March 2006, rev August 2009A couple days ago I found to my surprise that I'd been granted apatent.It issued in 2003, but no one told me. I wouldn't know about itnow except that a few months ago, while visiting Yahoo, I happenedto run into a Big Cheese I knew from working there in the latenineties. He brought up something called Revenue Loop, which Viawebhad been working on when they bought us.The idea is basically that you sort search results not in order oftextual "relevance" (as search engines did then) nor in order ofhow much advertisers bid (as Overture did) but in order of the bidtimes the number of transactions. Ordinarily you'd do this forshopping searches, though in fact one of the features of our schemeis that it automatically detects which searches are shopping searches.If you just order the results in order of bids, you can make thesearch results useless, because the first results could be dominatedby lame sites that had bid the most. But if you order results bybid multiplied by transactions, far from selling out, you're gettinga better measure of relevance. What could be a better sign thatsomeone was satisfied with a search result than going to the siteand buying something?And, of course, this algorithm automatically maximizes the revenueof the search engine.Everyone is focused on this type of approach now, but few were in1998. In 1998 it was all about selling banner ads. We didn't knowthat, so we were pretty excited when we figured out what seemed tous the optimal way of doing shopping searches.When Yahoo was thinking of buying us, we had a meeting with JerryYang in New York. For him, I now realize, this was supposed to beone of those meetings when you check out a company you've prettymuch decided to buy, just to make sure they're ok guys. We weren'texpected to do more than chat and seem smart and reasonable. Hemust have been dismayed when I jumped up to the whiteboard andlaunched into a presentation of our exciting new technology.I was just as dismayed when he didn't seem to care at all about it.At the time I thought, "boy, is this guy poker-faced. We presentto him what has to be the optimal way of sorting product searchresults, and he's not even curious." I didn't realize till much laterwhy he didn't care. In 1998, advertisers were overpaying enormouslyfor ads on web sites. In 1998, if advertisers paid the maximum that traffic was worth tothem, Yahoo's revenues would have decreased.Things are different now, of course. Now this sort of thing is allthe rage. So when I ran into the Yahoo exec I knew from the olddays in the Yahoo cafeteria a few months ago, the first thing heremembered was not (fortunately) all the fights I had with him, butRevenue Loop."Well," I said, "I think we actually applied for a patent on it.I'm not sure what happened to the application after I left.""Really? That would be an important patent."So someone investigated, and sure enough, that patent applicationhad continued in the pipeline for several years after, and finallyissued in 2003.The main thing that struck me on reading it, actually, is thatlawyers at some point messed up my nice clear writing. Some cleverperson with a spell checker reduced one section to Zen-like incomprehensibility: Also, common spelling errors will tend to get fixed. For example, if users searching for "compact disc player" end up spending considerable money at sites offering compact disc players, then those pages will have a higher relevance for that search phrase, even though the phrase "compact disc player" is not present on those pages.(That "compat disc player" wasn't a typo, guys.)For the fine prose of the original, see the provisional applicationof February 1998, back when we were still Viaweb and couldn't affordto pay lawyers to turn every "a lot of" into "considerable."
