Leapfish - Advertising or Investment?

One of the nice folks at Kirby Insurance in Baltimore was recently approached by a company called Leapfish and was offered ownership of a keyword relevant to the insurance agency business.

Who is Leapfish and what do they do?  Leapfish is a new entrant into what is known as meta search - basically aggregated results from other search engines and databases in one place.  They were founded in November of 2008.

What's the reason for launching what appears to be yet another search engine?  A short answer can be found in the words of Leapfish founder Ben Behrouzi, from an intereview with  Betanews, "The Internet has grown so much, and there's so much information, yet most people don't go past the first page of Google and Yahoo in their searches. Tons of stuff is getting lost."

Leapfish has introduced a twist on keyword advertising, allowing you to purchase and 'own' keywords for an up front registration fee and a renewal fee of about 5% of the up front fee.  Ownership of the keyword will guarentee placement in Leapfish paid search listings, and keyword owners can resell their keywords at a later date.  MediaPost reported these prices for various keyword sales:  keyword "diet" sold for nearly $8,000 while "Viagra" sold for $7,000 and "annuity" for $2,000.  Leapfish uses a proprietary algorithm to determine keyword value.

What to do if approached by Leapfish (or another untested company) and asked if you would like to spend a little money with them?  As far as Leapfish goes, there is a lot of good press, and a lot of people, like TechNewsWorld, seem genuinely sanguine about their prospects for success.  There are also some other sources who have adopted a skeptical posture, such as MediaPost and TechCrunch.   

In a sense, 'owning' a keyword is a little like owning a piece of Leapfish.  Will they elbow their way into a crowded search field?  Maybe, but they have to hip-check their way past behemoth Google first.  The fact is that purchasing a keyword with Leapfish right now is more like investing in a start up than budgeting for an ad placement.  Your investment may prove to be worthless, but it may also pay off handsomely in the future.  The risk is wrapped up in the success of Leapfish.  

If your objective is push traffic to your website and write business today, then Leapfish is probably not for you.  On the other hand, if you have a little money to put at risk on an investment, then Leapfish may be worth a longer look.