Let’s go burn $100 million. According to Read Write Web that’s what Ask.com is planning on doing this summer. “Our business plan is to take a chunk of Google’s market share!” While this isn’t a direct quote, be wary of anyone that says anything resembling such a statement. If ask is intending to take any chunk out of Google’s pocket they better provide a service that is exponentially better or not in direct competition of Google. While Ask.com has been able to obtain over 1% of the search market, they have been having serious difficulties trying to expand their market share. If you were a large investor with hundreds of millions of dollars to invest, would you be betting on a Google competitor or would you look for alternative businesses that have less dominant competitors? Pretty simple answer there.
Rather than investing in R&D, Ask.com is practically throwing $100 million out the window at a one time marketing blitz. While such a blitz may temporarily drive a marginal amount of traffic (in relative terms) in their direction, it most likely won’t have much of an impact at all. Additionally, if you are going to invest that much money in driving people to your site, you should make sure that your search results are good. From my experience their results are much worse compared to Google (although all of my tests have been self-interested queries). How about Ask.com buys out Facebook for 8 billion dollars? Wait they don’t have 8 billion dollars. Well, while I don’t have a solution for Ask.com, but Josh Catone has a few suggestions including:
- Creating transparency within a their upcoming publisher network that will compete with Google’s Adsense - This is a great point. Currently Google doesn’t let publishers know how much they are sharing on a per click basis. The only problem with this idea though is Google could simply choose to increase their transparency to knock any potential competitors out of the market.
- Stop click fraud - This is going to be a difficult one. Considering Google’s click fraud costs them over $1 billion a year I’d be willing to bet they are investing a significant amount on stopping it.
- Get top publishers - If you control the top publishers than you will attract top advertisers. Nothing new here. The only problem though is companies like Google, Microsoft, and Yahoo have much greater leverage than Ask.com. They will have to offer some serious advantages to make their position convincing to any top publisher.
I hate to be pessimistic, but Ask.com is going to have to come up with a better business plan than the existing one. Trying to compete head on with the industry giants is not a great strategy. Best of luck to Ask, but in my own opinion they are tossing their money down the tube.