When Thomas Publishing elected last August to put the plug on ThomasB2B, its business-supply directory joint venture with FindWhat (now Miva), the three top executives at the project were left holding onto their vision of what an online directory for businesses could be. That notion wasn’t exactly the one Thomas had been shooting for, but Dan Savage, Michael Doyle and Dennis Jones thought it was time to put it to a real-world test.
Now SourceTool.com has been up and running for about five months, and the real world’s verdict is in: You can operate a business directory that doesn’t sell its own ads and relies on businesses to do a lot of the heavy lifting in matters of taxonomy and categorization—the things that are necessary for SourceTool’s algorithm to find what searchers are looking for.
“We had a lot of confidence in what we were trying to do [with Thomas BSB],” says Savage, now the CEO of TradeComet, the company formed to manage SourceTool. “So when Thomas made the decision not to execute the plan—for whatever reason—we thought it was still a good plan, and we’re continuing to execute it.” Doyle and Jones are on board the new company too, Doyle as vice president for strategic alliances and business development and Jones as vice president of product development.
Other B-to-B search engines are built on what’s known as a parametric search model; users enter a few criteria—“electric motors that use this voltage, produce this amount of torque and this horsepower” and then get a list of products from different manufacturers filling those requirements. SourceTool has approached the B-to-B market in a different way.
“There are 30 million global business establishments whose products we aim to classify,” Savage says. Building an index that could apply a parametric search to all those businesses could take lifetimes. ThomasB2B had relied on the content of the Thomas Business Directory, but that directory data required a large editorial staff to maintain and format the information. But even that resource was restricted to U.S. businesses and wasn’t complete.
Instead, SourceTool relies on the United Nations Standard Products and Services Code (UNSPSC), a standardized system for classifying products and services created eight years ago by the U.N. Development Program and Dun & Bradstreet Corp. The UNSPSC was intended to speed the process of procurement through e-commerce by setting up an index for everything businesses around the world make or do. Listed businesses are encouraged to classify the products on their Web pages to conform to the 59 categories of supplier businesses, 400 or 500 families, 2,000 classes and 20,000 commodities and business functions. The code is available in 10 languages other than English, so it’s designed to grease global commerce.
Right now, only about 5% of the 2 million companies listed in SourceTool have applied the UNSPSC taxonomy to their goods and services, so rolling the standard through the directory will be the work of a few years, Savage says. But polls have shown that 15% of SourceTool’s listed companies are aware of the system, and he’s confident that procurement pressures from big global manufacturers like Boeing will drive at least the largest suppliers to comply.
In the mean time, SourceTool uses software bots to spider the Web and locate businesses that should be in the directory; it also licenses business-directory data from other publishing sources. Those businesses can then apply for a free listing by filling out a form online. Those applications are checked over by human editors to make sure that the businesses are legitimate, with physical addresses that can be contacted, and that the descriptions in their applications are grammatical.
It’s an interesting application of the open-source model to vertical search, and one that relies on consumer-generated content in much the same way that a photo-sharing site such as Flickr does.
“Our mentors in the Internet business are Google and Craig Newmark [founder of Craigslist],” Savage says. “Both those organizations have really solidified the importance of open source—that you can build things that the world can benefit from without getting proprietary about your product. In our case, that requires the active participation of the community of business that want to sell to other businesses around the world.”
SourceTool user enter a search term in the query box and see a list of suppliers relevant to that keyword, ranked in what SourceTool’s algorithm deems the order of importance. The listings themselves are bare bones: just the company name, a passage of description that the company has provided about its business, a link to the company’s Web site, and some suggested related search keywords.
Most SourceTool users are willing to go to the supplier Web site and look at the products directly, Savage says; they simply need help locating the URLs of companies producing the parts or offering the services. “That was one of the biggest complaints at ThomasB2B, that it didn’t list URLs,” he says. “It didn’t because Thomas didn’t compile them.”
Eventually, Savage says, SourceTool will include more data in those search results, including addresses, phone numbers, primary contacts with e-mail addresses, and he hopes even a list of trade references, companies the supplier has done business with who can be contacted for customer evaluations.
Users also see a set of relevant pay-per-click ads at the top of the results page, and therein lies the other different direction Savage and his team too their vision in. SourceTool doesn’t sell its own ads but is part of Google’s AdSense network, earning commissions from each clickthrough and doing quite well at it, he says.
That’s different from the ThomasB2B business model, where the directory intended from the start to generate its own ad revenue. “Thomas was very interested in building an advertising network, because they had this great outside sales force,” Savage points out. But without dedicated salespeople in the field, the idea of building your own ad network doesn’t make a lot of sense. SourceTool signed on with Google, and is perfectly willing to become part of the publisher networks for Yahoo! and MSN too.
Savage says he wasn’t always convinced that joining someone else’s ad network was a path to long-term viability. “But we’ve become believers that Google, Yahoo! and Microsoft are serious about being partners with publishers and providing a ready-made mix of advertising that can be substituted for what we used to hire a lot people to do,” he says. “Everyone on our team grew up selling advertising, so the idea of giving up this activity is new to us. But advertising is a big part of Google’s revenue, and I’m convinced they’re very vested in the idea of having a bunch of publishers in their network and helping them succeed.”