Yahoo! charged with blocking rivals

About.com's Scott Kurnit says Yahoo! plays favourites in its search engine results, and that the Net should be open

Dotcoms claim the Internet pie is big enough for all comers to get a piece. So why are some of the business-to-business (B2B) and vertical-content sites playing unfairly by blocking access to their competitors' content and cutting exclusive deals?

Participants in two different Silicon Alley 2000 forums asked those questions on Tuesday afternoon. Silicon Alley 2000 is the fourth annual Rising Tide Studio conference that focusses on the New York City-area Internet community.

Scott Kurnit, chief executive, chairman and founder of About.com, raised the issue of what constitutes a level playing field during a "fireside chat" on Tuesday. Kurnit told show attendees that Yahoo! decided against including About.com sites in its search engine results, even though it provides "thousands" of links to Yahoo sites from its various properties.

"Yahoo! refuses to list most of our sites in their search results," Kurnit claimed. When asked whether he had approached Yahoo! about this problem, Kurnit said the company's response was, "It's my network."

"Maybe we should take out an ad in the Wall Street Journal telling people that their [Yahoo!'s] search engine results are corrupt if they don't list About.com sites within the top 10 results on most queries," Kurnit told the audience.

He noted that About.com hasn't had these kinds of problems with America Online (AOL). "We've never paid AOL a nickel, but 30 percent of our traffic comes from them," Kurnit noted. "It's an open system. If you can create an open system, you can compete anywhere."

About.com is a "network of sites" led by 700 expert guides in 20 countries. It provides content on a wide variety of topics -- ranging from food and drink to teens and travel. The company is contemplating spinning off its industry subsites as a separate unit and/or tracking stock, Kurnit said.

The neutrality question emerged as a key theme in a B2B panel held on Tuesday afternoon at the Silicon Alley conference. Panel moderator Edward McCabe, vice president of Internet research for Merrill Lynch, asked participants about the impact of exclusive vendor deals on their B2B businesses. All of the participants spoke out in varying degrees against these kinds of deals.

"If you refuse to provide the buyer with access to [competitors'] information and tools, buyers will find out," noted Mark Walsh, president and chief executive of VerticalNet, a B2B exchange site comprising 56 communities in a wide variety of industries. But Walsh added that, "it's about neutrality of information. Neutrality of ownership is not the issue." Walsh noted that VerticalNet is close to spinning out one of its sites and selling it to a manufacturer, a deal he claimed won't impact its neutrality.

B2B marketplace vendor Chemdex -- recently renamed Ventro -- expressed less reticence about exclusive partnerships. "Neutrality is a continuum," Ventro president and chief executive, David Perry, told the audience.

Ventro has tight alliances with a number of vendors, including IBM Global Services, SAP and the Sun/Netscape alliance. "We're not completely neutral," Perry acknowledged, "but we're neutral enough to get the critical mass to attract others [to our exchange]."

Michael Levin, chairman and chief executive of e-Steel, a B2B exchange that links steel industry players, was even more pragmatic. With Internet time compressing how long companies have to make good on their business plans, "the first thing to go out the window is neutrality," Levin said. "You can't throw it out all together. You need [business] exchange rules to be transparent," he added.

But Levin noted that e-Steel is allowing some vendors to invest in his company in order to guarantee their participation in its market place. He said the key to maintaining some degree of neutrality is to keep vendor investment at a minority level.

The Silicon Alley 2000 conference continues through to Thursday.

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