Operations Management - AltaVista vs Ask Jeeves - Assignment Example

Operations Management AltaVista Vs Ask Jeeves Executive Summary AltaVista and Ask Jeeves had surfaced as very promising search engines, with innovative features and media hype. The IT era has proved to be very challenging for technology intensive sectors. If a company is found wanting in providing regular inputs to its businesses, then the competitors take over. This is exactly what happened in case of the two prominent search engines called AltaVista and Ask. They could not sustain the initial momentum, owing to a range of reasons like frequent change of ownership, loss of focus, not enough resources etc. These two companies are still on the lookout for a reasonable share of internet traffic at their websites with fierce competition from the likes of Google and Yahoo. When so many websites have come and gone without leaving a trail of their disappearance, AltaVista and Ask have quite successfully held on to the tide so far, with plans for further growth in the near future. Introduction The operations system of an organization is the part that produces the organization's products - in case of manufacturing organisations and that polishes the service operations making them more user friendly - in case of service oriented organizations. In fact operations management has its origins in the study of 'production' or 'manufacturing management'. In some organizations the product is a physical (tangible) good like a television, computer system, furniture item etc. while in others, the 'product' is a service like health care, insurance, telephone services, internet searches, tourist services etc. What is common in both these types of operations is the 'conversion process.' Resources are used by the system in the 'input' chain, which gets converted into valuable 'outputs' after passing through this conversions process. This is where the role of operations management comes into picture. The job of value addition and maintaining certain standards of quality identifies how effectively and efficiently the task of operations management has been carried out. The inputs can be raw materials, land, labour, capital or well defined information. But the input can also be in the form of imperfect information, under challenging circumstances. This is where the essence of operations management comes into play; it calls for making rational decisions in difficult circumstances with limited, imperfect information. Operations management can therefore be defined as1 'the design, operation and improvement of the internal and external systems, resources and technologies that create and deliver the firm's primary product and service combinations' Problem Statement In this study we'll be trying to study the operational strategies of AltaVista and Ask Jeeves. During the course of study, we'll be taking a look at how both these companies have evolved over the years. Both these search engines have had differing amounts of successes during the course of their journey. We'll try to compare some of operational aspects of these companies and comment on their success or failures. Analysis Internet has indeed established itself as a potent source of information. There are innumerable numbers of sources of information, which tend to prove detrimental for the information seeker. As per the latest available figures, more than a billion users have been using the internet worldwide. But to take the desired piece of information out of the huge information databank, search engine prove very useful. Search engines appeared on the scene during the early 90s. Since then there have been many evolutionary changes in the search engine technologies. The market is led by the likes of Google and Yahoo. This study is carried out to analyze the market position of AltaVista vis--vis Ask (formerly known as Ask Jeeves). The search engines started to provide a list of web sites where we were supposed to find responses to our search terms. The websites appearing in response may have answer to our query or might prove to be irrelevant. Search engines like Ask Jeeves tried to come out directly with an answer to our questions (Riggs, 2005) Position in the market place AltaVista, which literally means "a view from above" was developed in 1995 and provided Internet's first Web index2. AltaVista remained3 in the strategic company of Yahoo Inc. from 2006 to 2008. The search engine pioneered introduction of features like language search, automatic phrase searching, photo search services, Family Filter options etc. It was acquired by Overture Services in 2003, in which year AltaVista saw an increase of over 150% in searches. Later this year AltaVista was taken over by Fast Search & Transfer ASA, but somehow the company could not sustain the initial momentum and subsequently the competition became quite fierce and AltaVista started loosing out the sheen as a reputed search engine. Now the net-community started using the more sophisticated and technologically advanced Google, Yahoo and MSN. Ask Jeeves started its journey4 in 1996 from Berkeley, CA when David Warthen, a software developer, and Garrett Gruener, a venture capitalist collaborated to produce a search engine which could understand questions in plain English and provide fast access to relevant answers. In 1997 its name was changed to Ask.com. Subsequently in March 2005, IAC/InterActiveCorp and Ask Jeeves signed an agreement for the purchase of Ask Jeeves by IAC. Like AltaVista, Ask.com also made good progress in the initial formative years. By January 1999 Ask began answering 700,000 searches a day. This number went up to 1 million searches by May and subsequently to 2 million by October the same year5. In September 2001, ask.com integrates the algorithmic search. But it took quite a while to achieve the break even. It was only in the first quarter of 2002 that the company announced profitable operations. Ask.com also introduced Spell Check technology into its searches in 2002. Thereafter the company could achieve a good turnaround and soon became the 51st best-performing stock out of 3229 companies on the NASDAQ in the year 2003. But the competition started taking its toll on Ask as well and soon the company was on the lookout for a partner and in July 2005 Ask Jeeves Inc was acquired by IAC /InterActiveCorp. Subsequently in February 2006, the Jeeves character was sent home from Ask Jeeves and the search Engine re-launched as Ask.com and the company is renamed as IAC Search & Media. Mission Statement AltaVista's mission is to provide information access to the global community. The company indeed expressed its dedication in setting standards for search technology and for finding information on the net. Ask Jeeves on the other hand has been working with a missionary zeal, but the company did not think it fit to have a mission statement. The company has evolved over the years with multifaceted search engines for a range of segments like at present the IAC Search & Media's search and search-based portal brands include: Ask.com, AskforKids.com, Bloglines.com, Evite.com, Excite.com, FunWebProducts.com, iWon.com, and MyWay.com. Key Performance Indicators AltaVista provided the first multilingual search engine on the internet. It was the first Internet search engine to launch Image, Audio, and Video search capabilities6. AltaVista has been awarded 61 search-related patents, since its inception in 1995. Though both parted ways after some close collaboration, still Yahoo Inc. uses AltaVista.com, to experiment with processes like livesearch, a feature that will start suggesting search terms for the web-surfer whenever he/she types just one letter (Vascellaro, 2007). AltaVista's holding company Fast Search & Transfer ASA is one of the leading players in the enterprise search market. The company experienced a growth rate of 18% in fiscal 2003 (Datamonitor, 2006). Ask.com has also been experimenting with newer techniques for quite some time, trying in their best manner to take on the biggies like Google, Yahoo and MSN. In December, 2006, Ask.com launched Ask X. This version will chop up the results page into a three panel format. Standard search results on the left are supported by some terms to help in narrowing or expanding the search and, on the right, results were broken down into categories like news and dictionary results. IAC Search and Media's international operations are based in the UK, Europe and Japan. The general public had very high hopes from Ask Jeeves, as it promised to provide search options promising to respond to questions phrased in natural English instead of the keywords or precise Boolean expressions that other search engines require. When Ask Jeeves went public on July 1, 1999 its shares almost quintupled (Armstrong, 1999). Strategic Operations Issues AltaVista Co started out as a promising and most respected search engine, but there was gradual decline in its popularity. The then AltaVista chief scientist Jan Pederson once said, "There was a period when AltaVista was in the position Google is now. Then there was a drift in the company, a lack of focus - the portal strategy." (Datamonitor, 2002). A highly respected search engine working to become a strategic portal, AltaVista waged an un-winnable war against the likes of Yahoo!, AOL and MSN, only to be comprehensively displaced by Google to take its crown. On the other hand Ask Jeeves kept the momentum for much more time with focused approach towards placing the search technology at a higher pedestal. In a study on 'Enterprise Search Technologies' Datamonitor (2003) Jeeves solutions was found to be the most promising search solution with an eye on future. For this study Datamonitor surveyed eight enterprise search vendors' products including EasyAsk, Mercado, Endeca, FAST Search, iPhrase, Verity and InQuira. When 'Fast Search & Transfer ASA' took over AltaVista from Overture, the deal involved five employees, 200 customers and a small amount only. Majority of the intellectual property remained with Overture. On the other hand when Ask Jeeveas was acquired in 2005, it did so on its own terms and conditions with about 42 million unique users. Online Media conglomerate InterActiveCorp acquired it for $1.85bn with a stated objective of providing growth to the advertising revenues for both. Ask Jeeves has a strategic tie up with Google, as it uses Google's sponsored search service to generate much of its revenue. This deal is to be reviewed in 2007, which has all the potential of being strengthened further even after 2007. Some of the prominent customers of Ask Jeeves are Ford, Nike, British Telecom, Visa, Roche etc. For a business to operate successfully, Terry Hill, a professor at London Business School has come out with terms like Order Winner (O/W) and Order Qualifier (O/Q)7. Terry suggest that for marketing and operations are two integral components of business operations and therefore an active interface between these two is required for being successful in business. Order winner and order qualifier describe the market orientation of the company for successfully taking on the competitors. The criterion which differentiates the product or service of one company from another is termed as order winner. For Ask Jeeves the order winner criteria has been its ability to understand natural language and come out with answers to direct questions. Order qualifiers are the criterion which the customer or the user considers before using the product or service. This is where both AltaVista and Ask Jeeves fail in their strategies. The user places search engines like Google and MSN ahead of these two, for the simple reason that AltaVista and Ask Jeeves could not do the requisition value addition. The order winning and order qualifier criteria keep changing with changes in technology, changes in user requirements etc. Configuration of Operations-Three Key Points i. Two of the fierce rivals in search engine business are Yahoo and Google. While AltaVista has a strategic tie up with Yahoo, Ask has been working in close coordination with Google. This helps not only the two minor partners but the two major partners as well, as it bring to them more customer base, premium customers, traffic and also helps in devising competitive strategies with better focus on competitors. ii. While AltaVista used the technology of Boolean operators for carrying out the searches, Ask Jeeves started out with Lexical operators. This made the searching job a lot easier, particularly for those who are not thorough computer professionals. Using the lexical method large number of documents that result from a search (like that of AltaVista) are subjected to a new search using an operator which further capitalizes on natural language constructs by extracting only the paragraphs that render information relevant to the query (Moldovan & Mihalcea, 2000). iii. AltaVista was developed in 1995 by Digital Equipment Corporation in its Palo Alto research labs. It was considered a powerful search engines mainly on the basis of; the amount of information available on its searches and the complex Boolean searches available through its advanced search function. Though it attempted to include functions like Tracer, which remembers the last query, but AltaVista tended to become stale without regular upgradation, Ask Jeeves on the other hand started off a year later in 1996 with lexical features. But its forte was the regular amount of input for upgrading the search engine. For example ask jeeves also included the feature of reducing the smart search function, followed by efforts to reduce the number of clicks required to find the information, the "binoculars" function which allowed users to view a thumbnail preview of a searched page and bouncing back and forth between pages and results (Moldovan & Mihalcea, 2000). Problems encountered Operations management and operations strategy adds value to such services and products. Organisations adopt different types of strategies to grow in a business. These could involve trying out different types of market-product combination, carrying out the business according to a certain sets of principles, segmenting the market in their own way, or relying on the feedback of customers for shaping the final output. Operations management is in general concerned with the coordination and management of people, processes, technology and other resources in order to produce goods and services. AltaVista remained with experimentation syndrome for quite a while with frequent change of guard from Digital equipment to Compaq to CMGI Inc. to Overtures to fast Inc and so on. This did not allow adequate focus on the subject. Thus the search engine at times, appeared in a unique position of allying with the rival or rivaling the ally. This not only resulted in loss of revenues, but it also distracted the committed users of the search engine. In fact when Fast Search & Transfer ASA bought AltaVista in 2003, it sought to discontinue the use of AltaVista and instead encourage users to migrate to Fast software (Datamonitor, 2003a). AltaVista therefore has had the unenviable task of competing with the likes of Google while suffering from a severe resources crunch under a holding company which remained more concerned with selling off assets and cutting costs than developing a quality product for taking on the competition. Ask Jeeves on the other hand started out in the company of couple of venture capitalists and remained a strategic buy on account of regular value addition inputs, despite being a loss making proposition for couple of years. Ask Jeeves' internally created image index which incorporated ranking and clustering algorithms based on "Zoom-related" suggestions for image searching. Zoom is Ask Jeeves' proprietary concept for clustering results into topics (Datamonitor, 2006a). Ask Jeeves already has an image search capability built into its core Smart Answers question-and-answer engine which lets users search across the Web by posing questions in plain English rather than quirky Boolean syntax. Owing to sustained urge for innovation the company was able to struck deals even with its rivals like Google. Conclusions and Recommendations From the preceding analysis it is quite clear that AltaVista and Ask required the necessary will power and resources to match their ability with their present day competitors. Though some amount of value addition is being done by Ask like providing email service, but the way Google, Yahoo and Hotmail are fighting it out, things appear to be headed towards even more fierce competition ahead. Today the user of these free email services can enjoy about 1GB of storage space for their emails, with promises of much more. Google has established quite a niche for itself on the horizon. Starting form a search engine the portal has now on offer Google earth, for provide satellite images of different parts of earth; Google broadcasts, for providing streaming webcasts etc. The road therefore appears even tougher for the likes of AltaVista and Ask. In order to sustain both these websites will have to provide fresh input of resources. Technology coupled with logistics will form the cornerstone of such a strategy. Moreover, for being noticed and for attracting more number of clicks and more visitors to their site, these websites will have to indulge in marketing communication. Traditional marketing mix concept, first proposed by McCarthy in 1960, consisted of Product, Price, Place and Promotion (better known as the 4Ps), but there are many more dimensions to it now. Public opinion about the product or service is one such dimension. For a search engine it appears quite obvious that 'place' remains the internet, but in order to make the customer/ web-surfer opt for that place, the companies will have to attract eyeballs by being present near their houses, offices, playgrounds, railway stations, shopping complexes etc. This calls for promotion. In order to build public opinion, quite often companies have to go in for ambush marketing. To what extent both these companies can take on the might of biggies will be worth watching. Reference 1. Armstrong, Larry (1999). This Butler Didn't Do It., Business Week, 08/02/99, Issue 3640. 2. Datamonitor (2006). Company Profile: Fast Search & Transfer ASA. Datamonitor Americas, New York. 3. Datamonitor (2006a). Ask Jeeves sharpens up image. Datamonitor Americas, New York. Published: 26 Jan 2006 4. Datamonitor (2002). AltaVista returns from the wilderness. Datamonitor Americas, New York. Published: 12 Nov 2002. 5. Datamonitor (2003). Update - Jeeves Solutions: reading the questions. Datamonitor Americas, New York. Published: 11 Mar 2003 6. Datamonitor (2003a).Fast to discontinue AltaVista software after acquisition. Datamonitor Americas, New York. Published: 18 Jun 2003 7. Internet usage statistics, http://www.internetworldstats.com/stats.htm 8. Lowson, Robert H, 'Strategic Operations Management: The New Competitive Advantage.' Routledge, London 9. Operations Managemetn Theory. "Order Winners And Qualifiers: The Marketing Operations Link". Available online at http://www.operationstheory.com/order_winners_qualifiers.html (Apr 18, 2007) 10. Moldovan & Mihalcea, (2000). Using WordNet and Lexical Operators to Improve Internet Searches. IEEE Internet Computing, January - February 2000. 11. Riggs, Colby (2005). "New Technologies: A new reference search service and a couple of web browsers." Library Hi Tech News Number 3, 2005. Emerald Group Publishing Ltd. 12. Vascellaro, Jessica E. (2007). "In Search of . . . Better Ways to Search; Google, Microsoft, Ask.Com Quietly Use Spinoff Sites To Test New Features, Solicit Feedback; Pulling Up Videos". Wall Street Journal. (Eastern edition). New York, N.Y.: Jan 17. Read More