July 30th, 2001
Search Me, Please
By Margaret Mannix
U.S. News & World Report
Want to earn money at home? Web surfers who keyed in the term “work at home” on seven major search engines recently discovered that the same answer popped up first: www .homemailerteam.com. The site, belonging to SMW Direct of White Rock, S.C., promises that anyone can make upward of $ 100 a week by, yes, stuffing envelopes. There’s a fee, of course, to learn the trade. Those who fork over $ 35 receive a handy flier instructing them to place ads in newspapers ("Earn thousands working at home. Rush $ 2") to solicit new customers for SMW. The practice has earned SMW Direct an unsatisfactory rating by the Better Business Bureau, which has asked law enforcement to investigate the company.
How did SMW Direct get such lofty billing? Simple. It paid for it. A growing number of search engines, plagued by an advertising recession the past year, are letting Web site owners pay for prominent placement on search pages. It’s as if your local librarian were getting paid by publishers to steer readers toward their books. “It’s become possible, for the first time, to actually pay your way to the top of the listings at the major search engines,” says Danny Sullivan, editor of SearchEngineWatch.com, a Web site that tracks the industry.
Trust me. This blurring of the murky line between editorial judgment and advertising on the Internet prompted consumer watchdog Commercial Alert, a group founded by Ralph Nader, to file a complaint last week with the Federal Trade Commission accusing eight search engines--including AltaVista, AOL Time Warner, LookSmart, and Lycos--of violating deceptive-practices law. “Search engines now play a central role in the quest for learning and knowledge in our society,” says Gary Ruskin, executive director of the group. “If they are being skewed by commercialism, then the public ought to know.” And buyers beware: Among those paying for top spots are purveyors of questionable products and services--from diploma mills to bogus business opportunities.
It can be a jolt to learn that search sites, which were created to point surfers in the right direction, now give prominent space to outfits that don’t pass muster with the Better Business Bureau. Yet few portals screen the companies they spotlight. “Everyone would love to provide more and better information to users, but that has to be balanced against the economic realities this industry faces,” says Ted Meisel, president and CEO of GoTo.com, the pioneering pay-for-placement site. “It’s a choice about providing this information or no information.” That’s a phony dilemma, say critics. “It’s a disservice to consumers who come to your site to needlessly expose them to those kinds of frauds,” says Susan Grant, director of Internet Fraud Watch, a project of the National Consumers League.
What to do? Banning pay for placement isn’t an option. The practice is really just a high-tech version of the classifieds, after all, and hucksters have been reaching the unwitting through well-placed newspaper and television ads for years. But on the Internet, with ads morphing from banners to pop-ups and now to searches, novices don’t always know what’s what. So Nader’s group and others want portal sites to make plain whether the findings of a search have been bought or not.
Featured presentation. The current landscape is a hodgepodge. It’s clear enough that listings at GoTo.com have all been paid for. Trouble is, GoTo provides its results to many of the other big search engines, which may not reveal how they were obtained. That’s how SMW Direct won its towering position.
Then there are the semantic games that portals play, which only add to consumer confusion. GoTo, at least, reveals how much SMW Direct pays to lead the pack. Other portals don’t. On Lycos, SMW Direct falls under the heading “featured listings.” But Lycos fails to define “featured listings” or disclose that sites pay for that upper rung. Lycos makes no apologies. Says spokesperson Brian Payea: “A lot of these paid ads have great relevance to what the users are searching for.” In contrast, Yahoo! (which wasn’t targeted in the Nader complaint) features “sponsored” sites that are listed separately in a yellow box and clearly explains what sponsored means. However, Yahoo! makes no effort to verify the claims of those sponsors.
To avoid confusion--and perhaps potential liability down the road--some legal experts argue that portals would do well to abandon labels such as “featured” or “sponsored” and just cut to the chase. “I would say ‘paid,’ “ says Walter Effross, a law professor and director of the electronic commerce program at American University’s Washington College of Law. “Be very clear with people what’s going on here.” Or direct them to the library.