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In early 2002, just before the Internet search "big bang," a major travel client informed us that all search-related expenditures would be stricken from their online ad budget. The client's rationale was relatively simple: "Search keywords are too expensive and therefore 'impossible' to realize an appropriate return on their advertising investment."

I wasn't sure what to tell the client, as search was still a nascent ad medium and we were ringing up sales, leads and traffic for this company in record numbers (approximately 12,000 sales per month at an average sale of over $300 per transaction). Fortunately, our recommendation held and we went on to set new records for exceedingly low cost-per-booking on hundreds of keywords.

Fast-forward a few years. It is 2005 and many of the keywords we had purchased for this big client have become unaffordable. As bid prices skyrocket, only to be outpaced by Google's stock price, the market is slowly finding the natural high ground, or "market cost," for competitive search terms. The trend is due to the limited inventory of searches, and a huge demand for the most competitive "money maker" terms.

The Rise and Fall of Natural Search

Enter the marketing pros who love math more than creative and have measured and archived results data, developing their own proprietary algorithms for optimizing Web page content and off-page linking to dramatically improve a client's standing in search results. Almost overnight, Natural Search Engine Optimization (NSEO) has become the talk of the Internet.

When all your rivals are bidding on the same keywords and running their own NSEO plans, the cost to play grows rapidly. There is also growing evidence that there is a shortage of quality search traffic.

Conventional wisdom would dictate that with search term bid prices reaching their market ceiling, the market will inevitably cool as ad revenues flatten out. Many think otherwise, and with good reason there's a whole new brand of "search" evolving.

While NSEO is sure to suffer major casualties over the next 3-5 years, opportunities will materialize as the major search engines continue to evolve into better, faster, smarter structures. It is a mathematical certainty that they will quantify and prioritize the most relevant sites, and present a problem that NSEOs alone won't be able to solve. The silver lining is that its demise will give rise to a new level of content creation and search-optimized Web design. In short, when the science of natural search optimization dies off, the Web experience gets better. How's that for evolution?

Enter the Carnivores: Microsoft Cometh

The market is enthusiastic about MSN Search with initial feedback cautiously optimistic about a brand with one of the largest networks on the Internet behind it. MSN Search promises more than the search we know today, though it's premature to say that the quality of that traffic is exceedingly high. It's probably a safe bet that Microsoft has far more in store for search than just the Web and your PC. And they are not alone. All the other major players are stressing innovative solutions to extend their search franchises.

Within the next few years expect every database (like Microsoft's SQL Server), video feed and sound clip (like MS Windows Media), and programs/documents (like Office) to be indexed with increasing granularity and intelligence. Yet search won't stop there. Inventories, people, property and pets, and all their attributes, will be searchable. Expect "next generation search" to enable women who have signed up for online dating sites to search for men whose eyes remarkably resemble Brad Pitt's. Or men to locate a date with a voice like Fran Drescher's.

If you thought we were in the age of "too much information," think again. Over the next few years, watch for the real time indexing and searching of a multitude of content as it is created, and with devices that we currently don't think of as data gophers. Clearly Microsoft is out to put Windows on every apparatus you click, carry and call. All of these devices will be able to search and retrieve content significant to the consumer using them. Perhaps they should code name this initiative T-Rex, as it has potential to become king of the food chain.

Microsoft's entrance as a force in search will spur Google and Yahoo! to innovate or become search "dinosaurs." More likely, however, is that Search Engine Optimization providers, agencies and the engines themselves, all must change. Remember, dinosaurs evolved to become today's birds. Innovation and evolution won't kill most search players and the impact they make on business; it may actually give them wings.

Ferranti is founding partner/CEO at New York-based Internet Marketing Company Endai Worldwide, whose clients include Ruth's Chris Steak House, Laplink Software and Citigroup Financial. Contact: (212) 430-0808 or www.endai.com.

Michael Ferranti is President & CEO at Endai Worldwide a leading Internet Marketing Company in New York City

http://www.endai.com 212.430.0808