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Compete, Inc. Redefines Search Engine Loyalty In New Report

Latest Spark! Advisory Finds Loyalty Among Existing Users Critical to Driving Future Growth

Boston, MA - February 21, 2006 - Compete, Inc. today announced the availability of its latest Spark! research advisory, "Searching for Loyalty: Why Focusing on Market Share Won't Cut It." In this edition of Spark!, Compete utilizes a newly developed search framework to demonstrate that search engines can grow their volumes by gaining a better understanding of the behavior of their own users. Compete finds that while shifts in market share have slowed, consumers still use multiple search engines, representing a significant revenue opportunity out of establishing stronger searcher loyalty. The complete advisory can be found online at http://www.compete.com/research/spark.xtp.

"For most search engines, over 70 percent of the web searches that their own users submit online are actually made on competitor sites," said Gregory Saks, Senior Associate at Compete. "We found that having a share-of-wallet perspective of how consumers distribute their search queries directly identifies the most relevant growth opportunities, and is a necessary part of increasing search volume and sponsored ad revenues."

To address the need among search engines to better understand their users, and among financial analysts to assess growth opportunities and risks for these companies, Compete developed a new share-of-wallet based framework called Share of Search ActivityTM (SOSA). The SOSA framework segments out the consumers who use each search engine, and then quantifies their search behavior across all engines. This approach provides a unique lens into searcher loyalty, and actionable insights for any search engine regardless of market share.

Compete benchmarked Share of Search Activity performance across the industry. Select key findings include:

• Traditional search market share is entirely different from Share of Search Activity. Excite, a smaller engine that has a web search market share of less than 1 percent, in turn has a SOSA of 23 percent. The remaining 77 percent are queries that are conducted specifically by Excite users, but instead are submitted on competitor search engines. Capturing just another tenth of its users' search activity would lead to a near 50 percent growth in query volume and search ad revenues for Excite.
• Google, the market share leader in search, also leads the market in SOSA at 71 percent. While this is an industry best, it identifies the growth opportunities that every engine needs to focus on; nearly a third of all the web searches submitted by Google users are performed on competitor engines.
• It isn't just the dominant search engines who pose a threat to each other. Users of Amazon's A9 have established relationships with a variety of other engines. A9 captures a SOSA of just over 6 percent, with Google, Yahoo, MSN, AOL, Ask, Dogpile, Altavista, and others each controlling a large share of the remainder. Each of these engines is a threat to the growth and success of Amazon's A9 platform.

The latest Spark! also includes information and tips on how search engines, search analysts, and search marketers can leverage the SOSA framework to drive growth, develop a more informed investment opinion, and determine how to optimize search marketing spend.

Spark! is a research series providing brands with the insight and information they need to better target consumers and enhance overall marketing effectiveness. It reports the latest research, trends and data impacting the financial services, wireless, travel and automotive industries. To sign-up to receive Spark!, go to http://www.compete.com/contactUs.xtp.

About Compete

Compete, Inc. extends online market research to transform the way consumers and brands communicate. By combining permission marketing, predictive analytics and the industry's largest consumer behavior database, Compete helps marketers identify and reach their target consumers. Compete delivers conversant marketing solutions that increase profitability and customer loyalty and result in measurable and effective marketing programs. Compete delivers these solutions to leading brands such as Carlson Hotels Worldwide, DaimlerChrysler, Hyundai Motor America, Teva Neuroscience, Toyota Financial Services and Upromise®, among others. Compete is headquartered in Boston, Massachusetts, with offices throughout the US. For more information, please visit http://www.compete.com.