Internet search engines mull change in ad practices

Andrea Orr

PALO ALTO: A number of Internet search engine providers said on Monday that

they have changed or will consider changes in the way they render search results

to help users distinguish advertisements from other Web content.

The moves came after the Federal Trade Commission last week said it would

urge Web sites to make sure that "any paid ranking search results are

distinguished from non-paid results with clear and conspicuous

disclosures."

The practice of including ads in search engine results has proven as one of

the most lucrative methods of Internet advertising, but a Portland, Oregon-based

consumer group affiliated with Ralph Nader asked the FTC a year ago to look into

the practice.

Not all the Internet sites that offer search engines agreed with the FTC

findings that their results could be misleading. But some conceded they were

open to adjusting their policies. "We believe that the paid listings we

display on our site are delineated from our search results and that the

disclosure is not misleading," Fred Bullock, chief marketing officer of

AltaVista, said in a statement.

Nonetheless, Bullock said he would take the FTC's recommendations seriously

and review them carefully. AltaVista, a unit of CMGI Inc., is one of several

Internet search services that use advertisements, or paid listings, compiled by

Overture Services Inc.

Advertisers go to Overture to bid on certain search terms, to insure their

name appears when a given term is queried. For example, if the term

"Paris" is entered on AltaVista, advertisements for various hotels in

Paris and travel planning Web sites will appear before content from the rest of

the Web.

Last year, Commercial Alert asked the FTC to look into that practice of paid

placement in Web searches and specifically whether it violated laws mandating

disclosure of advertising content. The original complaint, filed in July 2001,

named AltaVista, AOL Time Warner, Microsoft Corp., Look Smart Ltd. and others.

While the commission decided not to take action on the complaint, the FTC

recommended in a June 27 letter that the search engine providers review their

policies to ensure that paid search results were clearly distinguished. For its

part, Terra Lycos said four months ago it started to label its paid results

"sponsored search" instead of "from our partners," to

clarify that they were ads. The company said it would take seriously any further

recommendations from the FTC.

AOL Time Warner Inc.'s America Online said it saw no problem with its use of

paid advertisements. America Online separates a list of "sponsored

links" at the top of its search page before listing unsponsored search

results.

(C) Reuters Limited.