Danny Sullivan is one of the best journalists in the Internet Search space. His article – published 6/2/2002 is below. I disagree with Danny’s conclusions but his piece is a considered and well thought out view. I’ll post my disagreements seperately, because I think it will be a good way to get to the real issues. The original URL is http://searchenginewatch.com/sereport/02/06-realnames.html
RealNames To Close After Losing Microsoft
RealNames, which provided a pioneering alternative to the domain name system, announced last month that it would cease operations as of June 28 after failing to renew an important distribution partnership with Microsoft.
Microsoft’s Internet Explorer provided “native” support of RealNames “Internet Keywords.” These were ordinary words, rather than domain names, that were linked to particular web sites. For example, “united airlines” was a RealNames keyword that lead to the United Airlines web site.
RealNames said it had no choice to but to close operations as Microsoft was its primary distribution partner. Microsoft was owed $25 million for RealNames “resolutions” already delivered over the past two years and remained unwilling to bet that RealNames would become successful in the long-term. In addition, Microsoft expressed concerns about the quality of RealNames keywords that were sold.
The bad guy in all of this is clear: Microsoft, at least when reading the commentary posted on the weblog run by RealNames founder and former CEO Keith Teare, as well as comments he’s made to the press.
Microsoft’s chief motivation in not renewing with RealNames seems to be a desire for complete control over the user experience, especially to help it direct users to Microsoft-owned content, Teare says on his weblog.
“As far as I can see the non-renewal of RealNames contract was because Microsoft wants former keywords like ‘IBM Thinkpad’ to result in an MSN Search page rather than going to the IBM Thinkpad site at ibm.com. And it wants control over the user experience.
500 million uses during Q1 suggests many people disagree. I am one of them. The browser is being turned from a conduit for a naming platform into a conduit for MSN Search. Once again, I do not dispute your right to do this. I do suggest it is wrong headed and narrow in its vision.
Attempts to poison journalists with misleading stories about RealNames selling ‘generic terms’ will not wash, especially when terms like ‘cars’ and ‘software’ consistently point into Microsoft properties. Tell me again, who is it that wants generic terms?,” Teare writes, in one of several open responses to Microsoft.
Teare also suggests that a Microsoft patent for “Flexible Keyword Searching” indicates that the company is planning a rival keywords system that it can completely control.
For its part, Microsoft disputes any notion that it plans a business of redirecting ordinary words in the way that RealNames did.
“Thereês no concerted effort of us getting into the redirect business,” said John Krass, MSN Search’s director of business planning. “We’re not getting into selling redirects as a business, which is the thing we were accused of.”
Krass did say that there are some terms, as Teare notes, that do redirect directly to Microsoft properties. He said these are long standing and that the main emphasis going forward is really to be on resolving ordinary words to search results at MSN Search, which is deemed to provide a better user experience.
“Giving someone a list of choices, people arenêt going to say, ‘Wow, that was weird’,” Krass said.
What Krass means is the idea that if someone entered a common or generic term into their browser, it can be difficult knowing exactly which site to redirect them to. Where should someone go if they tried to navigate to “notebook batteries?” A list of search results is likely to be less controversial than sending them directly to a web site.
Indeed, poor user experience is one of the twin reasons Microsoft said it chose not to renew the RealNames deal.
“It wasnêt a great user experience based on what the program evolved to, and the economics werenêt there, as well” Krass said.
Teare has countered that the “revocation rate” of sold RealNames by Microsoft was a tiny 0.14 percent between July 2001 and March 2002, suggesting that the user experience must have been good, otherwise Microsoft would have ordered more names cancelled.
Krass responds that the rate is low because Microsoft didn’t have the staff to go through and review all the names for quality, something it was told RealNames would do.
“We’d have had to hire a huge staff to go through it,” Krass said. “They [RealNames] were saying they were going to do it.”
So where does the smoking gun belong? I put it in the hands of RealNames itself. The company has made so many shifts in direction since it launched that its been hard to keep up with it.
Originally, generic terms weren’t going to be sold. Indeed, entering a generic term brought up a search results page similar to what Microsoft does with MSN Search but from a search engine that RealNames operated.
Later, generic terms were sold—and sold for big bucks, to the right company. MP3.com managed to get “mp3,” while Jobs.com got “jobs,” for example. Then another change of heart at the end of 1999, with the announcement that the sale of generic terms would be greatly restricted. Later, generic terms were once again allowed to be sold.
The actual product being sold was also hard to follow. RealNames were initially sold on a flat-fee annual basis, but later pricing might be negotiated based on the popularity of the term or the size of the client asking about RealNames keywords. A three-tiered listing of packages was introduced at one point, oriented toward business size. The last offering finally got better, with just two types of RealNames keywords sold and much greater ability to understand what each type.
Unfortunately, RealNames also moved to a reseller model in 2001 that caused new confusion. Suddenly, companies started contacting people in the US, trying to sell RealNames keywords but not necessarily creating trust in the product, as illustrated by this message I received from a reader in April:
“Yesterday, a salesperson called me at work, trying to persuade me to buy keywords from him that, when typed into the Internet Explorer browser, would take searchers directly to our company website.
We sell telephone logging recorders, so when an unsuspecting person searching for our type of product types ‘telephone call recorder‘ into the browser, if we have purchased that keyword, they end up at our site.
It’s bad enough that we have been forced to pay to be included in many search engines, and to buy keywords that allow us to be at all visible, but now we are supposed to compete for these keywords because if we don’t, searchers end up at someone else’s site.…
This salesperson represented that this program was sanctioned by Microsoft Itself. This, of course, may not be true, but if it is, the future of net surfing looks grim indeed. Actually, there must be some kind of connection, because if Internet Explorer zaps you straight to these websites, Microsoft must be involved somehow,” the reader wrote.
This message was just one of several I’ve received from readers who were confused about what was being sold, whether it was legitimate and who was behind the program.
Distribution, of course, has turned out to be the undoing of RealNames. By losing Microsoft, RealNames determined it could no longer do business. However, RealNames didn’t start with Microsoft. It began with a plug-in for browsers, that you had to download. It then increased its distribution dramatically with a series of deals with search engines. That culminated with the Microsoft win, native support within the Internet Explorer browser itself.
The search engine deals were not renewed. AltaVista, the first RealNames search engine partner, dropped RealNames in April 2001. Google beat AltaVista to the punch by dropping support in February 2001. A deal with Go.com ended when that service switched over to using Overture listings in March 2001. As a result, RealNames put all its eggs in the Microsoft basket, something Teare says on his weblog the company felt comfortable doing, given that Microsoft had a 20 percent investment in RealNames.
Clearly, it was the wrong gamble. But blaming Microsoft for this? Microsoft didn’t ask RealNames to become nearly 100 percent dependent upon it, any more than a casion asks you to bet all your money in a game of chance. The choice was one that RealNames made.
Sadly, RealNames was the leading candidate for a more sensible web site addressing system than the continuing fiasco of domain names. Without a viable namespace system, companies can likely continue to look forward to an endless parade of new domains that they’ll feel compelled to register, to protect their trademarks or brand identity.