I have written about Search Agents before (1, 2). Make sure to read those posts to know what I’m talking about here. This post delves a bit deeper into business models for Search Agents. The key business issue is how to monetize search users with this novel approach to search, while keeping costs from use of third party search services low.
So how to make money with a Search Agent? A straightforward way to earn a commission would be to run banner ads or text ads from an ad network on the results pages. This is relatively easy to implement but subject to use of ad-blockers.
A more sophisticated way would be to offer paid placement among results, based on advertisers’ keywords, like the ones Google pioneered once they became big. This of course requires significant development effort, which might be better used improving user experience.
A last variation of generating revenue would be to charge power users for a plan that includes advanced features not covered by the free plan. This might generate significantly better income than ads, if done correctly. The price of this of course is keeping good features away from valuable users, which might play into the hands of competitors.
While the development of a Search Agent can require serious capital, hosting and server costs are manageable, until large scale is reached. Unlike search engines, the Agent does not crawl the depths of the Web itself, which would require a lot of compute capacity. Costs for running Search Agents are proportional to the number of users, which will be small at the beginning of such a project.
A Search Agent depends heavily on third party search results for its functioning. These fall into three categories: free, paid and undefined. Some services permit use of search services for further processing for free, using these is not a problem. Many search engines charge a modest fee for using their search API, such as a few dollars per 1000 queries or a flat monthly fee of up to around a hundred dollars. Using many such search offerings can add up quickly, leading to a cost per search session of a few cents. Finally some companies prohibit such use or don’t have an explicit policy.
By contrast, normal search engines have large upfront costs for crawling the Web, but low costs per search session. Their main income is paid placements and ads on result pages. A large number of search sessions bring in money to amortize crawler operations.
For a Search Agent to become profitable, whichever type of route to income is chosen, the cost of using third party searches will have to be covered on average, in addition to the overhead of development and management.