Goodsearch Inc.

Core Business:

A search engine that donates half its revenues to non-profit organizations chosen by users


Goal:

To help thousands of causes while building a business

Driving Force: Growth of search engine advertising and the budget squeeze at non-profits

For people who have a favorite charity but no money, Ken Ramberg has the answer: A search engine that pays the non-profit every time a user conducts a search.

From the user’s perspective, Goodsearch.com works like any other search engine. In fact, the site runs on algorithmic technology licensed from Yahoo Inc. But 50 percent of the site’s revenues equal to about one penny per search goes to a non-profit organization that the user designates.

“The key to GoodSearch lies in its simplicity. We have taken something that people do every day and turned it into doing something good,” said Ramberg, who previously founded JobTrak, now a division of monster.com.

Goodsearch Inc. currently has 28,000 participating organizations, ranging from large nationals like United Way and the Cystic Fibrosis Foundation to universities to local animal shelters and schools. The company receives more than 150 submissions daily from organizations applying for a listing.

Two elements of its business model make Goodsearch stand out as an innovative company. First, the deal with Yahoo essentially makes Goodsearch a niche partner that funnels traffic to the giant search portal. All the content search results and ads as well as all revenues come from Yahoo.

“It wasn’t easy to get this partnership with Yahoo, but based on my track record and long-standing contacts going back to the mid-1990s, they did it,” said Ramberg. “And it has worked out well for them in terms of positive image and branding.”

However, as part of the deal Yahoo has a strict non-disclosure agreement. Ramberg declined to reveal his site’s traffic figures, revenues or even number of employees. He said “under a dozen” people work at offices in West Los Angeles and New York.

The second innovation involves how Goodsearch has harnessed the non-profit organizations to promote the site. Since search-engine marketing is a numbers game, the more people who designate a specific non-profit, the more money the organization receives. So the organization has a financial incentive to turn membership fervor into page-views by trumpeting Goodsearch through newsletters, events, and its Web site. “They are the marketing arm of this company,” said Ramberg.

Although non-profits benefit from Goodsearch, the company itself is a for-profit venture. The company describes itself as “a search engine with a unique social mission,” and likens its sense of mission to Ben & Jerry’s Homemade Inc., which donates at least $1 million annually to charity; Ventura-based Patagonia, which supports environmental causes; or Starbucks’ Ethos Water, which funds clean water projects.

For users, Goodsearch offers the chance to feel supportive of a charity or alma mater without dipping into their wallet.

“If you’re getting the same search quality at work or when looking for a place to eat, why not give to somebody who has nothing to eat?” asked Jon Herson, a Calabasas resident and frequent Goodsearch.com user. “This is perfect for me and my generation. This is like seeing color TV before it came out a revolution in charitable giving.”

To generate traffic Goodsearch must compete against familiar search giants such as Google and Ask.com.

“The biggest challenge for Goodsearch comes down to user experience,” said Gord Hotchkiss, president of Enquiro Search Solutions Inc. and chairman of the Search Engine Marketing Professional Organization. “We go to a search engine to accomplish a task, to find a piece of information. Giving to charity is certainly not a primary objective. In my opinion, it wouldn’t be enough to cause me to use a different search engine.”

The Internet’s brief history doesn’t bode well, either. Other companies offering incentives to users, such as iWon, which gives chances to win cash prizes, haven’t lured many users away from the big engines.

“Ironically, Microsoft is one that has tried both giveaways and charity as an incentive to use their search engine. In neither case was it successful,” said Hotchkiss.

Herson, 24, had a blood clot in his lung two years ago and spent weeks on the edge of death, leading to a new interest in philanthropy. His conversion sounds similar to Ramberg’s experience: He started Goodsearch in 2005 after his mother died of cancer. His sister JJ Ramberg, a former news reporter with CNN and MSNBC, is the other co-founder of the company.

In addition to business savvy, both siblings brought a solid grasp of non-profits to the venture. Ken Ramberg serves on the board of Phase One, a cancer research organization. Locally, he serves on the advisory board at Venice Family Clinic, the largest free medical clinic in the nation. His sister has worked with micro-finance organizations in Uganda and India.

“Having sat on a number of non-profit boards, we recognized that charitable organizations very often have a difficult time raising funds year-in, year-out,” said Ramberg. “When we learned that Internet search engines earn close to $6 billion in advertising revenue yearly, the idea for GoodSearch was hatched.”

To participate in Goodsearch, non-profits must first register at the site under their official name. The range of non-profits includes charities, hospitals and clinics, political organizations, trade groups, churches and even government agencies. After staffers at Goodsearch verify a group’s non-profit status, it joins the database. The site issues a check to the non-profit once every year, provided the accumulated search credit tally to at least $20.

L.A.-based organizations in the database include homegrown non-profits such as the Jewish Federation, Children’s Hospital Los Angeles, KCET-TV (Channel 28) and the Church of Scientology. Six groups connected to UCLA and three from USC appear on the list. In terms of size, the selection ranges from breed-specific dog clubs and neighborhood churches to local chapters of non-profit brand names such as United Way, Red Cross, Society for the Prevention of Cruelty to Animals and Habitat for Humanity.

Users at the site can’t deduct their donations on their taxes, since the money actually comes from advertisers. Users can’t even see how much money their searches have generated. However, they can check to see how much money a particular non-profit has accumulated on the site by clicking the “Amount Raised” button on the homepage.

Herson tries to change the institution receiving benefits from his searches every week, based on the idea that many groups need help now with disasters such as Hurricane Katrina and the Southeast Asia tsunami relief efforts having absorbed so much money. Besides the cash, he likes how Goodsearch also raises awareness about non-profits that need offline donations, too. He calls Goodsearch users “the philanthropists of the future,” with search-engine giving hopefully leading to other types of involvement.