Yahoo And Amazon Experience Cost of Search Problems, Says Noted Search Expert Steve Arnold of Arnold It

Stephen E. Arnold, a noted enterprise search expert, has released evidence of large problems in premises made by Yahoo and Amazon, two online giants. Arnold contends that these statements are the first real revelations of the problems in management going on behind the scene, in his article for Online Magazine’s November/December issue. This article will be available on a fee basis by Nov. 30th from the website at www.onlinemag.net. A complimentary PDF of the article can be sent to industry trackers and journalists by writing sa@arnoldit.com directly.

Regarding Amazon, Arnold reports attention should be paid to its 10K reports that show costs for technology increasing since 2003 dramatically. “….technology costs could weaken Amazon, perhaps fatally, unless Amazon’s top-line revenue continues to grow robustly,” Arnold states. The costs associated with search are rising much quicker than revenue, he contends. He lambasts Yahoo for similar dilemmas, in the article.

Cost control on search technology is risky, according to Arnold. Search and online have three “unknown unknowns.”

• Environmental factors—costs triggered by an unforeseen event
• Extraordinary—costs that go far beyond whatever allocations the organization made
• Invention—costs associated with solving a problem, creating a new solution, or developing a new product

Will search become the new application interface? Arnold, says yes. “Each of today’s major players has a distinct and different advantage. Unfortunately, Google controls (as of July 2006), 42 to 70 percent of the traffic for searching….A merger of Microsoft and Yahoo! would be interesting. Google could partner with Amazon to form Googlezon. eBay could find a happy home with Barry Diller’s IAC,” Arnold states in his article’s conclusion.

About the Author
Stephen E. Arnold is an independent consultant with www.arnoldit.com specializing in online and search. In addition to The Enterprise Search Report (2006), 3rd edition, found at www.cmswatch.com, he is the author of Bear Stearns’s The Google Ecosystem January 4, 2006, and The Google Legacy: How Google’s Internet Search Is Transforming Application Software (September 2005) as well as five other books and more than 60 journal articles.
In 1993, he and his partners founded The Point (Top 5% of the Internet), an online search system sold to Lycos, Inc. in 1996. Steve was one of the individuals involved in engineering the U.S. government-wide search system FirstGov.gov. A former senior officer at the Courier-Journal & Louisville Times Co. and Ziff Communications, Inc., he has consulted on numerous search-related projects. In addition, he has served as an expert witness in search-related legal matters, and he and his team of engineers and business analysts provide advisory services to clients worldwide. His search work ranges from the US West Yellow Pages to natural language processing for cutting edge start ups.