The search engine business model

All revenue streams are advertising based, hence financial success mainly depends on organization and utilization of the sales function.

1. Direct marketing

The bulk of the revenue is generated from hundreds of local SMEs looking for cost - effective ways to promote their products and services. It is not a secret that pay-per-click based search engine marketing (SEM) is currently the advertising vehicle with the highest returns on investments.

2. Branding

Increasing numbers of traditional brand advertisers have also been purchasing keyword-based advertising products because of its impact on the success of integrated marketing communications. In addition to search enabled advertising, our web properties also capitalize on reach among local audience by selling traditional advertising banners.

3. The key to high profitability

The absence of traditional sourcing is the key cost - reducing factor contributing to the high profitability of search engines. The inbound logistics consist of information retrieval or web spidering via an automated, technology-driven process. The collected data is then organized and indexed; hence, it is rapidly available to internet users in the form of up-to-date information. While most of the internet-based media businesses tend to operate on decreased supply-chain and production related costs, this is even more so with search engines which, in effect, redistribute existing information available on the web.

The main source of competitive advantage in the eyes of the key stakeholders are seen as follows:

Advantages for Internet users

• Local, language-specific search, interface and many additional search tools
• The size, quality and freshness of the index (better results)
• End-user relevant advertising (branding, promotions, partnerships)
• Local end-user support

Advantages for Web publishers:

• Major online vehicle to increase web traffic
• Local support and SEO services

Advantages for Businesses / Advertisers:

• Local sales force
• Customer Relationship Management
• Extensive customer support (planning, buying, executing, post-evaluating)