With global e-commerce revenue expected to approach US$2 trillion this year, it is hardly surprising that online stores are investing heavily in technologies that can convince potential customers to become repeat clients. Search engines are one such "killer" technology because they play a crucial role in customer satisfaction, according to industry executives. In fact, search is so important that Amazon.com has invested nearly $1 billion in developing A9.com, a Palo Alto, California-based company Amazon.com formed in October 2003 and launched in beta form Thursday.

Amazon launched the new company to develop e-commerce search technology -- to give it both to Amazon.com and other licensed sites. More and more companies want to partner with A9 to take advantage of this technology. At stake is the $82.9 billion expected to be spent online this year in the United States alone. By 2006, U.S. e-commerce revenue could hit $130.3 billion. Meanwhile, spending on customer-facing e-commerce technology will increase 4.8 percent. Some of those initiatives will focus on bettering the customer experience by improving usability and self-service. Others doubtless will focus on search.

We are very passionate about only doing things -- when our brand's at stake -- that are high-end, high-quality. We want ours to come across as a phenomenal brand at all times. In general, the search [engine] dramatically improves our goal for what the consumer's experience has to be. Atomz customizes its hosted search solution to meet individual clients' needs.

Every company is as different as the products they sell. The primary customization we do is working with the client on best practices. When we pull it all together, we work with them cooperatively to do good work.

Build To Order

Customization is crucial, to a search engine specializing in marketing and promoting retailers on the Web. We definitely prefer custom search solutions to be placed on sites. It has been our experience that licensed search software does not do exactly what we need to convert the traffic at the highest rate. It is not to say that the solution does not exist. It is helpful to have custom programming in place that responds to the specific needs of each client.

Indeed, search engines can differentiate competitors -- and e-commerce operators are aware of this, Chris Mann of IBM WebSphere Commerce product marketing told the E-Commerce Times. "They're putting dollars on the table," he said. "Its [value] is proven, and it's very consistent as you look from business case to business case."

For example, Gore's investment in Atomz paid for itself within a year, according to Zohlmann. "We would have been happy if it paid for itself in two or three years," he said. There are cases where e-tailers see increased conversion rates of around 20 percent, Mann noted. Also, as a result of quality search capabilities, order size can increase by 18 to 28 percent. Although WebSphere Commerce works well with offerings from business partners Atomz, Endeca and EasyAsk, it includes guided-sell and parametric-search capabilities that many IBM clients use.

Use It or Lose It?

Anxious e-commerce execs need not look too far ahead to reach the next level of search-engine capabilities. Indeed, most sites do not fully use the capabilities of their existing software, according to Mann.

"I expect customers, in the next lifecycle, will make sure they're actually using these capabilities," he said. Today, for example, site operators can tap into guided navigation, thesaurus, merchandise tactics, dynamic navigation and personalization. "There's an increasing amount of control these guys are giving to business users," Mann noted.

For her part, Thieme said: "I think we'll continue to see improvements in data integration software as so many retailers need their brick-and-mortar store data to match what's on their Web site, and vice versa. The only improvement we hope to see with content management systems and their Web integration is the need for search engine-friendly URLs.

Just six months after establishing a Silicon Valley spinoff to develop a search product, Amazon.com (Nasdaq: AMZN) has launched A9.com, a tool that allows users to scour both the Amazon store and the Web for products and information. Eventually, it will let users search other merchants' sites as well, according to the company. The A9 site, with a stripped-down homepage that bears the familiar Amazon swoosh, began operating in beta form Wednesday, powered by Web search results from Google.

The site offers several features intended to set it apart from the competition, including the ability for registered users of Amazon to search the inside text of books listed for sale on Amazon.com and the ability to customize the search page by adjusting the column width of various search results.

The site also can store search histories in password-protected files and let users take shortcuts in their search queries by typing the site's URL along with a search term. For instance, typing "A9.com/Iraq" returns some 4.7 million Web search results. Those results are augmented with information about the site they come from, such as how many visitors it gets, which is drawn from Amazon subsidiary Alexa Internet.

A9 also offers a toolbar similar to those provided by Yahoo and Google. With this toolbar, users can perform additional customization of search results, including highlighting phrases or sections of pages and creating and saving a search "diary."

A9 is overseen by Udi Manber, a former Yahoo executive who developed Amazon's search-the-book technology last year.

Private Parts

Amazon and its new Palo Alto, California-based subsidiary could not be reached for comment. A9 has not indicated whether or not it is developing its own search technology, which would enable the site to operate independently.

Google spokesperson David Krane told the E-Commerce Times that Amazon remains a "trusted partner," noting that the two companies forged a wide-ranging agreement more than a year ago.

However, other Internet companies, most recently and notably Yahoo, have morphed from users of Google's results into competitors for the same eyeballs and advertiser dollars. "It's too early to evaluate where Amazon will go with this technology," Krane said, adding that Google has always operated in a field crowded with competitors of all shapes and sizes.

Selling Points and Pitfalls

One potential stumbling block for Amazon is that the features aimed at making the A9 site appealing to marketers and retailers -- for example, the ability to link a user's search history with his or her purchasing history -- are also the most likely ones to draw concern from privacy advocates. With paid search now a booming business, the Holy Grail in the sector appears to be finding a way to better integrate search and shopping.

Forrester analyst Charlene Li told the E-Commerce Times that search innovations are likely to develop at a fast clip as not only existing competitors, but also Microsoft, work to build on the success of search as a revenue generator and convenience tool.

"Amazon is taking a slightly different angle, looking at it more from the merchant's point of view, and that's going to result in some new twists," Li said. "Retailers have such a thirst for Web analytics and information about their shoppers that this is probably going to resonate with them right off the bat."

Click To Begin

Moreover, researchers say most online purchases begin with shoppers visiting a search engine. Last fall, Yahoo unveiled integrated search and shopping technology, and Google has launched its own Froogle shopping site, which provides comparison-shopping tools.

Stored data usually raises the hackles of privacy advocates, some of whom have been critical of the level at which Amazon and some of its subsidiaries have engaged in the practice. However, Amazon said its search site's privacy policy spells out exactly how stored information will be used. According to the company, data "may be correlated with any personally identifiable information that Amazon.com has and used by A9.com and Amazon.com to improve the services we offer."

The company also points out that the site can be used generically, without logging in, to avoid privacy concerns.

No Deadline Set

Amazon did not provide a time frame for the beta test or say when the search tool might be made available for licensing. Providing technology and shopping-based services to other retailers has become an increasingly important part of the company's business.

Meanwhile, Google is facing its own privacy battle over a beta test of its free Gmail service. Under pressure from privacy groups and at least one California state lawmaker, the search leader said this week that it would review its plans for Gmail, which originally called for almost unlimited storage and searching capabilities for users but also stipulated that users' e-mail message content would be scanned to provide targeted advertising.

 

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