search has remained more or less constant (yes, CPUs are faster and cheaper, but the web is growing equally as fast).
? ? ..... stay tuned.
In practice, each query to a search engine costs about 1 cent. This means the search engine has to recover 1 cent from each user per each query. What is the ongoing rate for banner ad? well, glad you ask: 1 cent for every impression. So assuming you were able to place add impressions in every single search page (which is quite unlikely) you are just breaking even, which brings us to alternative source of revenues.
All of these alternative source of revenues so far boil down to two types:
(1) charge for doing searchers
(2) charge for the listings
There are two ways to charge for doing searches: one is subscription service for users, the other is to license the search technology for third parties. A surprising discovery of the information revolution is that the value of an invidual item is incredibly low, as the editors of Salon magazine, brill's content or Slate can attest to. Therefore users are not likely to jump in and pay for searchers.
If you license the search engine to a company the same effect comes into play: most companies do not own valuable enough information to justify the cost of a search engine.
So (1) is not working how about (2)?
Charge for listings has been tried in many different ways: skewed rankings, faster and more frequent crawling, directory insertion. Skewed rankings is a non-starter as it drives users away (even so, every so often the search-engine-near-bankruptcy-du-jour goes that way).
Charging for frequent crawling works but not many companies sign for it.
So (2) didn't work either, which leaves most search engines struggling to keep afloat. Now here comes the interesting part: as the web continues to grow, the original search engine architecture starts to show its defficiencies.
Rearchitecting an entire search engine live is a major endeavour, with software and hardware costs well into the tens of millions of dollars, but we just said that the search engine company was barely keeping afloat! So they are unable to rev-up into the new generation.
The only group of people who can secure tens of millions of dollars is a startup backed by a bunch of hot shots from academia/industry lab. In comes the upstart out goes the old, monolithic giant. You can tell that story many times over just by changing the names:
Lycos--OpenText--AltaVista--Hotbot--Google--???