Sunday, June 14, 2009

Wolfram Alpha - A Closer Look at its Business Model

Wolfram Alpha, released on May 15th 2009, is an answer engine designed by Wolfram Research. This new engine answers factual questions directly instead of providing a list of websites that may have the answer. It derives answers from a core knowledge base of data. This method is similar to the way Google answers mathematical questions, but Wolfram Alpha searches a larger range of data. Although it has been frequently compared to Google, in reality it is fundamentally different. It would be more appropriately labeled an answer machine rather than a search engine. In many ways, Wolfram Alpha is more likely to compete with Wikipedia than Google.

Wolfram's business model contains much ambiguity. Apparently, Wolfram Research intends to sell subscriptions to advanced users who want to integrate their data with the Wolfram database. This strategy alone does not have the potential to produce another Google. There are simply not enough advanced users to generate revenues comparable to Google. This is why Wolfram also sells display ads, although it is unclear how advertisement works on the site and how this will generate enough revenue. On Wolfram's faq page, they state they are "concentrating on major corporate sponsorships" and not targeted advertising. Wolfram was initially designed purely for academics. If it plans to generate revenue through any form of advertisement, it must develop a larger network.

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