Battle of the internet portals

7 Oct 2004

Portals were originally meant to contain the world’s growing population of web surfers but the lines of demarcation between what constitutes a content portal and a search engine are being increasingly blurred. Why? Because search engines revived the flagging online advertising sector through the introduction of sponsored searches online whereby a internet surfer searching a topic would trigger a process of targeted advertising.

The result is a growing, bitter feud between players such as search engine Google and content portal Yahoo! for the hearts and pockets of the world’s online population through this new battlefield of sponsored searches.

Microsoft’s network of MSN portals is striving to muscle in on this important market, making prudent use of its massive Hotmail email user base to push targeted advertising.

Dublin has become home to this new flux of search-driven advertising. Last year, Google came to Ireland with plans to create 200 jobs at its EMEA HQ in Dublin within three years. Yesterday, Google’s founders, Sergey Brin and Larry Page, were in Dublin to open the new operation.

Over the past year it has been developing its content search services to tally in with the sponsored search element of the online advertising business. As the purveyor of Adwords, Google has become a formidable competitor in the sponsored search space.

After three steady years of marked decline, the online advertising business is understood to be projecting major growth this year.

A spokesman for Google in Ireland told that Google’s Dublin operation currently employs 150 people, well ahead of target. “In terms of what’s happening here, a good number of the jobs are actually in the Adwords division, mostly sales and marketing, which controls the sponsored search operation, with the remainder of the jobs covering human resources, legal and finance.”

The spokesman said that the environment is perfect for such competition. “Competition is healthy; we wouldn’t be overly concerned. We’ve had a local Irish portal live for some two years now. Internationally, Google handles some 200 million search queries everyday and our index covers some 4.2 billion webpages and more than four billion documents.”

Last Friday, Microsoft entered the fray with the introduction of a locally dedicated portal and signed a number of key content partnerships with well-known Irish brands including RTÉ, Esat BT, IFG, VHI and Golden Pages. MSN plans to target local advertising for Ireland’s 500,000 Hotmail users as well as a base of existing MSN users.

Geoff Sutton, MSN’s general manager for northern Europe, said that the company has ambitious plans for its search engine technology. “The internet is becoming more central to the way that people live their lives. It’s a whole social network. Some 96pc of MSN’s revenues come through our content partners and essentially, through MSN and Hotmail, we ride on the coattails of what people spend their time doing online. Our aim is to become the best search engine on the planet,” Sutton said.

It is understood that MSN has forged a partnership with local online marketing and customer acquisition player Red Sky to boost local advertising for the new portal.

Dublin-based Red Sky recently signed a similar deal with AIB to enable the bank’s business banking division to more effectively attract and keep customers through the online medium, using a melding of online advertising, analysis, business intelligence and customer relationship management technologies.

“In terms of online advertising, we estimate that the net will take 15pc of global media minutes by 2007. The internet advertising market will triple over the next three years and will be worth €4bn by 2008,” Sutton said.

The competition for internet users will increase in complexity over the coming years as players Yahoo!, Google and MSN work hard to develop additional features to keep web surfers loyal to their various engines.

For example, a new comtest for email provision erupted this year when Google introduced a 1GB email service that dwarfs traditional 5MB offerings from Yahoo! and Hotmail. Yahoo! last year acquired digital music service Musicmatch for US$160m and plans to launch a music service to rival MSN and iTunes, and plans are afoot to integrate music into Yahoo!’s popular instant messaging software.

Microsoft, which employs 50 people in Dublin engaged in research and development for its MSN portal, has publicly acknowledged similar interests in tying its MSN Music online store into MSN Messenger. Adding fuel to the fire, Yahoo! in the US has launched Yahoo! Local, part of a move to give web surfers more comprehensive local search results, aping MSN’s localised service across the globe.

In this heightened search for surfers’ cash, Ireland has a unique opportunity to play centre stage.

By John Kennedy

Pictured at the launch of MSN’s Irish portal were: Geoff Sutton, general manager of MSN for northern Europe, and Joe Macri, general manager, Microsoft Ireland.