The Portal Threat To Verticals (and How To Beat It)

    July 11, 2005

There are a lot of exciting developments in specialized search these days. Shopping search, job search, social bookmarking, classifieds, local search, and more. Quite a few startups have gained enough momentum to attract funding and followings of loyal early adopters.

The Portal Threat To Verticals (and How To Beat It)
How Do Portals Affect Verticals?

The threat to these players comes mainly from the dominant portals, Google, Yahoo, and MSN. Verticals hit a wall at a certain point in terms of their enthusiast communities. To cross the chasm into more general acceptance (as a company like Paypal or indeed Google did), they need continued exposure from the main channels where people look for stuff, or they’ll simply get bought out by one of those main channels, and get their exposure from within.

Paypal got taken out by eBay. Google was truly launched into the stratosphere by Yahoo generously allowing it to be Yahoo’s search results provider for a protracted period.

So the reliance of verticals (job search engines like and Simply Hired, for example), can reach a point of overreliance on portal exposure. If a portal player is interested in acquiring them, they can “play God” with the amount of exposure those vertical players get via organic search referrals month to month, as a reminder of who calls the shots.

After all, they can tweak results pages to send more traffic to their own internal properties, as Yahoo now does with Hotjobs (formerly an independent in its own right, acquired by Yahoo). And they can ape the innovators, as Hotjobs has just done in releasing a new “job engine” that resembles models pursued by the upstarts. Even if you want to pay for placement, Yahoo might throw up roadblocks — they can exert editorial control over which keywords are even for sale.

Local search players like face a similar challenge. Last week I talked with Roger Abbiss, Red Media’s CEO. To his way of thinking, the need to buy exposure through competitors such as Google is not a barrier so much as a predictable and controllable cost of doing business. Still, it does feel like it’s always a struggle to “get the word out” to potential users and advertisers for a vertical search property.

What does to get the word out, in part, is to call local businesses and ask them for their business, much as the Yellow Pages companies have always done. And they maintain that close personal contact and savvy understanding of those local businesses’ needs.

This approach is unorthodox in its use of time-honored sales orthodoxy. This proximity to advertisers “on the ground” may turn out to be the quiet “tortoise-vs.-hare” advantage that keeps listings services like RedToronto in business long after similar dot-com-style models have run aground due to a lack of advertiser interest and overreliance on portal traffic that can suddenly dry up or increase in cost.

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Andrew Goodman is Principal of Page Zero Media, a marketing consultancy which focuses on maximizing clients’ paid search marketing campaigns.

In 1999 Andrew co-founded, an acclaimed “guide to portals” which foresaw the rise of trends such as paid search and semantic analysis.