FTC Seeks Info on Search Engines
Fri Jul 12, 7:26 AM ET
By MICHAEL LIEDTKE, AP Business Writer
SAN FRANCISCO (AP) – Online search engines are built to find information in seconds. But most leading sites appear to be taking their time meeting a federal request for more transparency on how money influences their display of search results.
In late June, the Federal Trade Commission said most of the Web’s largest search engines don’t reveal enough about the financial mechanics that increasingly give advertisers preferred treatment.
The FTC delivered its findings as a recommendation but indicated it could pursue legal action if the search engines don’t build “clear and conspicuous” distinctions between fee-based results and those produced by objective formulas.
The agency did not set a timetable for compliance, which experts say is technically uncomplicated.
To gauge the search engines’ response, The Associated Press submitted a series of random queries this week.
The spot checks found few changes had been made, even though it appears all but one of the surveyed search engines will have to make revisions to meet the FTC’s guidelines.
The AP reviewed search engines at a dozen sites: Alltheweb, AOL, AltaVista, AskJeeves, Google ( news – external web site), Hotbot, Looksmart, Lycos, MSN, Overture, Netscape and Yahoo.
Google was the only search engine that appeared to meet all the criteria laid out by regulators.
That’s probably no surprise to Google’s regular users. Co-founders Larry Page and Sergey Brin have fiercely protected Google’s editorial integrity, most notably by isolating ad-driven results under the heading “sponsored links” in shade boxes at the top and sides of the main page.
The AP’s examination found all the other search engines still had some fine-tuning to do to fully address regulators’ concerns.
AltaVista changed the way it listed its ad-driven results the day after the AP asked why the Palo Alto-based company hadn’t adopted one of the FTC’s simplest recommendations.
Paid placements previously listed under the label “products and services” began showing up under AltaVista’s “sponsored matches” heading on Thursday.
The FTC’s concerns are focused on two areas.
The first is paid placements, in which result rankings are determined primarily by how much money advertisers are willing to pay to be listed under specific search terms. These listings typically are placed above search results generated using mathematical formulas that rank Web sites based on their relevance to the request.
The FTC recommends that that paid placements be shown in separate areas on the page, labeled “sponsored links” or “sponsored search listings.”
Most of the engines began to adopt language along these lines after the July 2001 complaint from a Ralph Nader ( news – web sites)-backed consumer watchdog group, Commercial Alert, that triggered the FTC’s inquiry.
In its advisory, the FTC applauded these changes but said some search engines still “may not be sufficiently clear” about their paid placements.
The FTC asked search engines to disclose more on “paid inclusion programs.” Another way money influences the rankings, this technique has a more subtle effect on search results.
To keep their information databases fresh, search engines regularly review the content on Web sites, typically by sending out automated “spiders” that crawl much of the Internet every few weeks.
Under paid inclusion programs, Web sites pay the search engines to visit them more frequently and dig deeper into their content.
Although many search engines contend paid inclusion only has a minor impact on how results are sorted, the FTC concluded that the programs could distort rankings. The FTC thus asked the search engines to provide an easily located explanation about paid inclusion and its potential impact.
It appears all the engines except Google still need to make this change. It’s not an issue for Google because its database doesn’t include entries from paid inclusion programs.
If the search engines don’t make changes on their own, federal regulators almost certainly will take harsher action, said Danny Sullivan, an industry analyst for Searchenginewatch.com.
“I don’t think the search engines can afford to take a ‘head in the sand’ approach on this,” he said.
The search engines face a balancing act as they try to comply.
Because they make money every time Web surfers click on an advertiser’s link they don’t want the additional disclosures to lessen the appeal of their paid listings.
A national Consumers Union poll of 1,500 adult Internet users taken during December and January found that 30 percent would be less likely to use search engines where advertising influences the results. Another 56 percent said advertising’s influence doesn’t matter to them.
Most of those surveyed — 60 percent — weren’t even aware search engines received money to list some sites more prominently, an increasingly common practice.
AltaVista isn’t the only search engine tinkering with its site in hopes of satisfying the FTC.
Ask Jeeves has provided an additional explanation about some of its fee-based search techniques in its “editorial guidelines for answers” section and said it planned another revision Monday to change how some advertising-driven results are listed.
“We are taking these (FTC) guidelines very seriously,” said Heather Staples, the company’s chief marketing officer.
If the search engines haven’t complied by September, Commercial Alert said it would probably will file another complaint with the regulators.
“It’s important for people to know whether or not their search results are being bought by big business,” said Gary Ruskin, the group’s executive director
