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Welcome to the ineedhits Search Engine Marketing blog, where we share the latest search engine and online marketing news, releases, industry trends and great DIY tips and advice.

We encourage you to get involved in our blog community - so share your opinions and experiences by leaving comments on our posts.

If you're looking for help with promoting your website - check out our range of affordable search engine marketing services.

Tuesday, August 30

Microsoft Responds to Google Talk

Hot on the heels of Google announcement that they have released a Google branded Instant Messenger client, Microsoft has released Instant Messenger 7.5. This is the latest instalment in delivering instant messenger capabilities spanning over 10 years of continuous development.

The announcement has been lost in all of the hype surrounding the Google launch. Version 7.5 adds such enhancements and improvements as:

Increased security through improved configurations options. Such things as file sharing and hyperlinks can be disallowed.
Addition of voice sharing, by allowing users to record up to 15 seconds of text which can be sent to their IM buddy
Improved audio quality with enhanced "echo-cancellation"

As a Microsoft Instant Messenger convert from ICQ over 5 years ago, none of these features are going to give me any reason to upgrade now. The same goes for installing Google Talk. Until there are enough people to make me put it on my machine, I simply won't install it.

Microsoft has over 170million MSN Messengers customers and support 26 languages around the world. Google has a long way to go before it can boast anywhere near this penetration and force me - and a lot of other people - to make the move.

Website Marketing Tips: Does your Website take too long to Load

Beyond the challenge of customers finding your website, there are many variables that need to be considered in ensuring you are maximizing your conversion (sales/leads from hits/traffic). Conversion is a pivotal component on your ROI - Return on Investment for internet marketing.

In this series of blog entries, I will present you with some tips to ensure that your website is generating the highest return on your marketing investment.

In this installment - I discuss the issue of website load time. When designing your website, you must take into consideration functionality and effectiveness when creating the sites elements. The "load time" (the time it takes for a visitor's computer to gather your website's information from the internet and present it on their screen) is often forgotten.

We often get carried away with the wiz bang appearance of rich media and complicated technology - forgetting the impact these have on the basic load time of our websites.

Remember back to the last time you tried to visit a website that took ages to load...you probably lost patience and closed the window, or gave up and tried a different website.

If that is happening to your website, you could be losing valuable customers who are unlikely to return in a hurry. The following elements are great starting points for helping to ensure your website is loading as quickly as possible.

Images
Pictures and graphics are great for the appearance of a webpage, but also significantly increasing the loading time of a page. All images should be optimized for the web - whereby image quality is traded off against image file size. Them smaller the file size, the better. Most modern image manipulation programs will assist you with optimizing your graphics for the web.

Tables
When designing your website, try to avoid using large tables containing everything on the page. You are better served breaking your web page down into components or sections (navigation bar, logo, page segments) and using separate tables for each. This will assist in the load time for each section and visitors will be able to see the page appear gradually rather than a long pause before everything opens at once.

Flash & Rich Media
Though Flash and other rich media is extremely attractive and captivating, it can take a long time to load and provides no assistance in your search engine optimization strategies. If you are going to use such media, you should try to create a balance between basic HTML with lots of keyword rich copy and the rich media of your choice. This will ensure you achieve the best of both worlds, and the basic HTML content will load quicker, ensuring you captivate your visitor while the Flash or other content loads.

Cascading Style Sheets (CSS)
Creating cascading style sheets for your website can significantly assist with the load time of your webpage, not to mention reduce the amount of coding required. However, these cascading style sheets can be located externally and called upon form your webpage which will further improve the load time of your web pages.

HTML Tags
When writing the code for your web pages, there are many tips and tricks to help the "load time"of your site. Many web designers forget to optimize their code when designing their sites. Not only should your code be optimized for keywords and search terms, to assist in search engine ranking, but the code itself can be streamlined to ensure links and other elements load quickly.

Site Hosting Location
No matter how fast your site may be, if you are not hosting your site physically close to where the majority of your customers are located, you are unneccesarily impacting the time to load your site. The time taken for the information to travel from your server to your user's PC is called latency. This can not be eliminated altogether but it can be minimized but knowing where your customer base is. You can increase the size of your pipe (your server's link to the internet) to assist increasing the amount of information that can get out there but this will not impact latency.

Server Speed
Checked your server logs lately? No, not to see when Google came and visited you last but to see what your CPU and memory utilization is? If these are high, it could indicate that your server is under powered and page requests not being dealt with as quickly as they could be. Consider replacing your aging server or better yet, increasing it's capacity or even getting in a second web server.

These are just some of many elements that affect the speed in which your web page will load. In the cyber world - every milli second counts, so periodic review of your website's load time should be conducted, especially if content on your site is changed regularly. Remember: fast loading times = higher conversion!

This article was written in conjunction with Rene LeMerle, ineedhits Online Marketing Specialist.

Internet Stocks - Are Back in Fashion...

The stigma of bygone IT stock market booms and busts seems to have faded, as is evident by the recent spate of mergers, takeovers and the unprecedented prices of some the internet's heavyweights' shares.

So are internet companies, the "in" flavor of the investment market again?

It would appear so:

...and with good reason. Search engine marketing is more than demanding it's share of the corporate advertising wallet. With the world's iconic brands showing the way, pulling significant funds from traditional advertising, to pump into the highly measurable and effective SEM arena, the internet is once again hot property, and looking more sustainable than ever before.

The strength of the internet marketplace, has meant that some of the web's most recognizable real estate is hot on the list of investors worldwide. Not only are internet based organizations consolidating their positions, but traditional media company's are seeing this as the prime opportunity to gain a strong stake in new markets.

Let's recap some recent merger/takeover headlines before we speculate who is next on the acquisition hit list:

Some of the notable acquisitions recently include IAC/InterActiveCorp's agreement to pay $1.85 billion for Ask Jeeves, Yahoo!'s move on Flickr, Hewlett Packard securing Snapfish, while The Washington Post Co. purchased Slate, New York Time Co.'s purchase of About.com and Dow Jone's purchase of Marketwatch.com, worth about $410 and $580 million respectively.

The well publicized recent purchase of stakes in Baidu.com and Alibaba.com by Google & Yahoo! highlight the global expansion that internet investment is taking. Overseas markets are following the trends and making international internet real estate extremely attractive with favorable purchase prices and high growth prospects.

So who is next on the acquisition and merger shopping list?

Well here is a quick list of some of the internet's more attractive prospects:

Theknot.com - wedding planning site - market cap of $230 million
Cnet.com - news site - valuation of $1.9 billion
IGN Entertainment - gambling site - hoping for $1 billion - potential IPO
TiVo Inc. - digital video recording provider
InfoSpace Inc - search and mobile phone services
Buzznet.com - photo hosting and sharing service
Answers.com - informational resource

But where does it end...it is only controlled by the size of your wallet, and everything's for sale if the price is right. Keep you eyes peeled for more and more interesting mergers and acquisitions as the internet investment market hots up while expansion and consolidation rule the game.

With Google just about to release another $4billion worth of shares, this provides them with enough cash to grow by acquisition. Microsoft - with many billions in cold hard cash - are also cashed up to purchase complementary services or technology. Yahoo! have also proved they are not afraid to spend money to grow (just look at their purchase of Overture some two years ago). With all this interest in "dot com" stocks, it is becoming a sellers' market again. Almost feels like 1998 all over again.

This article was written in conjunction with Rene LeMerle, ineedhits Online Marketing Specialist.

Google:: More than Meets the Eye

When you think of Google you think of the company, its brightly coloured logo and the great search results that it provides. You may also think about their very successful IPO last year especially if you were lucky enough to buy shares.

What most people don't think about is the other Google services which are not really search. For example:

Google Earth (Beta);
G-Mail (Beta);
Google News (Beta);
Google IM (Beta);
Google Print (Beta but on hold); and
Blogger

Many of these services are currently in Beta and are not necessarily services that we would immediately associate with Google.

I challenge the belief and notion that Google is just a Search Engine. More and more, it is becoming a Software Company, similar to Microsoft or Oracle but not totally a software company. Google can not be a portal (like Yahoo!) because these services are not aggregated and available from a single point or portal if you prefer.

As these products emerge from Beta, the Google strategy will hopefully become evident and the bigger picture of what Google is (or rather, trying to become) should emerge.

Monday, August 29

Paid Inclusion - the Forgotten Tool in the Search Engine Marketer's Toolkit?

I was recently at a function where a number of search engine marketers were talking to an audience of traditional marketers explaining the benefits of search engine marketing. The focus of these Search Engine Marketers was:

Pay for placement bidding (P4P); and
Search engine optimization.

Not once was paid inclusion mentioned and this did surprise me greatly, as paid inclusion - when used properly - can drive cost effective, quality traffic. Has it been forgotten by search engine marketers or is it simply being ignored because Yahoo! is the last tier 1 search engine supporting it?

Paid inclusion comes in two forms:

Per URL (Yahoo! Search Submit); and
Bulk Feed (Yahoo! Search Submit Pro).

Paid inclusion results appear in the organic / SERPS (Search Engine Results PageS), mixed in with the other crawled results. I am not going to debate the ethics of paid inclusion but rather show why smart search engine marketers take advantage of the program to beat their competition.

Paid inclusion does have many benefits that may not be apparent at first glance. In a series of 5 posts, I will look at the benefits of paid inclusion whilst dispelling some of the myths surrounding this valuable tool.

Thursday, August 25

Google Talks!

Google has just launched its own instant messenger service. Called "Google Talk", you can use it for the regular typed chat as well as for voice calls between computers.

Google definitely is a latecomer in regards to instant messaging, with AOL, MSN and Yahoo! all offering long-established and popular messaging services like MSN Messenger, ICQ or Yahoo Messenger. However, this latest product launch means that Google is looking more and more like a portal, no matter whether they would like to think of themselves as being a pure search engine and information retrieval player or not.

Google Talk is currently only available to existing Gmail users. While Gmail is still in beta, Google is starting to open up access to email accounts a bit more. If you live in the United States and have a cell phone, you should be able to score an invitation to Gmail via SMS if you follow the instructions on this Gmail account creation page.

In regards to the actual usability of Google Talk, early users haven't been overly impressed. Google Talk has all the typed chat features you'd expect, but the voice quality of the voice call option doesn't appear to be very good, and one reviewer (none other than Danny Sullivan from Search Engine Watch) has remarked that he missed the "wow" factor that he's come to associate with Google's other recent developments like Google Earth.

Do you use messaging a lot? In a previous job of mine, messaging was forbidden by company directive due to fears of lost productivity. I think messaging actually can provide a great boost to your productivity.

Pretty much everyone here at ineedhits uses MSN Messenger (we even ask new starters to set themselves up on Messenger if they haven't used it before), and it's proven to be a really helpful way of communicating with people. Instead of picking up the phone or walking to someone's desk for a minor question, you can simply type in a few words, and get a response back almost immediately. We also tend to send files back and forth via Messenger quite a bit, which is especially useful with oversized file sizes. Our contacts at an agency we work with across town are also on Messenger, and we probably use it more than email or phone when we coordinate campaign details with them.

On the other hand, messaging certainly adds to your daily information overload and you might fall into the "urgent versus important" trap - if someone is asking you something via Messenger, you might be more likely to respond to fairly low-priority queries instead of concentrating on your big-picture, important project work. Staff can certainly get tempted to abuse it for personal chats if they don't apply appropriate self-discipline and restraint. But you'd hope that you can trust your team to use a messaging service responsibly if you entrust them with something as important as taking care of your customers!

Tuesday, August 23

What is Search Engine SPAM?

What is search engine SPAM? Well at one WebMasterWorld conference I attended, SPAM was actually jokingly defined as an acronym, standing for "Site Positioned Above Mine". This was a very funny comment that I wish I could remember which one of the Webmasters said it, so I could provide the appropriate credit. After all, if there site is above mine, it must be SPAM because every webmaster believes there site to be the most relevant, most important and most useful to the searcher.

However, it does bring me to the point at hand, what is Search Engine SPAM? Email spam is quite easy to define, as it is - in common English - unsolicited (unrequested if you prefer) marketing material that is received via email.

With search engines, the definition is not as easy, as shown by the entry into the Glossary of SEMPO (Search Engine Marketing Professionals Organization):

SPAM: Any search engine marketing method that a search engine deems to be detrimental to its efforts to deliver relevant, quality search results. Some search engines have written guidelines about what they consider to be spamming, but ultimately any activity a particular search engine deems harmful may be considered spam, whether or not there are published guidelines against it. Example of spam include the creation of nonsensical doorway pages designed to please search engine algorithms rather than human visitors or heavy repetition of search terms on a page (i.e. the search terms are used tens or hundreds or times in a row). These are only two of many examples. Determining what is spam is complicated by the fact that different search engines have different standards. A particular search engine may even have different standards of what's allowed, depending on whether content is gathered through organic methods versus paid inclusion. Also referred to as spamdexing. Source: Webmaster World Forums

To me, the definition of search engine SPAM is quite simply, search engine cheating! Plain and simple. If you are SPAMing, you are cheating by defrauding either the search engine or the search user, using tactics which are taking unfair advantage of a weakness. You are defrauding people into visiting your site but making it appear something that it isn't or by falsely representing the site to be more important than it is.

To put this definition more formally, I consider search engine SPAM to be:

Any tactic (either known or accidental) that is employed by a search engine marketer with the intent of deceiving a searcher or search engine spider, by manipulating the order of the search engine results page in an unethical
manner.

The more obvious forms of search engine spam are (please note that these are my definitions and not formal definitions) defined below:

Black Hat SEO: Generally referred to the "darker" side of SEO, which is using unethical tactics to increase a sites ranking. The search engine cheaters and the ethical search engine marketers and search engines natural enemy.

White Hat SEO: Opposite to Black Hat SEO, where only ethical tactics are used to increase a sites ranking and not impacting on the quality of the search engine index. Rather enhancing int.

Gray Hat SEO: Not quite ethical, not quite unethical. A mixture of both.

Keyword Stuffing: Putting too many keywords (stuffing) or repeating your keywords in your meta data extensively. i.e. stuffing them with a single word or derivations of the same keyword.

Hidden Text: Text on a web page which has the same font colour as the background, effectively hiding it from the user. This is a way to increase keyword density on a page or to have text on the page which is actually not related to the main content of the page. A very old tactic that will get a website banned because it is so easy for the search engines to detect this.

Cloaking: A deceptive tactic where the search engine is presented a different version of a website (or page) than to a normal user. This is achieved by looking at the "user agent string" (when ever someone or a robot visits a site, they tell the server the name of what they are. This is the called the user string. For a Browser, this is generally the name of the browser. For a spider, the name of the spider i.e. Googlebot, msnBot) and if it is a known search engine spider, then serve up a very keyword rich site, that is included in the search results. A user who comes to the site, can be presented with a totally different page.

Doorway Pages: A web page developed with the sole purpose of attracting visitors by being specifically for search engines and not for searchers. It provides an entry point or avenue to a website that ranks well for a particular term. Unfortunately, most door way pages tend to be fairly generic and are of low quality.

There are a few more techniques which deserve greater attention in future articles.

The age old saying of "cheaters never prosper" is not true in the case with search engine cheating. Whilst here is significant money to be made from search engine traffic, there will always be cheating. However, if you are cheating, you will get caught. If you are an ethical business using ethical search engine tactics, you have nothing to fear and will come out on top as the cheaters are discovered and penalised.

If you are the victim of "Site Positioned Above Mine" by an internet marketer who is cheating, then your best response is to wait. Wait until they are caught (not if but when) and they are penalised. Search Engine SPAM hurts everyone and is a blight on the Search Engine Marketing industry.

Monday, August 22

Google Buys Android

Hot on the heels of announcing a $4 billion capital raising, news has emerged that Google bought the small start-up firm Android back in July. While not much is known about Android, the company is headed by Andy Rubin, a former hardware designer for Apple, and Andy Hertzfeld, also an ex-Apple employee. Both used to work for General Magic, and Andy Rubin was a co-founder of Danger Inc., which developed Sidekick, a mobile phone with personal organizer capabilities. Android is broadly said to be involved in mobile software, too.

Android is the latest in a string of mobile communication oriented activities for Google. Google bought Dodgeball, a mobile social networking service, in May, and launched local mobile search and SMS services in April.

So far, Google is keeping tight-lipped about its latest purchase. The company declined to comment further, only saying "We acquired Android because of the talented engineers and great technology. We're thrilled to have them here."

Sunday, August 21

Search Engine Corporate: Google and Yahoo! Set to Race. Again.

Fresh from the announcement that Google is set to release some $4Billion worth of shares to raise further capital, speculation is rife that Google is amassing a slush fund, to go after various properties.

One company that looks like a solid prospect for acquisition is - not surprisingly - a traditional media company. Trader Classified Media, which owns 575 print titles including Canada's Auto Trader to Buy and Sell Chinese and 56 websites across 20 countries, has been identified as being firmly in the sights of not only Google but also Yahoo!

An acquisition of Trader Classified Media by one of the search engines would provide additional real estate to bolster their P4P advertising networks with the aim of reaching more eyeballs. More eyeballs on the adverts, should result in increased clicks, which means more revenue. The 56 websites boast over 11 million unique visitors each month, according to stats quoted on the corporate website.

However, such an acquisition provides more than just "more eyeballs". It provides access to many sest of new eyeballs that previously have gone untapped but have become increasing important. Trader invested $193M last month in Sou Fun Holdings, which is a Beijing based online properties listing business (see the acquisition press release)

Access to the exponentially growing Chinese online community and marketplace is something that many web based companies - including Google, Yahoo! and Ebay - have been actively pursuing. Both Google and Yahoo! have made recent strategic investments in the Chinese market place.

Whoever wins the race for Trader (although a race is even yet to be confirmed) will take the lead in the marathon to gain majority share of the important Chinese market. This is where both Yahoo! and Google see their long term revenue grow coming from. Both companies need to acquire new markets and/or revenue streams to keep the analysts happy and ultimately, their shareholders.

Another example of where Google and Yahoo! are butting heads in what is a proving to be a very competitive industry. In my opinion, the winner of this multi path race is not the one who has the highest search engine user satisfaction, or who has the biggest index, but the search engine who can keep double digit percentage growth will be the winner. At least on the stock exchange.

Friday, August 19

Does a Bigger Index mean a Better Index?

Yahoo! recently announced that they have indexed 20 billion objects within its index. My colleague Nancy Hackett, recently wrote about this announcement in her article Search Engine Technology: Yahoo! - 20 Billion Objects Indexed . To compare this to the "mere" 8.2 billion web pages indexed by rival Google.

Whilst this makes for great PR for Yahoo! (public relations and not page rank) it doesn't do necessarily do anything for the consumer. The consumer being the person who is typing in the keywords and expecting a quality result. A bigger search engine index does not necessarily mean a quality search engine index. In fact, I would say that is it quite opposite.

Just having an object in the search engine index doesn't make it a quality object. If it isn't a quality object, it is highly unlikely to ever be presented in the results to the user. i.e. deemed irrelevant or so poorly optimized that it ranks in the bottom 10% of the SERPS.

It also does not surprise me that Yahoo! have managed to increase their index size. Yahoo! Slurp (the hybrid best of breed spider technology which grew out of the Inktomi, AltaVista and Fast spiders) has been very aggressive of late and requesting many pages from servers around the world.

Further more, Yahoo! has one huge advantage over Google. Through Yahoo! Search Submit Pro, Yahoo! is provided with many tens of thousand of pages that it might never have found during traditional crawling methods. Google does not have - and according to all of their statements on public record - will never have, a Paid Inclusion program. This does put Google at a disadvantage in the bragging rights over whose index is bigger.

The most accurate measure (I believe) is on search user satisfaction, which according to the latest study is still Google. Although the gap is narrowing with Yahoo catching up to Google, with a score of 80 out of 100, verus the Google score of 82%.

This reinforces my point that many of the extra objects in the Yahoo! index are adding no value, other than bragging rights. So is often the case, bigger doesn't mean better.

Note: an object is defined as being either a web page, an image or any other file type (video, MP3 etc).

Wednesday, August 17

Is Search Engine Marketing Art or Science?

More and more, Search Engine Marketing (SEM) is starting to become an important part of the marketing mix for every company - whether it is a Fortune 500 listed company right down to small retailers with a website. Search engine marketing is not just an important part of internet advertising, but a major

component of the overall marketing strategy. It is moving from the realm of being a "niche" marketing tactic, handled by the online marketing coordinator, to being handled by the more senior marketing people in any organisation - who I deem to be traditional marketers.

Search engine marketing is a phrase that has been coined to describe the process of acquiring search engine visitors and driving them to relevant pages within a particular website. Traditionally this has been done using Search Engine Optimization (SEO) tactics, but more recently (say in the past three years) through Pay for Placement (P4P) tactics, such as Google AdWords.

Many of the traditional marketers that I talk to regarding search engine marketing fail to grasp exactly how powerful a medium search is. Whilst they may be grasping the concept that getting visitors to a website should increase sales (or leads if that is what they are trying to achieve) they do not necessarily "get" the powerful testing abilities that are available with Search Engine Marketing and e-commerce in general.

They also fail to focus on the ability to monitor ROI at a near real time basis and therefore, effectively modify a campaign based on this feedback.

What I have seen traditional marketers do well, is developing quality websites and the associated copy for those sites. This seems to be especially true for people who have a strong exposure to direct marketing or come from a direct marketing background. On the flip side, search engine marketers who have come from a technical background tend to lack these creative skills.

On one side you have a very scientific approach to search engine marketing, which is as carefully planned and scripted as any formal software development process. The other side is all about the creative elements.

So, the question I pose is:

"Is search engine marketing and the associated tactics (SEO, P4P bid management, paid inclusion, web analytics) a science following a logical procedure or an art form?"

Personally, I say that search engine marketing is both an art and a science. Why? It is both an art and a science because it requires an understanding of the "science" of searching (the algorithm) and an understanding of the many tactics which can be employed. The sheer amount of jargon, acronyms and technical terms also firmly push it towards being a science. The science can also be extended to the website to improve conversion through the use of A-B testing, customized landing pages.

The "art" comes from the need to be creative in implementing many of the tactics of science. This is where a creative mind is required. This includes:

writing quality ad copy that is appealing to the searcher;
developing highly converting landing pages that rely on quality copy and strong calls to actions to convert users;
being creative in choosing keywords and their various permutations and combinations (misspellings, synonyms, acronyms, product nick names etc).

In order to have a successful search engine marketing campaign, there must be a balance between science and art. The two disciplines which are at either end of the creative scale, should create abrasion, as they are in conflict with each other.

I firmly believe that unless your SEO specialist and your marketing department are arguing, neither is doing their job effectively. I.e. marketing will want to keep website copy clean and punchy, whilst the SEO specialist will want keyword rich copy - and lots of it.

For effective search engine marketing, that creative abrasion must exist. There is no such thing as simple art or easy science. As my parents and teachers told me many times whilst growing up, anything worth doing is not going to be easy. This is most definitely the case with SEM, SEO and driving sales through the web.

To quote Einstein:

"When the world ceases to be the scene of our personal hopes and wishes, where we face it as free being, admiring, asking and observing, there we enter the realm of Art and Science."

That is exactly how Search Engine Marketing needs to be looked at - with an admiring, observing and constanly asking mind seeking a balance between Art and Science.

Search Engine Rumour: iTunes + Google = iGoogleTunes?

The search engine marketing is always full of rumours, innuendos and speculation. Generally, I refrain from making comments on these rumours until they become substantiated.

However, I could not stop myself from not only reading this one but also commenting on it. Could Apple and Google be joining forces to provide a copy of the iTunes store from the Google home page?

That is the rumour that The Street is claiming in their article "Apple Bucks Tech SellOff". To quote the article:

According to market chatter, Apple is set to announce a deal with Google
(GOOG:Nasdaq) calling for Google to offer Apple's iTunes music store through its own site. The rumored deal would pair the nation's leading online music store with its leading search engine.

Personally I don't really mind if iTunes is sold through Google or anyone else. I just want the Australian version to be finally launched! If this proves to be fact than a rumour, I love the name of "iGoogleTunes". As this is what most people do anyways when searching for music, but with a legal result.

Tuesday, August 16

Search Engine Corporate: MIVA Settles With Yahoo!, Share Price Surges

MIVA, formerly FindWhat.com, has settled a long-running legal dispute with Yahoo!'s Overture Services. The dispute centered on patented technology that enables advertisers to use automated bidding systems to place paid search ads on search engine results pages.

After MIVA agreed to make a one-off payment of $8 million to Yahoo! and to license some of Yahoo!'s patents, Yahoo! dismissed all its claims. In response to the settlement, MIVA's share price rose by almost 10% in early trading on Monday. MIVA's shares ended up closing at $6.05 on Monday, 6.51% higher.

Monday, August 15

Search Engine Corporate: Yahoo! Invests Big in China

Yahoo! has acquired a 40% stake in alibaba.com, a Chinese B2B portal that also operates a consumer auction site, email and payment services and search. In addition to paying $1 billion for the stake in alibaba.com, Yahoo! will also hand over control of Yahoo!'s Chinese operations, valued at $700 million, to alibaba.com. After the deal is closed (expected for the fourth quarter of 2005), the combined corporate entity will be valued at $4 billion.

Alibaba.com is run by its founder and CEO Jack Ma, a 40 year old entrepreneur and former English teacher, who is already being called the "grandfather of the Chinese Internet".

According to bankers, Mr Ma has closed the deal with Yahoo! after playing Yahoo! off against eBay, who had also shown interest in alibaba.com in the recent past. While fans call Mr Ma a visionary, critics question the substance of his company, pointing out that alibaba.com only generated revenues of $46 million last year and questioning the company's business model and focus.