Localization, Unique Data Sets & the Future of Search

Local is Huge

Google's US ad revenue is roughly 15 billion & the size of the US Yellow Pages market is roughly 14 billion. Most of that money is still in print, but that shift is only accelerating with Google's push into local.

Further, cell phones are location aware, can incorporate location into search suggest, and on the last quarterly conference call Google's Jonathan Rosenberg highlighted that mobile ads were already a billion Dollar market for Google.

Google has been working on localization for years, and as a top priority. When asked "Anything you’ve focused on more recently than freshness?" Amit Singal stated:

Localization. We were not local enough in multiple countries, especially in countries where there are multiple languages or in countries whose language is the same as the majority country.

So in Austria, where they speak German, they were getting many more German results because the German Web is bigger, the German linkage is bigger. Or in the U.K., they were getting American results, or in India or New Zealand. So we built a team around it and we have made great strides in localization. And we have had a lot of success internationally.

The Big Shift

I have been saving some notes on the push toward local for a while now, and with Google's launch of the new localized search results it is about time to do an overview. First here is Google's official announcement, and some great reviews from many top blogs.

Some of the localized results not only appear for things like Chicago pizza but also for single word searches in some cases, like pizza or flowers.

Promoting local businesses via the new formats has many strategic business benefits for Google

  • assuming they track user interactions, then eventually the relevancy is better for the end users
  • allows local businesses to begin to see more value from search, so they are more likely to invest into a search strategy
  • creates a direct relationship with business owners which can later be leveraged (in the past Google has marketed AdWords coupons to Google Analytics users)
  • if a nationwide brand can't dominate everywhere just because they are the brand, it means that they will have to pony up on the AdWords front if they want to keep 100% exposure
  • if Google manages to put more diversity into the local results then they can put more weight on domain authority on the global results (for instance, they have: looked at query chains, recommended brands in the search results, shown many results from the lead brand on a branded search query, listed the official site for searches for a brand + a location where that brand has no office, etc.)
  • it puts eye candy in the right rail that can make searchers more inclined to look over there
  • it makes SEO more complex & expensive
  • it allows Google to begin monetizing the organic results (rather than hiding them)
  • it puts in place an infrastructure which can be used in other markets outside of local

Data Data Data

Off the start it is hard to know what to make of this unless one draws historical parallels. At first one might be inclined to say the yellow page directories are screwed, but the transition could be a bit more subtle. The important thing to remember is that now that the results are in place, Google can test and collect data.

More data sources is typically better than better algorithms, and Google has highlighted that one of their richest sources of data is through tracking searcher behavior on their own websites.

Pardon Me, While I Steal Your Lunch

There are 2 strong ways to build a competitive advantage on the data front:

  • make your data better
  • starve competing business models to make them worse

Off the start yellow page sites might get a fair shake, but ultimately the direction they are headed in is being increasingly squeezed. In a mobile connected world with Google owning 97% search marketshare, while offering localized search auto-complete, ads that map to physical locations, and creating a mobile coupon offers network, the yellow page companies are a man without a country. Or perhaps a country without a plot of land. ;)

They are so desperate that they are cross licensing amongst leading competitors. But that just turns their data into more of a commodity.

Last December I cringed when I read David Swanson, the CEO of R.H. Donnelley, state: "People relate to us as a product company -- the yellow-pages -- but we don't get paid by people who use the yellow-pages, we get paid by small businesses for helping them create ad messages, build websites, and show up in search engine results. ... Most of the time today, you are not even realizing that you are interacting with us."

After seeing their high level of churn & reading the above comment, at that point I felt someone should have sent him the memo about the fate of thin affiliates on AdWords. Not to worry, truth would come out in time. ;)

Making things worse, not only is local heavily integrated into core search, with search suggest being localized, but Google is also dialing for Dollars offering flat rate map ads (with a free trial) and is testing fully automated flat rate local automated AdWords ads again.

Basic Economics

How does a business maximize yield? Externalize costs & internalize profits. Pretty straightforward. To do this effectively, Google wants to cut out as many middle men out of the game as possible. This means Google might decide to feed off your data while driving no traffic to your business, but rather driving you into bankruptcy.

Ultimately, what is being commoditized? Labor. More specifically:

  • the affiliate who took the risk to connect keywords and products
  • the labor that went into collecting & verifying local data
  • the labor that went into creating the editorial content on the web graph and the links which search engines rely on as their backbone.
  • the labor that went into manually creating local AdWords accounts, tracking their results, & optimizing them (which Google tracks & uses as the basis for their automated campaigns)
  • the labor that went into structuring content with the likes of micro-formats
  • the labor that went into policing and formatting user reviews
  • many other pieces of labor that the above labor ties into

Of course Google squirms out of any complaints by highlighting the seedy ends of the market and/or by highlighting how they only use such data "in aggregate" ... but if you are the one losing your job & having your labor used against you, "the aggregate" still blows as an excuse.

But if Google drives a business they are relying on into bankruptcy, won't that make their own search results worse?

Nope.

For 2 big reasons:

  • you are only judged on your *relative* performance against existing competitors
  • after Google drives some other players out of the marketplace and/or makes their data sets less complete, the end result is Google having the direct relationships with the advertisers and the most complete data set

The reason many Google changes come with limited monetization off the start is so that people won't question their motives.

Basically I think they look at it this way: "We don't care if we kill off a signal of relevancy because we will always be able to create more. If we poison the well for everyone else while giving ourselves a unique competitive advantage it is a double win. It is just like the murky gray area book deal which makes start up innovation prohibitively expensive while locking in a lasting competitive advantage for Google."

You would never hear Google state that sort of stuff publicly, but when you look at their private internal slides you see those sorts of thoughts are part of their strategy.

What is Spam?

The real Google guidelines should read something like this:

Fundamentally, the way to think about Google's perception of spam is that if Google can offer a similar quality service without much cost & without much effort then your site is spam.

Google doesn't come right out and say that (for anti-trust reasons), but they have mentioned the problem of search results in search results. And their remote rater documents did state this:

After typing a query, the search engine user sees a result page. You can think of the results on the result page as a list. Sometimes, the best results for "queries that ask for a list" are the best individual examples from that list. The page of search results itself is a nice list for the user.

...But This is Only Local...

After reading the above some SEOs might have a sigh of relief thinking "well at least this is only local."

To me that mindset is folly though.

Think back to the unveiling of Universal search. At first it was a limited beta test with some news sites, then Google bought Youtube, and then the search landscape changed...everyone wanted videos and all the other stuff all the time. :D

Anyone who thinks this rich content SERP which promotes Google is only about local is going to be sorely disappointed as it moves to:

  • travel search (Google doesn't need to sell airline tickets so long as they can show you who is cheapest & then book you on a high margin hotel)
  • any form of paid media (ebooks, music, magazines, newspapers, videos, anything taking micro-payments)
  • real estate
  • large lead generation markets (like insurance, mortgage, credit cards, .edu)
  • ecommerce search
  • perhaps eventually even markets like live ticketing for events

Google does query classification and can shape search traffic in ways that most people do not understand. If enough publishers provide the same sorts of data and use the same types of tags, they are creating new sets of navigation for Google to offer end users.

No need to navigate through a publisher's website until *after* you have passed the click toll booth.

Try #3 at Reviews

Google SearchWiki failed in large part because it confused users. Google launched SideWiki about a year ago, but my guess is it isn't fairing much better. When SideWiki launched Danny Sullivan wrote:

Sidewiki feels like another swing at something Google seems to desperately desires — a community of experts offering high quality comments. Google says that’s something that its cofounders Larry Page and Sergey Brin wanted more than a system for ranking web pages. They really wanted a system to annotate pages across the web.

The only way they are going to get that critical mass is by putting that stuff right in the search results. It starts with local (& scrape + mash in other areas like ecommerce), but you know what they want & they are nothing if not determined to get what they want! ;)

Long Term Implications

Scrape / mash / redirect may be within the legal limits of fair use, but it falls short in spirit. At some point publishers who recognize what is going on will align with better partners. We are already seeing an angry reaction to Google from within the travel vertical and from companies in the TV market.

Ultimately it is webmasters, web designers & web developers who market and promote search engines. If at some point it becomes consensus that Google is capturing more value than they create, or that perhaps Google search results have too much miscellaneous junk in them, they could push a lot more searchers over to search services which are more minimalistic + publisher friendly. Blekko launches Monday, and their approach to search is much like Google's early approach was. :)

Is Google Recommending You Try Paid Links?

Friday fun. Search for Matt Cutts and Google recommends paid links. ;)

Embedded Structural Contempt for Personal Freedom

I must confess to being a junky for reading economics and investing sites. A person can't beat the market for a long period of time without having some skills, and so the level of discourse you find on top investing blogs blows other areas out of the water. And sometimes the comments are more quote-worthy and insightful than the blog posts. For instance, "The organisation of society is for one purpose only, to separate as much labor-value from the majority as is possible."

Cynical? Or Realistic?

Some people might look at the above quote and say "well that is cynical" but the truth of a debt based money system means that many people MUST fall behind and be impoverished by debt. How else do you explain most people having nothing saved for retirement going into our jobless recovery, while their children get to eat nearly 6 figures of debt just for being born?

It is fraudulent, but it is how "the system" is set up, and until enough people get outraged by it, it will continue:

That chart of diminishing returns is the window to understanding why humankind is trapped in a central banker debt backed money box. No money for NASA manned space flight - NASA's total budget a puny $18 billion in comparison to the $1.9 Trillion that went to service the bankers last year. One half the schools closing in Kansas City, states whose debts and budget deficits seem insurmountable all pale in comparison to how much money went to service the use of our own money system.

It doesn't have to be like that, in fact it's a ridiculous notion that the people of the United States, or any country, should pay private individuals for the use of their money system. Ridiculous!

It's difficult to see this from inside the box, so let's look at what happened to Iceland to illustrate. The central banks of the world created financial engineered products and brought them to the banks of Iceland. These products created a boom in the amount of credit. Prices of everything rose, and the people of Iceland then had no choice but to go along for the bubble ride. Then with incomes no longer able to service the bubble debt, the bubble collapsed.

To "save the day," the IMF and central bankers around the world rushed in to "rescue" the people, banks, and government of Iceland. They did this by offering loans... documents that create money simply by signing a contract of debt servitude. That contract demanded ownership of Iceland's infrastructure such as their geothermal electrical generating plants. It also demanded the future productivity of the people of Iceland in that they should work and pay high taxes for decades to pay back this "debt." Debt that they did not create or agree to service in the first place!

There were some wise people who saw through this central banker game and started a movement. They DEMANDED that the President of Iceland put the debt servitude to a vote and the people wisely said, "Central Bankers Pound Sand!"

How Structural Accounting Fraud Produces "Wealth"

All around the world banksters make large bets, and lever up on any kind of fraud they can spread to blow huge speculative bubbles. When/while they win, they keep the profits. When they lose (an inevitable consequence of blowing huge economic bubbles), they threaten to destroy the economy if someone else doesn't cover their losses. The correct term to describe the strategy is financial terrorism.

They Don't Make Presidents Like They Used To!

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs" - Thomas Jefferson

Some people thought the current US president would be different than the most recent president. It is the populist angle he based his campaign on. But promptly after entering office he got on his knees for the banking class. "And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place." - Dick Durbin.

Non-transparency = Fraud

The sad reality is we are headed toward bankruptcy and are implementing exactly the wrong strategies if we have any hope to get out of it. Years after the fraudulent bailouts were passed in the U.S. (against the will of the people) the Federal Reserve is still withholding information and appealing legal requests, and key members are willing to commit perjury to maintain secrecy. When they gave away a half-trillion Dollars to foreign interests they couldn't even share who got the money.

The don't worry, trust us angle doesn't hold water when the mathematical realities of failure hit us all. "Nontransparency in government programs is always associated with corruption in other countries, so I don't see why it wouldn't be here" - Gerald O'Driscoll, former vice president at the Federal Reserve Bank of Dallas.

Until the bankers who looted Trillions of Dollars via mortgage fraud see jail time I don't think there is any hope for change. The system is rotten to the core, from the top down.

Moral Hazard in Context

Normally we make laws to prevent such corruption: "In the early years of the London insurance market, it was possible to buy a life insurance policy on a complete stranger. Then insurance companies noticed the high incidence of unexpected homicides among their lives assured, and the concept of insurable interest was devised, codified by the Life Assurance Act of 1774. Today, you can’t buy a life insurance policy unless you can demonstrate some loss by the assured party’s death. The business is safer that way!"

In paying banksters for losing money & relaxing accounting standards (so they can claim false profits while losing money), they are only encouraged to commit more fraud. It's moral hazard writ large.

Stolen vs Earned

Give anyone a trillion Dollars to play the market, backstop the losses on the losing half and let them keep the profits on the winning trades and they will make billions. It's so easy a monkey could do it. And yet it is considered a legitimate trade for bankers to do just that.

Most of these large financial companies are entirely parasitic in their nature, providing society with no real or lasting value - stealing whatever they earn while creating economic distortions that harmfully misallocate capital. Whatever scam they can use to steal your retirement will be deployed: "Quite bluntly, the clueless dolts who allowed [high frequency trading] to occur need to be publicly excoriated, fired from their job as exchange officials, and driven out of town on a rail. Oh, and, all the gains from this organized theft should be clawed back from all the front-running firms that stole this money — THAT’S RIGHT, ITS THEFT — one quarter cent at a time. - Barry Ritholtz"

A top investment bank can give you bogus trading tips on a stock over a half-dozen times in a row - while trading against the (mis)information they share publicly to move the markets. But if someone else trades against that information before they do it is illegal and must be stopped.

How is This Relevant to the Web?

The web shifts the flows of information and finance. The above mention folks in positions of authority don't like that much.

"In a time of universal deceit, telling the truth is a revolutionary act." - George Orwell

Popularity is the inequality in supply and demand, equalized by price. The web allows for a direct connection between content creators and their audiences with little to no intermediation:

This isn’t complicated. In today’s wired world, the most important economic competition is no longer between countries or companies. The most important economic competition is actually between you and your own imagination. Because what your kids imagine, they can now act on farther, faster, cheaper than ever before — as individuals. Today, just about everything is becoming a commodity, except imagination, except the ability to spark new ideas.

The inventor of the web & leaders of other popular internet services think government transparency is important. Many people view access to the WWW as a fundamental human right.

What do elected officials like Jay Rockefeller think? The internet should have never existed.

Numerous governments have aimed at destroying WikiLeaks due to fake security concerns, while some government agencies track social network activity. Lets not forget how many governments are willing to outright lie to their own populous to gain support for bogus wars. War is a racket. It always has been. Just like our banking system!

The freedom and opportunity the web represent can't last long. If it does, many of the above concerns will try to regulate it or (rightfully) find themselves irrelevant.

Where do you place your bets? And who is betting against you?

Spam Free Search?

Just for fun. But if things get much worse it might be good for utility as well ;)

What Matters Now

I am still behind on a couple major writing projects, but one of the writing projects that was hardest for me was trying to write something for Seth Godin's new project - What Matters Now. A killer PDF full of ideas from some of the leading thinkers in technology*

*and me ;)

When I got started online I ended up having to get a job because I had plenty of debt and no experience. But I learned somewhat quickly, and had a habit of taking pictures of things that I thought were interesting. After reading Andrew Goodman's guide to AdWords I saw he referenced Seth Godin, and so I devoured almost every (marketing) book Seth had published to that point and noticed there was the ability to buy a bunch (20?) of his Purple Cow book as an admission fee to see him speak live at his office.

I did the bulk purchase. So late after work one night I drove most of the way to Seth's place and slept in my car at a rest station about 20 miles from his business. When I woke up in the morning I went to his office a bit early, finished reading another book while anxiously sitting there, and then finally everyone showed up. His enthusiasm was great. And he taught just how much marketing is becoming art.

But what he did (that really made my day) was he grabbed a bunch of products that he thought were great examples of marketing and put them on a table. One of them was a Yorkie candy bar. I had just took a picture of one of those on my camera, and somehow when I saw that on Seth's table it made me think that maybe I knew what was going on. It was like some sort of validation or test. Like scoring an A on a pop quiz. That and reading his books really made a lot of things just click on the marketing front.

That night there was also a Red Hot Chili Peppers concert back up near where I lived (silly that I had money for concert tickets when I was broke...but I think I needed inspiration more than anything back then), so I had a long drive ahead of me...but on the ride to the concert I think I was far more excited about feeling like the web and marketing were falling into place than about going to see the great live music.

I was on salary and my boss viewed extra hours from me as free labor. And I was trying to learn online stuff while working about 70 hours a week at my job. It was going to Seth's office that helped give me the confidence to put in my notice that I was going to quit my job to play on the web. I did it way before I had enough cashflow to do so, but it worked out ok in the end :D

6 years later, to have seen Seth speak at Elite Retreat this year was great because it was a reminder how far I had come since I first started out. And to have him ask me to contribute to his new project was totally killer, and a bit humbling. It was so hard to write though because of the awe factor. It was too hard to condense SEO into 200 words, and then when you think of similar topics how can you write on hyperlinks when you see David Weinberger wrote a killer entry on that front. So I had to think long and hard about what to write about...and finally decided that the best thing to write about would be how you don't have to be perfect to get started online. I certainly was not, and still have a long way to go. ;)

Please check out What Matters Now and let me know what you think!

What is the Difference Between Google's Secrecy & Your Privacy?

One of Google's leading marketing secrets is to appeal to power users. When describing how they designed Gmail, Google's Todd Jackson stated:

We started with the early-adopter crowd. That was on purpose. We wanted to build a product for people who were getting hundreds of e-mails a day, because we believe by focusing on the power user, you're designing the product the rest of the market will want in a couple years when everyone's usage habits catch up to the most active users. We pay most attention to seven-day active users (those who use Gmail at least once every seven days) and usage--the amount of actual engagement with the product. Something that Larry and Sergey (Larry Page and Sergey Brin, Google's co-founders) are always, always telling us is to focus on usage rather than users. That's what matters more. You get better feedback and you are properly kept more on the leading edge if you're focusing on the people who are using the product all the time, using the product all day, than just the casual users.

This is why marketing to developers and designers is so important...they use the web more, and the stamp they leave on it is much deeper than the average user. But they also tend to be sensitive to marketing messaging, especially when it becomes a bit hypocritical.

Eric Schmidt On YOUR Privacy With Google

Recently in an interview Eric Schmidt made the awesome statement "Judgment is important ... If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."

That approach to privacy from a search engine intent on personalizing the search experience is horrible for a number of reasons. It is bad enough that it encouraged reactions from security professionals and open source advocates, who like to remind us that Google is *always* trying to spy on you and collect more data.

"Everyone knows that every site you visit and all address bar searches in Chrome go to Google, right?" - Christopher Blizzard

Why did Google create an operating system? So they can spy on you. Why does Google care about speed so much that they created a DNS service? It was a convenient excuse to use...so they can spy on you. Why is Google launching their own cell phone? So they can spy on you.

Mozilla makes most of its money from their search syndication partnership with Google, and yet Mozilla's Asa Dotzler wrote about how to switch your search provider to Bing. Explaining why he favors Bing, he wrote:

Because search is broken like browsers were broken in 2002. No competition means that Google can do what ever it wants and you have to like it. Bing's search is pretty good, in the US at least, and their privacy policy is so much better (they don't, for example, connect your Microsoft email or office accounts with your search results like Google does so search data they collect isn't personally identifiable.)

Bruce Schneier understands why privacy is important

For if we are observed in all matters, we are constantly under threat of correction, judgment, criticism, even plagiarism of our own uniqueness. We become children, fettered under watchful eyes, constantly fearful that -- either now or in the uncertain future -- patterns we leave behind will be brought back to implicate us, by whatever authority has now become focused upon our once-private and innocent acts. We lose our individuality, because everything we do is observable and recordable.

The following comment also reveals how this sort of tracking + philosophy on privacy can go astray

Why does Eric Schmidt dismiss your privacy?

money

Exploiting User Flaws for Maximum Profit Potential

Google collects more data than they need to (putting you at greater risk), so they can better exploit your mental weaknesses for profit. Eric Schmidt is betting big on exploiting YOUR privacy for profit:

Even better, the device knows who I am, what I like, and what I have already read. ...
Some of these stories are part of a monthly subscription package. Some, where the free preview sucks me in, cost a few pennies billed to my account. Others are available at no charge, paid for by advertising. But these ads are not static pitches for products I'd never use. Like the news I am reading, the ads are tailored just for me. Advertisers are willing to shell out a lot of money for this targeting.

But a bet for ads that learn you and profile your faults and weaknesses is not one that Tim Berners-Lee would make. The creator of the WWW is firmly against it:

In a world where democracy is getting more participatory, it's very important that people are informed over a neutral medium so they can connect to whoever they want. Another issue that is very important is snooping. I don't want any snooping on my Internet traffic.
You can do things to ensure that my Internet runs smoothly, but when I am doing something which is perhaps very intimate: when someone looks up something to see if they have cancer, or a teenager wonders if they are homosexual or not and wants to go online to find answers, this should be private. So systems that monitor every click and build a profile of me are very damaging.
The things we do on the Internet are so intimate that they are much more valuable to others and damaging to me than having a permanent TV camera in my living room. I don't want my health premiums to go up if I look up health information
; I don't want to be a suspected terrorist if I do research on chemicals, I don't want to get leaflets from gay rights groups if I look up something on sexuality.

At least we know why Eric Schmidt says "Advertisers are willing to shell out a lot of money for this targeting" and why he thinks you don't need to worry about it.

But maybe Mr. Schmidt is right. Lets look at how Google operates...

With Nearly Unlimited Privacy & Secrecy

What happens when Google gets search personalization or search suggestion wrong and your spouse wants to divorce you because of a Google error? Judgment is important, after all. Well Google wouldn't make such errors, they are perfect. Or are they?

Google's Data Privacy Strategy is a Leaky Boat

Google wants you to trust them enough to store your data with them in the cloud. Eric Schmidt said that the cloud was their most important focus in 2010. Well what happens when your internal data is exposed publicly due to a Google bug? Couldn't happen? Well guess again and again.

Is Eric Schmidt suggesting that businesses simply shouldn't consider using Google Apps because Google has a track record of not caring about user privacy & being sloppy with private data? How should we judge Google based on their current business practices? Judgment is important.

Google Promotes Lambasting Content

A few weeks back while watching CNBC I remember seeing reporters mention that if you want customer service from airlines that you should complain on Twitter. Google has since integrated such messages directly in their search results. So now any bad customer experience (or envious competitor) becomes part of your brand. And you can't make money while making everyone happy. As the web gets more competitive the markets will only get nastier, where more people try to cash in on established brands.

In fact, running AdWords ads asking if (or exclaiming that ) product or service x is a scam is one of the most popular AdWords affiliate strategies. Google doesn't let brand advertisers opt out of such messaging on their brands, and if you don't buy your brand they will be glad to sell that ad slot to someone else.

Google AdWords Ads Promote Scams

Sure Google recently sued some scammers who were cashing in on the Google brand directly, but how long was Google running the Obama stimulus and government grants for after they lied and said they were already cleaned up?

What does it say about the Google brand that their own brand is being tarnished, but will run scam ads on other keywords even after they said the issue has been cleaned up?

It is so bad that Google has an ad category called "get rich quick".

How should we judge Google based on their current business practices? Judgment is important.

Google Recommends Violating Copyright

Most sites violating copyright online which carry ads are wrapped in "Ads from Google", via Google AdSense & Google DoubleClick.

Further, Google also promotes cracks, warez, and torrent searches on copyright materials.

Sure it is not as bad as when Google ran AdSense ads on the #1 cracks website, but how hard would it be to sanitize words like warez and cracks from search suggestions?

How should we judge Google based on their current business practices? Judgment is important.

Google Uses Limited Ad Disclosure

Google has frequently talked up the importance of publishers disclosing ads. And yet in some cases Google removed the "Ads by Google" notification with a little "I" button that you have to scroll over to see that it is an ad.

Further sometimes they have shown NO ad notification on some ad units, making some website visitors think certain site owners condoned homosexual activity.

And Google even marketed the fact that their searchers did not realize that paid search AdWords ads were advertisements:

INT [interviewer]: “Why do the results on top have a yellow background, did you notice?”
TP [tester]: “I didn’t notice this.”
INT: “What does it mean?”
TP: “It definitely means they’re the most relevant.”

Google did not use this feedback to beef up their clearly confusing disclosure...they stuck with what was working well for them.

How should we judge Google based on their current business practices? Judgment is important.

Google Funds Manual Information Pollution

I was looking through some of the suggested article titles for some of the garbitrage websites, and came across gems like "Miley Cyrus Did What? Celebs who Make Bad Decisions and How to Teach our Kids Right"

Could that title be any more leading? And Google is funding that sort of garbage - right now.

How should we judge Google based on their current business practices? Judgment is important.

Google Funds Automated Information Pollution

And there are sites with automated content generation built around arbitraging brands. A few months ago I saw the following automated crap ranking for some of our branded keywords...trying to arbitrage our brand & associate it with foreclosure scams

And that was not a 1 off article...Google is paying to have 10,000's of such gems created, and is indexing them with glee

What does it say about the Google brand that their ads support this automated generation of trash? What message does that send to online consumers and business owners? How should we judge Google based on their current business practices? Judgment is important.

Google's Enjoyment of Privacy (aka Black Box Pricing)

Some advertisers have fallen out of grace with Google over the years and have had no luck getting back in. Google arbitrarily decides they don't like them (or maybe even their business model) and that the relationship should end. The game is complicated, but in some cases one strike and you are out. The same sort of privacy and secrecy is core to Google's organic search engine ranking algorithms, how they profile and target certain webmasters, the proprietary standards they push onto the web (like rel=nofollow), & almost every other aspect of their business.

Are you a Google cell phone partner who built a phone on Google's Android OS? If so, did they tell you that they were going to thank you for the cross marketing by creating a competing product? I doubt it.

Are you a Google partner who syndicates their ads? Want to know what percent of the click price you are earning? Screw you, you can't. Go eat crow.

And in the markets where Google is dominant they not only pass arbitrary judgment without care, concern, or explanation...but they also use their market position to exert monopoly pricing powers. They frequently state that the market sets the prices on the ads, but for one of our sites we did some brand ads on informational searches where there are no competing sites buying AdWords ads.

Our ad is so relevant that even the broad matched version of the ad is pulling in a 12%+ clickthrough rate (with phrase match more than doubling that clickthrough rate). Searchers love our ad and website. But if we bid less than a nickel Google won't even display the ad (in spite of the high relevancy and complete lack of competition in the marketplace).

Google sets arbitrary floor prices and shows you that if you want more clicks you need to pay more, even though the only competitor in this auction is Google. It is no better than the shill bidding SnapNames got in trouble for.

And yet you often hear Google talk about the power of democratic marketplaces. Something they clearly don't believe in. What message does that send to business owners? How should we judge Google based on their current business practices? Judgment is important.

What is YOUR Judgment on Google?

Anytime you see Google do something stupid make sure you blog about how stupid Google is, and compare their errors to what sort of results are available on Microsoft Bing. Feel free to leave your examples in the comments AND blog them. I'll share one of my favorite examples from today, showing me New York hotels near San Francisco :D

I still use a lot of Google products and write the above knowing that they have been pretty good to me, but seeing nonsensical garbage absolutist statements from the top of their company scares me.

If Privacy is Unimportant...

Think I am being hard on Google? Well if they think privacy is unimportant, then maybe they can explain why they host a PDF titled Inside the Black Box Technology and Innovation at Google.

Google workers think THEIR own privacy is crucial to their success (and WILL fire any employees who get it wrong), but think YOUR privacy is a commodity they should sell to the highest bidder.

Good to know!

Careful what you enter into a search box. And be careful when choosing your web browser. I would rather pay $50 more upfront and not get spied on. How about you?

Google & Bing Annouce Real Time Search Deals With Twitter

Marissa Mayer announces that Google has reached an agreement with Twitter to include Twitter updates in Google's search results.

We look forward to having a product that showcases how tweets can make search better in the coming months. That way, the next time you search for something that can be aided by a real-time observation, say, snow conditions at your favorite ski resort, you'll find tweets from other users who are there and sharing the latest and greatest information.

Hmmm..."product"? Obviously something a bit smarter that simply providing raw indexing and display.

This move follows Bing's recent announcement - today, in fact - they would do likewise.

We’re glad you asked that. Because today at Web 2.0 we announced that working with those clever birds over at Twitter, we now have access to the entire public Twitter feed and have a beta of Bing Twitter search for you to play with (in the US, for now). Try it out. The Bing and Twitter teams want to know what you think.

Microsoft has pulled off a similar deal with Facebook, which has six times as many users as Twitter.

With two competing deep pocketed players signing up, how long can Twitter remain unsold? Will Google build a competing version of Twitter? Much easier to crunch link data and index in real time if you can backend updates with your own systems, rather than making sense of third-party date, like Twitter, which is probably a nightmare. Some cosy integration arrangement is probably part of the deal, of course.

Read-Write-Web made the valid point that Google grew when they signed a similar deal with Yahoo. Now Twitter is doing likewise, serving their stuff to Google's massive audience. However, given Twitters notorious fail-whale flakiness, it remains to be seen if their system is ready for the roar of traffic that will soon come their way.

What Does This Mean For SEOs?

Go where the search engines do. Link to your content from Twitter. Publish excerpts and link-backs. Monitor real-time search trends, using Google's Hot Trends and trend data tools, such as TweetStats. Supply content to match demand.

It will be interesting to see if real-time search, on a Google scale, produces new business models. The traffic bursts should ample reward for being seen first for popular real time queries.

The news business relies on immediacy, and they just got a whole new wave of unpaid competition.

Search Keeps Innovating

Steve Balmer on Search Innovation

In the above interview Steve Balmer states that search innovation has slowed down over the past 5 years compared to the 5 years prior. While committing to pouring billions of Dollars into the search market, Steve Balmer does not think that search has kept up its rate of innovation. But this perception is actually a fib. A lie. One that Steve must tell himself AND the media in order to try to gain press coverage for Bing and justify what will amount to a very expensive competition in the search marketplace. And it is a lie the media mush push to be able to write about / hype THE NEXT GOOGLE!!!!!!

Search Innovation is Speeding Up

The reason I know that search keeps speeding up is that I write about it. We offer subscribers a monthly newsletter, have forums that we participate in daily, and blog about the latest developments in search. This past month I have done a week of traveling and 2 conferences, but I have absolutely struggled to keep up with the all the changes recently (in spite of closing our site off to new members). Frankly I am amazed at how Danny Sullivan is able to put conferences together and still keep up with everything!

To understand the search game you must first understand that Google is first and foremost a public relations driven company which sells itself as a technology company. This is precisely why they market their browser/operating system as a browser and not an operating system...to avoid the regulations on (and comparisons with) Microsoft.

Recently Googlers have felt threatened by the media, Bing, Twitter, Facebook, and Wolfram Alpha. You can see this by looking at how Matt Cutts posted a 30 day challenge not to use any Microsoft projects, by all the daily innovations and releases Google is offering, by their promotion of a vaporware micropayment system, and by reading the recent 5 part interview of Eric Schmidt, Udi Manber, Amit Singhal, Scott Huffman, and Matt Cutts they did with BusinessWeek to remind the world how innovative Google is.

Google has went as far as advertising their advanced search tips on many search queries and even SELLING SEARCH AS A LIFESTYLE!?!?!

Now some of the changes may not be noticeable to the average searcher because Google has become more refined over the years. But it does not mean that the market lacks innovation. I thought it would make sense to put a post together to highlight some of the ways search has changed so far this year.

Under the Hood Innovation

Google stated they plan to support their rel=canonical tag across domain names and let you set URL parameters for them to ignore.

A few months back Google announced their new caffeine index, but some of the algorithmic changes are far more subtle. When Patrick Altoft tried to dissect some of the ideas behind the Vince/brand update he quoted this killer post from the always impressive Tedster

Here's my current idea. I believe that Google's staff contains more statisticians than any other specialty. The algo is, more and more, driven by statistics and probability. These statisticians watch query data as well as backlink data. That's what jumped out at me while re-reading this patent: backlinks PLUS queries.
....
This is my current brainstorming area, and it's why I recommend the idea of ATTRACTING backlinks more than "building" them. Backlinks alone cannot create a statistically correct footprint for a growing, thriving website. Even though such a "dummied-up" impression has been a working tool for improved ranking in the past, it's a tool whose future is getting more and more cloudy.

Creating a legitimate looking link profile by doing nothing but push marketing keeps getting harder as Google refines what they are looking for as a natural link building profile based on better statistics. If your link building efforts revolve around public relations, publicity, and brand then you are good to go. But if they are mechanical and aggressive you can use fairly similar link building strategies on 2 parallel sites and see one rank while the next is stuck somewhere in Google hell. From the above linked 5 Googler interviews you can see how Google is constantly working to improve localization, word relationships, indexing, and spam detection. QDF + universal search further complicate the search results.

Filtering Information

Beyond the core ranking algorithms there are also new ways to sort through information.

Google has added many options / filters / lenses to view search through, including links to...

  • vertical databases (like Videos, News, Blogs, Books, Forums, and Reviews)
  • results within specific time frames
  • ways to navigate related searches (via Related searches, Wonder wheel, Timeline)
  • additional filters (like displaying images from the page, more text, fewer or greater shopping sites)

Thinking through those type of filters with universal search in mind (and Google's new caffeine index in place) you could see how Google can further alter the search landscape on a query by query basis. Give me something fresh, give me old trusted stuff, give me at least 1 authoritative review, etc. In select markets this can be further refined by editorial partnerships like the health onebox.

Here are recent SEO results. And when authoritative SEO related sites (like SEO Book, Search Engine Land, SEOMoz, SE Roundtable, Search Engine Journal, Search Engine Watch, etc.) publish fresh posts they quickly get mixed into the top 10 to 20 search results (similarly to how Google News results get mixed in). As Google tests mixing in different types of results they can track user response on a per query basis, and bucket different related keywords together.

Inspired User Interface Innovation

A lot of the innovations come from competing search services. Consider that

  • Google's SearchWiki (and SideWiki) were heavily inspired by Wikia Search.
  • Yahoo! implemented search suggestion features widely before Google did.
  • Ask 3D pushed about a lot of the universal search sort of ideas.
  • Google tried to clone Youtube, right up until they were forced to buy it.
  • Bing launched a new visual search service.
  • Wolfram Alpha forced Google to create and evolve the Google Squared service.
  • Yahoo! SearchMonkey pushed microformats, which are now becoming more popular across competing search services.
  • One of Microsoft's best Bing innovations was putting the ads closer to the organic search results - which was quickly copied by Google.

Single Listing? Double Listing? Triple Listing? Quadruple Listing?

In the past sometimes sites would be able to get a double listing and/or sitelinks. Recently I saw a quadruple listing

Google is better surfacing forum posts in search results, has tested displaying breadcrumb navigation in the search results, and is returning internal link anchor page-links directly in the search results.

Google has made results from site: searches extensible

Search Business Model Innovation

Paid search is so easy to grasp that Google's test case is LITERALLY a pet stick!

In spite of the ease of marketing Google is not happy leaving that as is.

Google is testing using machine learning algorithms (and current Google AdWords advertiser data!!!!!!!!!) to set flat rate search ad pricing for small local businesses. And they are rumored to be launching a LendingTree clone.

Google ***is*** the competition, and they keep taking more of the web for themselves.

They are also ramping up their ad exchange. Traditionally Google has tried to credit the last click with most of the value since they are the #1 search company. But brand advertisers buy branded display ads based on mushy feely impulses...and so search can't keep taking all the credit forever if Google wants to expand the online ad pie to become a $100 billion company. As display ad clickers fall off a cliff, Google is beginning to show view conversions (conversions where an ad was viewed but not click) to further justify fuzzy brand spend. Hey if they have ads on 80% of the WWW then you are going to think those ad views created some conversions, even if they were ignored.

It doesn't matter what regulations appear, advertisers feel the need to buy those ads because that is where the distribution is. Currently Google (and Facebook) have such domination over advertisers that they can mass ban them and shut them down overnight as desired, in spite of the economic climate.

There is going to be continued innovation in the online advertising space as marketers better test / recommend / track / explore / learn how to better automate blending ads and content.

Google is testing ads tied to location pages and product ads directly in the search results.

Further marketers are studying how ads sometimes sell something other than what they were created to sell, and there is research being done on ad fatigue and relevancy.

Media Innovation

Google has been buying maps marketshare through cross promotion, a fairly flexible API, collecting user data, and clever promotional tie ins with the likes of Monopoly. China might crack down on Baidu's music piracy, and Google has distribution deals to buy marketshare as long as China allows it to happen. Increasingly Google is procuring the source of record for a greater and greater number of classifications of information types. They are already pushing their power meter, have Sony distributing their browser, and patenting some types mobile consumer reviews. Alas everything is information!

Google is learning to read more content in new formats like AJAX and is getting better at spitting content back out via a quick view of PDFs and mobile printing devices.

Google has begun trying to tie search volumes to economic activity, with their economist claiming that the economy is improving. Others, like Kayak, have followed suit by sharing their data in an easy to reference format.

All this additional content creates more competition and lowers profit margins for web publishers. And affiliate marketing will continue to grow harder. Increasingly successful media is going to need to bake self-promotion in its core, and profitable media will become more of an interactive service.

Why Write a 5 Page Blog Post With ~80 Links in It?

3 reasons...

  • to help me collect my thoughts and share them with you, our readers! :D
  • to point out that anyone talking about a lack of innovation is search is speaking from ignorance, hyping public relations messaging to the media, and/or lying
  • to help push to save Yahoo! Boss. By some measures it might be bigger than Bing AND it if it stays around it will help ensure that search keeps innovating at faster and faster rates with healthy market competition

An Open Letter to Online Ad Networks

by Jonah Stein and Jonathan Hochman

The FTC recently announced guidelines for bloggers that requires that they disclose financial interests, freebies and paid reviews.  This decision is seen as a shot across the bow of pay per post networks and bloggers who are monetizing through affiliate programs.    The FTC has decided that compensation is the reason bloggers choose to write about a particular topic and that readers deserve to be informed about the financial relationship.    The FTC logic is simple, “As much as those bloggers who receive these gifts would like to claim this isn't the case, freebies like free laptops, trips, or gift cards are likely to influence a writer's opinion of a product.”  

On its face, the policy is defensible.   As crusaders against Virtual Blight, we applaud the intent of this decision.  Anything that raises the barrier to online scams, fraud and abuse even a little bit is a good thing. The FTC provides guidelines for responsible bloggers and theoretically eliminates a couple of the perks for bloggers, but it does virtually nothing to protect against fraud. 

Going after bloggers’ compensation to fight online fraud is reminiscent of the RIAA attacks on individual file sharers and is just as likely to succeed. The absurdity of the power and inertia of a government bureaucracy combating individual bloggers is only matched by the ludicrous assumption the government could ever move fast enough to keep up with professional scammers who jump from domain to domain, host to host and country to country with a few mouse clicks.  Prosecution could only be effective against mainstream bloggers with an established brand that are stationary targets, but these bloggers are not the right target.

Getting a proverbial free lunch in exchange for a presumably positive review may create the appearance that some bloggers are shills who lend their prestige and celebrity to their sponsors.  That perception is not unreasonable, but the same charge could be made against almost every athlete, actor, musician or American Idol runner-up who profits from our celebrity culture. 

Giving items to celebrities or other tastemakers in return for public exposure is a practice older than the printing press.   If the FTC really wants to send a message about compensated endorsements and freebies, the answer is not to go after the mommy bloggers who get a free 42-pack of diapers.  If the FTC were serious, they would begin arresting every actress wearing a designer gown to the Academy Awards and then round up the studio and network executives who rake in cash for product placements in movies and television shows.

Focus On Fraud

The statistics for online fraud are both staggering and predictable.  Instead of being distracted by the sizzling, sensational charges of payola that re-appear every generation, the industry needs to focus on the billions of dollars of online fraud committed each year.  According to the Center for American Progress, Internet-related consumer complaints are among the top ten in consumer complaints in 2008 and the number one complaint in four states.  These complaints run from auction fraud and non-delivery of ecommerce items to reverse billing scams.

By any definition, the perpetrators of online fraud are not bloggers.  If a review constitutes fraud because the reviewer was provided a free product or had some undisclosed relationship with the company who produced the product, then every journalist with a 401k full of mutual funds needs to hire a good lawyer.  Indeed, if bloggers are guilty of anything it is tabloid journalism -- writing low quality content with sensational headlines designed to attract visitors to their site in order to collect advertising revenue.  This may not live up to the highest journalistic standards, but the only crimes are against facts and the English language.

Criminals are the people and companies who create pyramid schemes, networks of spam blogs to sell diet products like Hoodia and Acai Berry cleanse, Google money trees and the myriad so called “free” offers that create recurring charges on your cell phone or credit card.

Criminals are the people who target kids’ sites to distribute Trojans, spyware and adware that infects our computers and tricks people into buying phony anti-virus products.  Most of us have either experienced malware nightmares ourselves or heard a friend’s sad story.  When online fraud is so prevalent, predatory and destructive, why are government resources being committed to pursue advertorial content?

Ad Networks Are the Key

The biggest thing these criminals have in common is that they perpetrate their scams by buying advertising through ad networks.  These networks have achieved the scale that makes it efficient for legitimate advertisers to reach millions of consumers and that makes them an ideal vector for scams, abuse and deception. 

In an unregulated auction-based advertising market place, fraudulent offers can often pay the highest bids for keywords. In FTC Going After Bloggers – Epic Fail, Aaron observes that ad networks that syndicate ads based on “maximizing yield efficiency“ are well suited to syndicate fraud. Advertisers of scams can afford to pay top dollar for ads because their profit margins are nearly 100%.

Ad networks are morally responsible as collaborators in interstate and international frauds perpetrated upon hundreds of thousands of victims each year.  Google, Yahoo, AOL, Microsoft and many others are far more culpable in consumers being defrauded than any blogger or network of bloggers.

In False and Deceptive Pay-Per-Click Ads, Harvard’s Ben Edelman estimated that as much as 70% of the revenue generated by some online scams actually wind up in the hands of the search engines.   He estimated in 2006 that Google and Yahoo were making over $200,000 a month from advertisements for screensaver software which contained spyware.  As of July 15, 2009, the top paid search results on Google for “screensaver” contain “add-on features” which include spyware, change your default browser settings, ad toolbars and otherwise aim to monetize by deceiving users.  Adding insult to injury, Edelman observes that many of these adware tools monetize by sending traffic through AdSense and DoubleClick, making Google a silent partner for adware companies like WhenU and Smiley Central.

Fight the Problems that Be

Scams and fraud not only harm the consumer, they foster the perception that the internet is not a safe place, hindering the growth of online business and delaying the transfer of marketing dollars from old media.  Instead of waiting for government agencies to step in and create regulations aimed at yesterday’s scams, as an industry we need to become proactive and develop a cooperative framework for mutual self-defense, a neighborhood watch designed to keep consumers safer while helping law enforcement focus resources on the most serious trouble makers.

The war on online fraud is going to be a huge struggle and one we are unlikely to ever declare victory.  The issues are complex, but the industry could significantly reduce the problem by creating a transparent mechanism to collect user feedback about advertisers.  Search engines and ad networks are quick to endorse behavioral targeting and social recommendations to boost earning per exposure.   For some mysterious reason, they have not applied these innovations to getting user feedback about advertisers.  

If the Internet is the cesspool that Eric Schmidt, CEO of Google says it is, one way to start cleaning it up would be to create a public reputation system for advertisers.  This would simultaneously reward honest companies while helping consumers protect themselves against the bad guys.   eBay created public reputations for buyers and sellers many years ago.  Why are advertisers free to operate without scrutiny? 

It seems straightforward to build an advertiser rating system to share relevant statistics and user feedback.  Why not provide the tenure of the advertiser, normalized click volume, the percentage of users giving feedback and a ratio of clicks to complaints along with a link to detailed reviews that could surface fraud, misleading advertising and scams?  If comparison shopping engines can do it, why can’t ad networks?

We don’t claim to have all the answers, but we see the problem and its sources. Government agencies need to ask the ad networks why they accept money for promoting fraud.  Ad networks need to grow up and behave like responsible businesses. 

Vanity URLs on 3rd Party Websites Are Worth Almost $10

Best Thing Since Sliced Bread!

Recently lots of internet marketers hopped on getting Facebook vanity URLs claiming them to be a second coming of domain names. But the problem with networks like Youtube, Facebook, MySpace, Twitter, etc etc etc is that you end up being someone else's user generated content, and it is virtually impossible to move a person from content consumer on those 3rd party sites into a customer on your site.

Social Media Traffic Typically Lacks Value

Most social media traffic is too fast and shallow to build a meaningful relationship from. Rarely are social media visitors worth as much as a penny.

Sure you can drop them at the top of a sales funnel, but then you still have to convert them. And the people who are ahead of the curve with technology are often the hardest to influence via advertising, and are the least receptive of offers unless they hear of them recommended from friends.

Social Media Mentions vs Independent Reviews

If someone recommends us, then I would much rather have that recommendation point at our site from their site rather than through a 3rd party website that might go away at some point. The third party recommendations on social networks tend to be brief/short/limited in context, so they don't carry a lot of weight toward selling something, and those mentions are often people whining about free stuff not being good enough and people recommending to their friends that they just grab a torrent of your work.

The natural bias of social media sites is toward people who value their time lowly (or else they would spend more of their time in tighter niche communities and/or in higher order business functions). Sure I have mentioned some of the recommendations for our stuff that people have done on social networks, but a link to a more in-depth review like this one is far more appealing because there is so much more context, and people who have read and followed that blogger for a while likely trust that review more than a random Twitter user trusts a 140 character recommendation.

Viral Does Not = Sales

Even the canonical example of proof of value of viral videos was not that successful. Millions of Will it Blend? video views helped the Blendtec company grow by less than a factor of 10. Many successful professional SEOs use SEO to increase the value of websites by that in less than a year, and have done so over and over again. With SEO you can create a million dollar business from scratch in about a year's time, largely because search has so much implied intent...so you don't need a huge traffic stream to monetize if you pick the right markets.

Domain Names vs Usernames

I was a bit slow to buy the seobook.org and seobook.net domain names, but recently bought the pair for less than $500. They allow me to further dominate brand related searches, while blocking potential competitors in the search results. For $500, that is not bad!

Some Facebook user named Peter Simik is squatting the facebook.com/seobook vanity URL and thinks I am stupid enough to pay $10,000 for it (assetize.com/accounts/view/210). I wouldn't give him $1 for it on principal. But there is not even a competitive threat there...people already have hundreds of connections to my real profile there, and few people are going to associate with the fake account.

More recently a couple readers highlighted that someone is on the newly launched Hunch.com website using my picture and our site logo to promote some crappy SEO website I have never heard of (hunch.com/seo-techniques/result/do-it-yourself/1928754/). That is obviously illegal, but it will only serve to undermine the trust in such 3rd party networks if they are full of fake & squatted accounts.

Protecting Your Brand

Services like KnowEm allow you to register your username on over 100 web2 sites to minimize any time wasting that might be created by someone hijacking your brand. Most of the web 2 sites will fail, but time is money, and it is hard to know which ones will be a success right from the start.

Even 1% of All Web Page Views Can be a Poor Business

Sites like Geocities , Anglefire, and Tripod were stars from about a decade ago, back when general web communities were hot then. And most of those types of sites failed.

A year ago MySpace was predicting great growth, but they have since rescinded on their big real estate deal, Google complained about how hard it was to monetize the traffic, and just earlier today the WSJ reported further job cuts:

MySpace announced plans to reduce its staff by nearly 30%, saying staffing levels were "bloated" and hurt its ability to be an efficient company. The social networking site, owned by News Corp., named a new leadership team earlier this year in an effort to reinvigorate the service. The move brings MySpace's U.S. work force to about 1,000 people.

As the Google ad deal is set to unwind MySpace, is downsizing their operation! According to Alexa, MySpace has over 1% of web's pageviews and they are struggling to make a business out of it.

How many of these general social media sites will be around in a decade?

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