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AOL may chip away at Ask Jeeves, local guides

America Online may use a development model similar to the one used for its Open Directory of Web sites to create a local restaurant guide and a Web site to compete with Ask Jeeves, sources say.

Convinced it has a hit with its Open Directory of Web sites, America Online is considering using a similar development model to create a local restaurant guide and a natural-language query database to compete with Ask Jeeves, sources say.

Netscape declined to comment on its plans regarding the restaurant guide or the natural-language query system but confirmed that it is looking into other ways to exploit the Open Directory.

"We cannot confirm that we're working on any projects like those you described," a spokesperson said. "However, we can say that we've been exploring the idea of broadening the kinds of things we catalog."

A move by AOL into either restaurant guides or natural-language queries could spell trouble for companies that pay editorial staff to create content and sell the results to other firms. Those companies could see their corporate customers defecting to a free alternative with a volunteer army of an editorial staff behind it.

The Open Directory is a so-called open-development project, analogous to the type of "open source" software development projects that gave rise to the Linux operating system and the Apache Web server.

Under an open-development model, people volunteer their labor to create the product--in Open Directory's case, a directory of Web sites--and in return, the project's organizer provides the finished product under a free license to whoever wants to use it--including competing companies.

Many open-development projects launched by corporations have stalled, failing to rally volunteers the way the grassroots Linux and Apache efforts have. But Open Directory, acquired under the name NewHoo by Netscape Communications before AOL acquired Netscape, has proved to be one of the Internet's most successful open-development projects with corporate roots.

When Netscape acquired NewHoo in November 1998, the project had 4,700 contributors and catalogued 84,000 Web sites. By October there were 16,500 contributors and 1 million Web sites.

Perhaps more significantly, some of Netscape's and AOL's fiercest competitors have validated the idea by adopting the Open Directory, which is the default directory on AOL's proprietary online service as well as AOL.com, Netscape's Netcenter, Lycos, Lycos's search site HotBot, AT&T WorldNet, AltaVista, InfoSpace, and more than 100 other sites, according to Netscape.

Sources said the restaurant guide could launch in the next few months, and the natural-language query service could launch further down the road. Sources also said that both ideas are in the conceptual rather than planning stages at this point.

Critics have warned that volunteer efforts on behalf of corporate entities run the risk of violating labor laws, and AOL has encountered both a class-action lawsuit and a Labor Department inquiry regarding its use of volunteers for the AOL service. But sources said that the Open Directory was not included in the Labor Department's probe.

Look out: Here comes AOL
Analysts cite the success of the present Web site directory as evidence that both city guides and firms that provide natural-language query products may have to watch their backs if the Open Directory treads on their turf.

"I would be a bit nervous if I were Ask Jeeves, because they're charging for it," said Danny Sullivan, editor of SearchEngineWatch.com. "It's the same reason people like [Web site directory provider] LookSmart should be nervous about Open Directory."

A natural-language query product from Open Directory could threaten Ask Jeeves's consumer business, but it would be unlikely to hurt the company's corporate business, analysts said. In addition to the query product available for general use on the firm's Web site, Ask Jeeves provides corporations including Dell and Microsoft with query products tailored to their Web sites.

Ask Jeeves said that 65 percent of its revenue comes from the consumer side, and 35 percent comes from the corporate side. The company's goal is to even that out to half and half. One of Ask Jeeves's corporate customers is Netscape's Netcenter site, which uses the query product for its Kids & Family channel.

Ask Jeeves said that it expects competition to materialize from numerous fronts, but that it believes that its brand and its editorial system will prevail in the marketplace.

"One of the questions in natural-language query is how you monitor the quality of the answers," said Ask Jeeves spokeswoman Heather Staples. "We're maintaining the editorial process--the standard editorial function like what you have at a magazine."

Staples added that Ask Jeeves is considering adding another layer to its editorial staff: a team of experts to submit questions and answers and to review those already submitted.

One option for Ask Jeeves, should the Open Directory produce a successful query system, would be to use the Open Directory under a free license. Staples wouldn't rule out such a scenario, saying that the company has always evaluated options for improving the service.

City guides could find themselves faced with a similar choice if Open Directory moves ahead with its restaurant guide or other local content offerings. Restaurant guides are among the hottest offerings at city guides, which include Ticketmaster Online-CitySearch and AOL's Digital City.

"Restaurants and dining are a strong and popular part of our service, either No. 1 or No. 2 in what people look for," said John Pleasants, president of ticketing and transactions for Ticketmaster Online-CitySearch. "It makes complete sense that they would want to expand their offerings in that direction. Local information has not yet had its day. We're in growth mode."

Pleasants shrugged off the potential threat from an open-development restaurant guide, citing his site's "editorial voice" as a distinguishing characteristic. He also said that CitySearch would be taking steps in coming weeks to provide reservation capabilities through the Web site. He added that the company is looking into letting readers contribute their opinions side by side with editorial reviews.

SearchEngineWatch.com's Sullivan expressed skepticism that the restaurant guide would inspire the kind of participation that the Web site directory has or that the query project might, calling it a "strange fit."

Analysts agreed, saying that unless it wants to repeat recent mistakes, Netscape is going to have to think carefully about what kinds of projects are likely to inspire volunteers.

Netscape's open-development effort before the Open Directory, the Mozilla.org effort to develop the Communicator browser, is credited with bringing the open-source development model to mainstream attention. But that effort has stalled in attracting outside developers, with most of the work coming from within Netscape itself.