goto.com - we ******* up maybe?

[havaloc]

Got this email today from GoTo.com

Dear GoTo Advertiser:

On March 1, 2001, we announced pricing changes of a new minimum bid of
5 cents and a minimum monthly spend of $20. In an effort to minimize
the impact of these changes on our existing advertisers, we grandfathered
all listings and accounts created prior to March 1st.

With the holiday season approaching, we have decided to extend the grandfather
period until further notice. Should we decide to end the grandfather
period, we will announce it 30 days in advance.

This means that all of your grandfathered listings will be exempt from
the 5-cent minimum and all of your grandfathered accounts will be exempt
from the $20 minimum monthly spend. Please remember that if you changed
your bid on any of your grandfathered listings or opened new accounts
after March 1st, they are no longer eligible for the grandfather status.
This is also true going forward.

If you have any questions about GoTo's minimum bid or minimum spend requirements
or how to maintain your grandfather status, please click on
http://www.goto.com/d/about/advertis...tcfaq_mb.jhtml or feel free
to send us an e-mail using our Support Request Form, found at https://secure.goto.com/s/dtc/center...tCenter.jhtml.

Sincerely,

Ted Meisel, President and Chief Executive Officer, and
Jaynie Studenmund, Chief Operating Officer

[singloon]

same email too... anyone gonna still use them?

[Gracklor]

Heh. That's kinda funny. I thought it was strange that Goto was going to try to force advertisers to pay more money in a market where people are willing to pay less and less for advertising.

Makes me wonder, also, if maybe they're hurting a bit.

If that's the case (ie, they're "extending" the grandfather period indefinitely), I may just use them again. Most of the listings I use are under 5 cents, and there's no thing like cheap traffic.

I remember all the debates that raged a few months ago (when Goto first announced these changes) about how Goto could afford to take steps that would eliminate all the people who either had low advertising budgets or would only pay for cheap traffic.

Maybe there are more of these types of people than Goto thought. And we all know that--especially these days--when money talks, businesses listen.

[emailer]

The announcement just means that GoTo has decided not to shoot itself in the foot as a major offer aggregator has. GoTo has made the decision it needed to make to remain the pre-eminent paid search provider.

[surfy]

Hi Emailer,

They have already shot themselves in the foot. Now, they are waiting for the recovery. I think it is so they can make their revenue numbers in the following quarter while they continue to build up their higher paying 5 cent base. The last quartly statement I read from Goto suggested they were still signing on thousands of new advertisers.

We are weaning ourself from Goto either way unless they remove or lessen the 5 cent minimum on new bids. Other sub-five cents either don't have the auto-pay feature active or are otherwise not interested in maintaining their terms due to changing marketing conditions.

Thanks, Daniel

[bbv91258]

It looks like GOTO is getting scared of Findwhat.com. They don't want all of those advertisers with bids below .05 to go over to Findwhat.com. Findwhat's (FWHT) stock by the way has risen over 35% this week....it's a company to be afraid of in my opinion!

[singloon]

Looks like it too - http://findwhat.com/content/pressrelease.asp?a=62

[wsz]

Originally posted by singloon
same email too... anyone gonna still use them?

Yep, as long as my bids stay at one cent, I might as well stay with GoTo. I had previously planned on waiting right up until the deadline for the price increase, and then deleting most of my listings. But now I might as well just leave them alone. I probably won't be adding anything new, since the five cent minimum would apply then.

I agree that they are probably quite concerned about the competition from FindWhat and Sprinks, and the possibility of a mass-evacuation of established customers.

[WildComputer]

I think they've done this the worst way possible from their own point of view

1. Annoy many of your long term customers (original announcement)

2. Give the annoyance 5 months to sink in. Also allows the advertisers plenty of time to find other places to spend their money. I myself have deleted many sub-5-cent listings (that they were making money on, as in many cases I was the only bidder) as part of general a/c cleanup in anticipation of the changes. I'm sure some have quit, or done similar things to me

3. Only partially reverse the decision. What this means is that you still can't make a change to a sub-5-cent listing, i.e. leaving advertisers and surfers with less up to date/quality results than could otherwise be the case.

My guess - either this is because they are struggling to meet their revenue targets (i.e. short term decision, but if it goes against their strategy, that's not a positive sign) or just a clueless/indecisive decision (even big companies make these)

An interesting angle (I haven't checked this for a while, but I think my memory is correct, you can read Goto's public reports and check if I'm right) is that I believe their average amount per paid introduction had been falling for several consecutive quarters prior to the original $0.05 announcement. So although many of us speculated this was because of their syndicated results, it could also have been an attempt to reverse this trend (which I'd imagine must indirectly affect their stock price). Maybe they also forgot that they had competition and thanks to FindWhat's strong growth, are rediscovering they do.

A possibly interesting comparison is RealNames which were syndicated everywhere about a year or so ago, but now seem to be harder to locate. Reading at pud's site, hidden among the slander and foul language, there is an interesting question about the direction of RealNames which I'm not sure was ever resolved by their management - is their immediate goal to be ubiquitious - to make a profit on this traffic.