Back when the Web was new and finding information on the Internet was still an art, the mantra had it that “Content wants to be free.” New York-based GuruNet obliged. The company held patents on a gee-whiz software solution that queried databases and showed the answers in a pop-up window, and in 2001 it used that app to power a free online reference service. Revenue would come from selling the server to businesses for their internal data retrieval needs.
What came instead was the dot-com crash and long, deep slashes in enterprise IT budgets, driving GuruNet’s business model back to the shop. What emerged in 2002 was a plan to sell one-time licenses on the lookup software to those same consumers who had used it enthusiastically for free online. The clever pop-up window was reborn as a downloadable plug-in; point at a word and alt-click it, and a host of reference content appeared, everything from definitions and synonyms (with pronunciation sound files) to real-time stock quotes and the current time and temp in cities. GuruNet positioned itself as an “answer engine”, a speedier, more authoritative and more focused alternative to search engines such as Google, which crawl the Web algorithmically to find several million page results for a term like “DNA.”
The one-time licensing idea found some take-up, particularly among school systems. But it also had its own business problems: How do you book revenue on lifetime subscriptions until those lifetimes are up? In early 2003, it morphed again into GuruNet 4.0, a yearly subscription service. The new format got great press. But that buzz was lost amid the booming public acclaim for Google, Yahoo, Ask Jeeves and the other big search engines.
Fast forward through two years and an IPO to Jan. 3, 2005, when the service was reborn yet again as Answers.com. Searchers can type their questions naturally into a query box; they can also download the Alt-Click plug-in as a browser toolbar, letting them search for Answers.com’s rich content without leaving their current document.
What’s GuruNet’s revenue model this time around? Paid advertising—the industry created almost single-handedly by the same search engines the company strove to differentiate itself from years ago.
“Paid search is now a slam-dunk,” says GuruNet spokesman Jay Bailey. “It’s proving itself to be one of the most solid parts of today’s Internet economy. It didn’t even exist back when GuruNet first launched, but Google came along and made it very clean to provide content with paid advertising on the side. Now that it’s clear that this is not a short-term flash in the pan, we’ve decided to go this route.”
GuruNet is currently in talks to open its service up to paid advertising networks such as those of Google, Overture and Kanoodle, with large inventories of paid-placement ads that might match well with an Answers.com search. But Bailey doesn’t rule out the possibility that the site might someday book that ad revenue on its own. “We’ve gotten a lot of inbound calls about buying ads on our searches,” he says. “We tell them that right now, we’re concentrating on the service, and ads would mean building an engine to place them and hiring a sales staff. But we’re definitely in an experimental mode.”
The success of Google, Yahoo and company may have put another kind of oomph into GuruNet’s business model beyond paid-placement. The company still positions Answers.com off to the side of “Big Search”. And with competition as hot as it is among the engines—and with the major search powers layering in capabilities to search not just Web pages but media content and personal desktops—GuruNet likes its prospects to partner with them as a user-friendly utility.
“We’re not going head-to-head with Google or Yahoo,” Bailey says. “They want to index the whole Web and give back links; we give answers. We can offer them a great value-added feature to make their engines more relevant to their users.”
Bailey points to an IBM study that stated that about 49% of Web searches were looking for facts; the rest were either searches for products to buy or for Web sites. The big search engines handle the latter two expertly, he says. Asked about Queen Victoria, for example, they can serve up lists of URLs with the phrase, ranked by popularity, freshness and relevance. But the searcher still has to comb these by hand to find out about the monarch rather than the PBS TV series, the QVB shopping mall in Australia, or the Queen Victoria Inn in Cape May, NJ. (A search for her husband Prince Albert may also lead to a quick download of some parental blocking software.)
Answers.com is already partnered with one search engine: the A9 service now being tested by Amazon.com. “They called and said they were building a search engine that was like Google-plus, adding their books and music to Google’s search,” Bailey says. “They wanted to include a reference section and thought we were the company to deal with. That helps validate us.”
The deal has also tested Answers.com’s robustness, because growth-oriented Amazon wanted to be sure GuruNet’s service would stand up to heavy traffic. “They threw a lot of queries at us very quickly, trying to run us down, and we proved ourselves technically,” Bailey says. That kind of road-testing has helped Answers.com in its ongoing discussion with other potential partners. Those include an unnamed second-tier engine that wants to include Answers.com as a sticky feature on its tool bar and is offering to pay per click for the privilege.
The rise of paid advertising, the evolution of search into more than a URL finder, and fierce battles among the major engines: All these things suggest that the time is finally right for Answers.com. And that’s not to mention two more developments that had much lower profiles two years ago. One is a content resource: Wikipedia, the online encyclopedia that is maintained by its users around the world. Answers.com searches that database too, and the results can be so timely that a search on the word “tsunami” on Dec. 26 could find timelier reports from the Indian Ocean than on the cable networks.
The other innovation is more a marketing development: blogging. Even before its January launch, Answers.com was getting good word-of-Web from many of the tech blogs. And this time, GuruNet is making sure that buzz easy to find—with a link on its company Web site to a page of 15 hyperlinked blog reviews.
And that’s just a selection. “We’ve had thousands of mentions in the two weeks after our launch—twenty within three hours of the first one,” Bailey says. “It’s a phenomenon I’ve never seen at this level.”