Northern Light to Focus on Enterprise Customers, Will Discontinue Free Public Web Search
Paula J. Hane
Posted On January 14, 2002
Northern Light Technology (NL) announced that it has decided to focus more exclusively on the needs of enterprise customers and, as of January 16, it will no longer be providing free Web search capabilities to the general public. Northern Light's Special Collection, an online library of full-text content from more than 7,100 sources, will continue to be offered on a pay-per-view basis to the public from NL's Web site (http://www.northernlight.com). The company's exit out of the general Web search field leaves the competition open to leaders like Google and FAST's AllTheWeb.com—both of which continue to offer a stream of enhancements and improvements to their services—with others like Teoma nipping at their heels.
For those of us dismayed at losing a favorite Web search engine, the good news, according to Camille Roberts, Northern Light's director of marketing communications, is that current news search (with 56 news wires and 2 weeks of news) and Search Alerts for news will still be available for free, as will the topics in the Special Editions. The Power Search and Business Search features will still be offered but will only search the Special Collection. For now, GeoSearch and Stock Search will still be available for the public and for enterprise customers. When asked if there would be a subscription or fee-based option for serious individual researchers to use Web search, Roberts replied that there were no plans to provide access to it outside of enterprise accounts. However, the company will be making a subscription option available to the public for searching the Special Collection, as well as pay-per-view.
One interesting tip: Non-enterprise clients who already have Search Alerts in place (set up before January 16) that search the Web in addition to the Special Collection will continue to retrieve Web results for free. And there are no current limits on the number of alerts that can be run. Hint, hint.
Northern Light will continue to maintain and update its index of Web pages—now over 350 million—and enterprise customers will still be able to search both the Special Collection and the Web. In addition, Northern Light offers custom Web searching for enterprise customers. According to the announcement, none of the more than 100 custom Web crawls running for Northern Light's enterprise customers will be affected by the discontinuation of free public access to the Web index.
David Seuss, Northern Light's CEO, explained that the company's decision to focus on its core business was based on customer demand and financial considerations. "Over the past year, Northern Light has seen booming demand for search, classification, taxonomy, and content solutions from our enterprise customers and marketing partners. Indeed, our sales bookings in the quarter ending in December 2001 were double the previous quarter. Meanwhile, the business model for free, advertising-supported public Web search has not been developing for us. We made a strategic decision to discontinue free public access to our Web search in order to focus resources and investment on those parts of our business that are growing rapidly."
Discontinuing the free public Web access will allow Northern Light to lower the cost of maintaining the site, which, according to a company spokesperson, receives 1.4 million queries a day (of both the Web and Special Collection content). This volume of activity has put a drain on server resources that will now be better allocated and result in operational savings—and that can be used to attract more business customers. According to Seuss, revenues from the ad-supported site have been flat and only accounted for about 20 percent of the company's business. Though this was better than many sites experienced, he said it was "not good enough."
The majority of Northern Light's business (80 percent) comes from sales to the enterprise—and not just of content, as some might assume. Seuss pointed out that selling content was in fact secondary to selling the Northern Light technology and platform to enterprises and portals. The company does license the Special Collection content to these markets, but the emphasis is on selling a range of search and content-integration services. Products include RivalEye, which offers a customized competitive intelligence micro-site, custom search solutions, and a Search Toolkit for site search capabilities. The company's SinglePoint product allows enterprise users to search the Web; the Northern Light Special Collection; current news; internal content; and licensed content, such as market research, with a single query. While Northern Light has serious competition for the enterprise market from companies like Factiva, LexisNexis, Dialog, and other search technology vendors, it believes it offers a unique bundle of services with its highly regarded technology platform.
With sales picking up and the refined focus on enterprise clients, Seuss is optimistic about the company's growth last year. In another cost-cutting move, Northern Light dropped its sponsorship of the Indy Racing League (IRL) on January 7. The company had signed a 5-year agreement with the IRL 2 years ago, but has decided to end the sponsorship because of financial concerns. The racing deal had involved $50 million over the 5 years, so the savings to the company will be considerable.
Northern Light also announced an important partnership with In-Q-Tel (http://www.in-q-tel.org) to provide a multiple-language search service for the U.S. government. In-Q-Tel is an independent, private, nonprofit company chartered by the CIA whose principal objective is "to identify and deliver the next generation of information technologies to support the CIA's critical intelligence missions." Once the advanced search system is developed to handle multiple languages and different character sets, Northern Light will be able to use the technology for other clients.
News of the discontinuation of free Web searching has prompted a range of reactions, from disappointed to understanding. Richard W. Wiggins, an information technologist at Michigan State University, called it a "bombshell" for the searcher community. But he said; "Northern Light aspired to deliver two very different services in one: free access to free Web content and for-fee access to commercial journal content. Their model appealed greatly to librarians and other savvy searchers, but was little understood by the public at large. They are probably wise to cede general Web searching to Google and the also-ran general search engines."
Marydee Ojala, editor of ONLINE magazine, also pointed to the dual business model. She said: "Northern Light has long had an identity problem. Was it a general Web search engine, like Google or AltaVista, or was it a business research tool, like Dialog or Factiva? Its latest move suggests it decided in favor of business research. No more free Web searches, but the paid portion, Northern Light's Special Collection, will still be available to the casual Web user who has no enterprisewide contract with Northern Light. Inside the enterprise, this presents wonderful opportunities to information professionals, who can explain what an in-house implementation of information products offers in contrast to doing it yourself on the external Web."
Amelia Kassel, a researcher and Internet trainer, expressed some concern about the loss of the public Web search engine, even though she has become somewhat disappointed with Northern Light's search results in comparison to Google's. She said: "We're left with two, maybe three, major, viable players for larger search engines as the others have disappeared or fizzled out. NL was a good competitor, and yes, I feel a sense of loss, but I'll get over it.… I do have a ‘what if' question in the back of my mind: What if all the search engines disappear and we revert to the early Internet? How will anything be found on the Web? A new world order will begin. We have yet to see what that will look like."
Northern Light started its research-and-development efforts in 1995 and launched its search service in August 1997. Its patented content classification, Custom Search Folders, and integration of Web and proprietary content made it stand out in the Web search arena. As it added content, precision search enhancements, and a real-time news search capability, the search service garnered official recognition and loyal users, including many seasoned searchers and librarians. In the last several years the company has moved to bolster its enterprise offerings, concentrating on search and content-integration solutions.
Northern Light, based in Cambridge, Massachusetts, is still privately held after scrapping the idea of a possible IPO a few years ago when market conditions turned sour. On October 31, 2001, the company secured financing of $20 million in an investment led primarily by former Microsoft chief software architect Gregory Whitten, who now serves as Northern Light's chairman of the board.