The Economics of Surfing

Eytan Adar and Bernardo A. Huberman
Xerox Palo Alto Research Center,
Palo Alto, CA 94304
{adar, huberman@parc.xerox.com}

Introduction

Over the past four to five years we have seen the appearance of several important WWW services for electronic commerce, of which a relatively new instance are the portal sites. Some important examples are Yahoo, Excite, and Lycos. Portals attempt to act as a starting point for users on the web and therefore lead consumers to electronic commerce activities, such as travel and consumer electronics. Portals are in fact second generation services, and are essentially a refinement of the web search engine service.

The business model of portal services consists of two parts. The first one is to have the consumer buy goods directly from the portal or through a partner site. The other strategy involves satisfying the user's information needs locally and in the process present advertising banners that result in direct revenues to the portal.

While this model seems to have worked for various companies, it is highly paradoxical in the sense that it confronts the portal with a dilemma. On the one hand, the service strives to generate better and faster results for the users. However, if the results are presented at the entry point, leading users to another site, there is an opportunity cost for the provider. The user never travels deeply into the site, thus missing the advertising and consumer goods that he potentially could buy.

A recent heuristic solution to this problem resorts to the notion of stickiness, whereby the provider attempts to keep consumers at their site by displaying potentially attractive links that only point into their site. This is much in line with standard marketing practices in the physical world. An alternative solution, which we here explore, attempts to capture the existence of different surfing patterns in order to solve this dilemma. Instead of blocking surfing paths, one increases the depth to which users surf when accessing an e-commerce provider.

We show that depending on the domain of inquiry, users display different and regular patterns of surfing users when accessing different kinds of information goods or services. This difference can be exploited in order to benefit information providers. We propose mechanisms for implementing temporal discrimination in surfing by dynamically configuring sites and versioning information services. This is done by exploiting the fact that surfing patterns are extremely regular and described by a universal law [Hu97]. We also propose mechanisms for extracting consumer surplus by dynamically configuring sites and versioning information services.

Experiments on surfing behavior.

While an aggregate demand curve seems indicative of different user preferences in accessing information, it is of interest to know whether or not specific surfing patterns depend on the information being accessed. In order to answer this, we ran a set of experiments on user logs provided by a large web portal and Excite.

The web portal data used in this study consisted of anonymized usage logs for an eleven day period between September 14, 1998 and September 25, 1998. The data set contained over five million impressions, or page views, generated by over five hundred thousand unique visitors. The initial results of separating surfing patterns by high level categories is illustrated in the figure below. These results demonstrate the difference in surfing patterns exhibited by users accessing information in different domains. The three curves correspond to rate at which surfers complete their task in three high level domains.


In 1997 Excite provided the research community with a small, anonymized usage log, containing over fifty thousand page views from over ten thousand unique visitors. The log entry contained the unique user id, a timestamp, and the query terms applied to search engine. Each entry provides an indication that the user viewed a single result page containing, by default, ten matches. Similar results to the portal category seperation were obtained for the Excite query logs based on a separation of queries by adult versus non-adult content. Users seeking adult information tended to display longer surfing paths than any users seeking any other information. This In both cases we observed a strong separation of the surfing behavior depending on the domain surfed.

Applications

We propose three specific strategies that can be used to extract maximum surf depths from consumers exploring a portal.

References

  1. [Hu97] Bernardo A. Huberman., Peter L. T. Pirolli, James E. Pitkow, and Rajan M. Lukose, "Strong Regularities in World Wide Web Surfing,"Science, April 3, 1997, 280(5360), pp. 95-97.
  2. [Sa68] G. Salton, and M. E. Lesk, "Computer Evaluation of Indexing and Text Processing", Journal of the Association for Computing Machinery, 1968, 15, pp. 8-36.
  3. [Va99] Hal R. Varian, "Market Structure in the Network Age", in Understanding the Digital Economy, Department of Commerce, Washington, DC 1999.
  4. [Wi93] Robert B. Wilson, Nonlinear Pricing, Oxford University Press, 1993.
Further information on this work is available at: http://www.parc.xerox.com/istl/groups/iea/www/econsurf.html.