Keynote Press Release

SAN MATEO, Calif., — January 13, 2005 — The Yahoo! and MSN search engines are closing the gap with Google by improving the search experience for consumers and that will lead to increased usage for those sites, according to a new study. The syndicated research study conducted by Keynote Systems (Nasdaq “KEYN”), The Internet Performance Authority®, provides the industry’s most comprehensive competitive benchmarking of customer attitudes and experience at leading search engine sites.

The Keynote Customer Experience (CE) Rankings for the Search Engine Industry are based on research with 2,000 consumers as they interacted with leading search engines. In addition to traditional opinion data, Keynote’s proprietary research technology collects detailed qualitative and behavioral data as users perform tasks at each site.

Google Leads, Yahoo! and MSN Close the Gap “Google is the king of customer experience in the search engine industry, but Yahoo!, MSN and Ask Jeeves are improving,” said Dr. Bonny Brown, director of research and public services for Keynote. “Given the open nature of the Web, as these sites continue to improve the user experience they will undoubtedly begin to attract more users and improve user loyalty. Obviously this will impact the advertising side of the business.”

According to the study, Google maintains its clear leadership position in the search industry, again leading the Keynote Customer Experience Rankings. Sites topping the Keynote CE Rankings perform best, in aggregate, across all 250+ metrics and indices measured during the study, including those for brand impact, future usage, customer satisfaction and customer loyalty.

Keynote Customer Experience Rankings

1. Google
2. Yahoo!
3. MSN
4. Ask Jeeves
5. Lycos

However, Yahoo! and MSN have made significant gains against Google since the last Keynote search engine study, published in May 2004. Yahoo!, which remains in second place across the Keynote CE Rankings and other leading indicators, launched an expanded local search service and a new search results page after the last study and, as a result, significantly improved its overall user experience.

The quality of local search results is a major frustration to many search engine users. Across all search sites, almost one in four (22%) users complain that the local results are not what they are looking for or are not ranked appropriately. Yahoo! showed significant improvement in the ranking of the quality of its local search results, tying Google in leading the industry in this key category.

MSN, which remains in third place overall, began separating sponsored results from its Web search results in July 2004 and, as a consequence, also showed a significant improvement in overall user experience. The company is expected to release a new version of the MSN search site in early 2005, and that site will be evaluated in the next Keynote study in June 2005.

The perceived usefulness of sponsored results is one of the top five drivers impacting user experience, and MSN showed a significant increase in this category since the last study. More than 47% of MSN users described the site’s sponsored results as very useful in the most recent study, as compared to just 37% doing so prior to the change.

Ask Jeeves also showed a significant increase in its overall customer experience in large part driven by a significant improvement in its local search.

Yahoo!, MSN Jump in Future Usage Index As a direct result of their improvements in user experience, Yahoo!, MSN and Ask Jeeves also saw a notable increase in their standing in the Keynote Future Usage Index, which measures the likelihood of consumers to use a search site as their primary search tool and to return to the site in the future. The index also measures a user’s likelihood to recommend a search site to others or to use a search toolbar offered by the site. Google maintained its position as the leader in the Future Usage Index, but did not improve its overall standing.

Since the last study, Yahoo! has boosted the number of users who said they would consider the site as their primary search engine by more than 20% and MSN by almost 30%. More than 81% of Yahoo! users and 61% of MSN users said they would return to those sites in the future, as compared to just 72% of Yahoo! users and 55% of MSN users stating so in the previous Keynote study.

“Over the past year, the major search engines have made great strides to improve their services, and users have noticed,” said Chris Sherman, Editor, Search Engine Watch. “However, loyalty is fragmented, and alternatives are just a mouse click away. It's becoming increasingly crucial for search engines not just to attract users but to build loyalty – and the only way to do that is by improving the overall quality of the user experience.”

Even though 75% of users say they have one primary search engine, when search expectations are not met up to 50% of users will turn to another search engine as an alternative. Additionally, up to 20% of users regularly use different search engines for different types of searches. As a result, all the leading sites get fairly extensive exposure.

MSN Separation of Sponsored, Web Results Pays Off The perceived quality of search results is the leading factor influencing user satisfaction, and MSN was the only site to make significant gains in this category. Google and Yahoo! continue to lead the industry in terms of user perceptions about the quality of search results.

Keynote studies, which measure both user perceptions and actual search results, have revealed that search engine success is based in large part on the presentation of search results and brand affinity. Sites that users rank well in terms of presentation and brand, also rank well in perceived quality and success of search. Keynote has found that actual search results returned by the leading five search engines, when measured objectively, do not differ significantly. In fact, Lycos, Ask Jeeves and MSN perform as well as Google and Yahoo! when actual user success in conducting complex searches was measured.

“MSN’s recent separation of sponsored results from actual Web results greatly improved user perceptions of MSN search results,” said Brown. “This move has increased the loyalty of MSN users and improved perceptions of advertising and sponsored results on the MSN site.”

Piper Jaffray predicts the search engine industry will generate $8.9 billion in revenues by 2007, up from $2.6 billion in 2003.

The entire report, Keynote Customer Experience (CE) Rankings for the Search Engine Industry, is a 100+ page examination of the search engine industry containing hundreds of additional data points and a detailed analysis of the findings. For information about purchasing the full report, visit http://www.keynote.com/syndicated.html