Type "snowboard." Hit "enter." Read page.
Is that an advertisement or a contextual link? Does it even matter? Those are a couple of interesting questions raised by a recent report from the Pew Internet and American Life Project.
According to the survey results, only 38% of Internet users were aware of the difference between paid and unpaid results, while only one in six Internet users said they could tell the difference between a simple search result and a paid advertisement. At the same time, half of them said they'd stop using engines if they thought the search providers weren't being clear enough in differentiating between the two.
Talk about split personalities. I can understand the confusion for any users of AskJeeves (NASDAQ:ASKJ). Until I hit the scroll wheel, the entire results page is shilling paid links when I searched on the word "snowboard." But apparently, relegating paid results to a colored top banner and the right side of the page under the word "sponsor" isn't clue enough for most of our compatriots. This is the layout used by major players such as Google (NASDAQ:GOOG), Microsoft's (NASDAQ:MSFT) MSN search, and Yahoo! (NASDAQ:YHOO).
Let's try not to savor the irony that I found this report via Microsoft's MSN.com portal, a page that does all it can to mix advertisements in with news headlines. Instead, let's try to figure out what this means for investors. My guess: Maybe more green. Maybe not.
Confusion between paid and unpaid links might lead to more clicks for advertisers, but it won't necessarily lead to the revenue-capturing next steps that are the ultimate goal of these links. If paying search customers don't get enough bang for their per-click buck, you can bet they'll rebel. There are still several players to pick from, and the barriers to entry for an hypothetical upstart with crazy ideas, while significant, aren't insurmountable.
In the meantime, none of this seems to be trimming the good times at paid-search powerhouses. Both Google and Yahoo! have been flying on unexpected strength in search bucks. In the end, the only moral of the Pew survey's story may be that we like to complain about being tricked a lot more than we mind being tricked.
For related Foolishness:
- Stop cheering for a second, and question Yahoo!'s quarter.
- Get a look at the whole search scene.
- Think keyword dollars aren't important? Then you haven't been watching the desktop search wars.
Seth Jayson used to think paid search meant renting a bloodhound. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.
