US Report: GeoCities looks for revenue in searches

GeoCities' latest strategy for gathering revenues comes from an old Internet standby: The search engine. The company, which hosts over 22 million Web pages created by about 2.5 million users, announced Monday it will offer a new search engine based on technology from Inktomi Corp.

GeoCities says the new tool -- which is primarily for searching GeoCities itself, not the Internet -- will offer some technical improvements over its previous arrangement with Lycos Inc. But the deal also stands to add to the hosting company's bottom line. "It's a way for us to have better search capability, and there's also a bottom line reason -- to sell more advertising," said GeoCities president, Thomas R. Evans. "It's another way to broaden the advertising base and the monetisable traffic on the site."

GeoCities already sold ads on the rest of its site, including banner ads that pop up over users' home pages, but the Lycos deal did not allow it to take advantage of the lucrative search results page ad market. Advertisers pay top price to have their commercial appear when the user searches for a particular word, because they presumably know something about what that person is interested in."Certain keywords are always in a sold-out condition on search pages, like 'computers' and 'sex' sell out quickly, so there's a desire for more inventory in that area," said Barry Parr, director of consumer Internet for International Data Corp. "People are looking for a particular thing, and a place to go, so it's a real opportunity to grab folks."

GeoCities insists, however, that it is not trying to get into the search engine business, where it would have to compete with the likes of Yahoo! Inc. and even Microsoft Corp. "We are a customer-driven company," said Bruce Zanca, GeoCities' vice president of communications. "We are aiming to be able to provide our consumers, who are the 2.5 million homesteaders on our site, and the people who navigate [the Web pages], with the best possible experience. We believe this is the first time the site has been accurately and fully indexed."Under the agreement, GeoCities pays Inktomi a fee for each search inquiry, while GeoCities pockets the advertising revenue.

Observers said the search-page revenue alone will not be enough to sustain GeoCities, which, despite a recent public offering of stock, has yet to prove that a company based on giving away free home pages can make money. The deal is the latest partnership between Inktomi and a major presence in the online world. The company, which also provides buffering technology for speeding up the Web, provides searches for such companies as Microsoft Corp., Yahoo! and Wired Digital.

"Search is becoming more of a commodity on the Web, and Inktomi is becoming the search technology for a lot of big sites," said Parr. "They've been pretty aggressive."