AOL Loses $76 million From Search Results Tweaks

Now that we have reached the point that Search is the Portal, we can all be forgiven for thinking that the user experience is no longer critical.

AdViking just read the excellent Dead Man Walking article on FastCompany  on the continuing demise of AOL that proves this is far from the truth and in fact that User Experience is more important than ever.

Or better, let’s rephrase that to knowing what experience user’s want when they use your Search is more important than ever.

In response to a fall in Search traffic at AOL (38.9 million visitors in November 06 vs. 35.2 million in May 07). Ron Grant*, the new COO for AOL, took the executive decision that the fall was due to the facSmithers and AOLt that AOL returned a rich results set (e.g.: multi-media, pictures), that was reported to have a higher than Google effective return on advertising. And so deciding to buck the movement towards a richer search experience (ASK’s 3D search, Google’s Universal Search), Grant ordered the results set to be more look Google’s.

The results of this change could be considered catastrophic. Pali Research analyst Richard Greenfield said, “Management was blindsided by how disruptive the change to search was.” In a period of industry growth, AOL’s Search revenue fell from $232 million in Q1 to $156 million in Q2. To put it bluntly, one could say that the changes made to the AOL’s Search Experience could be blamed for the drop of $76 million in one quarter!

It appears that Users liked the Search Experience on AOL and the fact that is was different was the just the point. That is users were in a different mindset when they came to use AOL Search. Meaning, knowing who your users are and how they use your site is critical.

Finally, on the trend around richer Search experiences, enquiro research wrote an enlightening whitepaper, Search Engine Results: 2010. It’s based on interviews and research on the impact of user interaction with these richer results. The interviewees included: Jakob Nielsen, Marrisa Mayer, Greg Sterling and Danny Sullivan.

* Time-Warner company men, Steve Falco and Ron Grant, have been put in place as the CEO and COO of AOL. Employees and now the wider industry appear to have started to refer to Falco and Grant as Mr. Burns and Smithers.


One Response to AOL Loses $76 million From Search Results Tweaks

  1. dylanfuller says:

    Here’s my 2 cent worth rant on this thread… AOL is sitting on an untapped well of value in search. There is always going to be a good business in being the “alternative” to the big 1 or 2 payers… AOL continues to roll out new country specific search sites and has made some progress in vertical and niche channels… With Yahoo under siege as it were from MSFT, I’ve got to think there is a small additional window of opportunity for AOL to try to grow search share. Why isn’t AOL trying to capitalise on this position? Or should I say why does it appear they are not making any positive progress? I have no idea. I would also comment: (a) to not count AOL out just yet; and (b) I have got to think Google would try to help them at some point.

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