5 ms·

How Bill Gross’ GoTo.com inspired the AdWords business model

46 points by rpm4321 13y ago

brianbreslin 13y ago
GoTo was just one of a slew of companies that came out of Bill Gross' idealab. Bill was truly a fundamental character in the first dotcom era despite not getting as mainstream coverage as some of his peers did (though don't get me wrong, he got plenty of press). The nuances in this article that the Googlers claim were fundamental inferiorities of GoTo I think are negligible as they would have just had to tweak their bidding system and it would have been comparable to Google's. Does anyone know what percentage Yahoo got of Google from the patent licensing deal in 2004?
- epc 13y ago
  Uncertain about the percentage, here’s the relevant quote from the SEC filing: As part of the settlement, Overture will dismiss its patent lawsuit against us and has granted us a fully- paid, perpetual license to the patent that was the subject of the lawsuit and several related patent applications held by Overture. The parties also mutually released any claims against each other concerning the warrant dispute. In connection with the settlement of these two disputes, we issued to Yahoo 2,700,000 shares of Class A common stock." From: http://www.secinfo.com/d14D5a.144az.htm http://www.secinfo.com/d14D5a.144az.htm via http://www.techuser.net/gcoverup.html http://www.techuser.net/gcoverup.html
magikbum 13y ago
"In their seminal 1998 academic paper introducing the idea of Google, Page and Brin criticized advertising-funded search engines as “inherently biased towards the advertisers and away from the needs of consumers.”" -- The times have changed.
- vdaniuk 13y ago
  Weren't they talking about the search engines that allowed to buy organic placements in the results?
  - judk 13y ago
    Yes, but it is fun to trot out that old canard that Google was anti-ads, when really they were anti-unethical secret ads. But there are some shades of Google leaning back that way, with "monitor-yellow" backgrounds, closing access to retail product search indexing, etc
- larrys 13y ago
  The whole idea of why the print yellow pages was good was that it was biased toward people who believed enough in what they were selling to pay for an ad to sell the product or service. [1] Everyone gets a free listing but if you want (typically) additional headings and (definitely) a big or bigger display ad you pay. As a result if you are a general contractor that does kitchens and bathrooms and also sells plumbing fixtures as well you would have to spend the money to be listed in ads in all those categories. Without having to spend money it ends up being confusing for consumers because it's like craigslist and inevitably results in people not being able to find what they want. The "advertising funded" is actually a benefit not a detriment. [1] I used the yellow pages to build a business from scratch that I actually sold. At the time I started I had no employees and there were established competitors (that didn't advertise) that did the exact same thing. The advertising is what made the business pretty much (in addition to price, quality service and all of that).
  - cousin_it 13y ago
    > The whole idea of why the print yellow pages was good was that it was biased toward people who believed enough in what they were selling to pay for an ad to sell the product or service. Note that this benefit disappears online, because of targeting. If you see an ad in print, you know the company had enough money to put that ad in front of thousands of people. If you see an ad online, it might have been targeted precisely to you, so the company might well be a scam. I wonder if there's a business idea in making online advertising into a more costly/believable signal.
  - bsullivan01 13y ago
    wrong comparison Larry. Now a few entrenched players (not always the best choice or cheapest) can outbid you and hide your ads AND free listing. Not many people scroll down and on top is all ads. Small business is going broke thanks to Google, as Google's earnings keep going up. Without having to spend money it ends up being confusing for consumers because it's like craigslist and inevitably results in people not being able to find what they want. So Google without ads, when it first started, was worse than other search engines? Nope. The advertiser that bids the highest might not be the best option for the user at all
EGreg 13y ago
I find myself wondering whether it would have been good for GoTo.com to have patented its system. Business method patents were around back then, I think. I have a lot of respect for Bill Gross and all his various IdeaLab ventures. But it strikes me that how a story is told affects your viewpoint. I would probably still say the patents would have hurt the public more than they would have helped.
- larrys 13y ago
  "I find myself wondering whether it would have been good for GoTo.com to have patented its system." At the very least it would have provided more incentive for google to buy goto rather than develop a competitor (regardless of even the validity of the patent because of essentially fud.)
- dorfsmay 13y ago
  Has the patent on pagerank hurt the public?
  - EGreg 13y ago
    I don't know

46 points by rpm4321 13y ago

GoTo was just one of a slew of companies that came out of Bill Gross' idealab. Bill was truly a fundamental character in the first dotcom era despite not getting as mainstream coverage as some of his peers did (though don't get me wrong, he got plenty of press). The nuances in this article that the Googlers claim were fundamental inferiorities of GoTo I think are negligible as they would have just had to tweak their bidding system and it would have been comparable to Google's. Does anyone know what percentage Yahoo got of Google from the patent licensing deal in 2004?

epc 13y ago
Uncertain about the percentage, here’s the relevant quote from the SEC filing: As part of the settlement, Overture will dismiss its patent lawsuit against us and has granted us a fully- paid, perpetual license to the patent that was the subject of the lawsuit and several related patent applications held by Overture. The parties also mutually released any claims against each other concerning the warrant dispute. In connection with the settlement of these two disputes, we issued to Yahoo 2,700,000 shares of Class A common stock." From: http://www.secinfo.com/d14D5a.144az.htm http://www.secinfo.com/d14D5a.144az.htm via http://www.techuser.net/gcoverup.html http://www.techuser.net/gcoverup.html

magikbum 13y ago

"In their seminal 1998 academic paper introducing the idea of Google, Page and Brin criticized advertising-funded search engines as “inherently biased towards the advertisers and away from the needs of consumers.”" -- The times have changed.

vdaniuk 13y ago
Weren't they talking about the search engines that allowed to buy organic placements in the results?
- judk 13y ago
  Yes, but it is fun to trot out that old canard that Google was anti-ads, when really they were anti-unethical secret ads. But there are some shades of Google leaning back that way, with "monitor-yellow" backgrounds, closing access to retail product search indexing, etc
larrys 13y ago
The whole idea of why the print yellow pages was good was that it was biased toward people who believed enough in what they were selling to pay for an ad to sell the product or service. [1] Everyone gets a free listing but if you want (typically) additional headings and (definitely) a big or bigger display ad you pay. As a result if you are a general contractor that does kitchens and bathrooms and also sells plumbing fixtures as well you would have to spend the money to be listed in ads in all those categories. Without having to spend money it ends up being confusing for consumers because it's like craigslist and inevitably results in people not being able to find what they want. The "advertising funded" is actually a benefit not a detriment. [1] I used the yellow pages to build a business from scratch that I actually sold. At the time I started I had no employees and there were established competitors (that didn't advertise) that did the exact same thing. The advertising is what made the business pretty much (in addition to price, quality service and all of that).
- cousin_it 13y ago
  > The whole idea of why the print yellow pages was good was that it was biased toward people who believed enough in what they were selling to pay for an ad to sell the product or service. Note that this benefit disappears online, because of targeting. If you see an ad in print, you know the company had enough money to put that ad in front of thousands of people. If you see an ad online, it might have been targeted precisely to you, so the company might well be a scam. I wonder if there's a business idea in making online advertising into a more costly/believable signal.
- bsullivan01 13y ago
  wrong comparison Larry. Now a few entrenched players (not always the best choice or cheapest) can outbid you and hide your ads AND free listing. Not many people scroll down and on top is all ads. Small business is going broke thanks to Google, as Google's earnings keep going up. Without having to spend money it ends up being confusing for consumers because it's like craigslist and inevitably results in people not being able to find what they want. So Google without ads, when it first started, was worse than other search engines? Nope. The advertiser that bids the highest might not be the best option for the user at all

EGreg 13y ago

I find myself wondering whether it would have been good for GoTo.com to have patented its system. Business method patents were around back then, I think. I have a lot of respect for Bill Gross and all his various IdeaLab ventures. But it strikes me that how a story is told affects your viewpoint. I would probably still say the patents would have hurt the public more than they would have helped.

larrys 13y ago
"I find myself wondering whether it would have been good for GoTo.com to have patented its system." At the very least it would have provided more incentive for google to buy goto rather than develop a competitor (regardless of even the validity of the patent because of essentially fud.)
dorfsmay 13y ago
Has the patent on pagerank hurt the public?
- EGreg 13y ago
  I don't know