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APRIL 15, 2004
Amazon Starts Its Search Engine The e-commerce giant's still somewhat mysterious A9 offering will clearly push personalization. But how will it make money? After months of speculation about what Amazon.com (AMZN ) would do with its mysterious search-engine company, A9, Web surfers finally got their first taste on Apr. 14. Yet despite some intriguing new features not yet found on leading sites such as Google and Yahoo! (YHOO ), the site (www.a9.com) -- still in test mode -- raises as many questions as it answers. The one clear message: Amazon views search as a key piece of its relentless drive to provide a sweeping suite of e-commerce services to both consumers and other merchants. "Search is the biggest thing online besides shopping and e-mail," says Chris Winfield, president of the search-engine marketing firm 10E20. "It's a pretty natural extension for Amazon." For now, A9's offering appears modest, at least on the surface. The site not only emulates Google's minimalist style but it even displays search results licensed from Google and offers a Web browser toolbar quite similar to Google's. But under the covers, A9 offers some unique capabilities, mainly the ability for people to personalize and organize their searches. For one, the site remembers every search one makes, so that they're easy to find later. MIND-READING. Even more innovative is a "notes" feature that lets searchers annotate Web pages they've found -- say, to remind them later what they found most interesting on that page. "We're doing a lot of work on personalization," A9 Chief Executive Udi Manber told BusinessWeek last month. "At Amazon, we understand it very well, and we've been working very hard on it. Search in many ways is about reading people's minds." What's less obvious is the e-commerce connection -- A9's raison d'etre and the unique angle that Manber has always said would set A9 apart from the search pack. Amazon has provided links on each search to its "Search Inside the Book" feature on Amazon.com, which allow people to find specific references inside thousands of books available from Amazon. But the bigger impact could come from the Google results themselves. Amazon, after all, is one of the biggest buyers of keywords on Google, so many of Google's results link to Amazon products anyway. The biggest question that remains is whether Amazon, through A9, is bidding to take on Google more directly. For now, at least, that seems unlikely. For one thing, Amazon isn't in the advertising business, as Google is, and has expressed no intentions to enter it. Moreover, A9 may be viewed by potential merchant partners as too closely tied to Amazon and thus less agnostic a conduit to customers than Google is. PRIVACY THREAT? However, a more direct clash ultimately seems inevitable. Google itself is testing a search engine for products called Froogle that's starting to get traction with Web shoppers. At the same time, Manber clearly isn't looking to limit A9's horizons. "We need to be able to help people get everything they need, not just a Web page," he told BW last November. How directly A9 eventually goes up against the reigning search champ, it faces lots of challenges. For one, it may run into some of the same privacy issues that recently have plagued Google. A9's privacy policy points out that information provided through entering search terms or by signing into one's Amazon account could supply the company with information that could personally identify the searcher. That may be somewhat less intrusive than Google's upcoming Gmail free e-mail offering, which could search the contents of messages to pitch personalized ads. But comments posted on some blogs already indicate some people are uncomfortable with A9's potential threats to privacy. Most of all, it's uncertain what A9's business model will be. As an independent company set up by Amazon, it clearly intends to be more than a mere conduit to items available on Amazon.com. Manber has said that A9 plans to offer its search services to other e-commerce companies as well. But neither he nor Amazon has outlined how potential partners might pay for those services and whether those partners would be limited to the manufacturers and retailers with which Amazon already has relationships. For all that, Amazon doesn't face much downside here. That's because, says Manber, "most people still don't find what they want very often." Anything that makes it easier for people to "find and discover whatever they want to buy," as one of Amazon's slogans goes, has to help the e-commerce pioneer's drive to increase its still-slim profits.  By Rob Hof in Silicon Valley
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