Freetards

The Golden Rule

The golden rule: "Treat others as you would like to be treated."

A subset of that is: "If you don't have something nice to say... don't say anything at all."

What the Golden Rule Misses

That is a guiding rule which generally helps people prevent themselves from wasting time and/or causing an issue by offending someone. But there are a few things that are missed by that rule:

  • It is easy to tell someone not to internalize stuff, but the truth is if you don't respond at all then over time those sorts of people can start to wear you down
  • If you do not respond to someone they may think they are correct & then spread their misinformation further, as some of them attribute a lack of response to "the smoking gun."
  • Some consider bluntness to be impolite, however the alternative is the destruction of the English language.

The Rise of Enraged Consumers

With the rise of social media there is a rise of consumers feeling empowered to threaten, extort, and slander businesses. The media goes so far as training consumers to do so!

Some businesses deserve it, however others have done nothing wrong other than being in front of an overly important individual. I am having trouble finding it right now, but a couple times people have threatened to smear my name and brand if I didn't give them a refund for some scammy crap they bought from someone else! They acknowledged that I wasn't associated with it, but they wanted their money back from someone & were willing to take it out of my brand if I wouldn't give it to them. And so I spoke French.

What Caused the Freetardation of the Web?

One time The Conumerist said they wouldn't link to our website because some other sites using infographics are spam, but then they ran our infographic (sans the attribution to the person who spend thousands of Dollars creating it and marketing it) and they got tons of awareness and exposure from our content. Sites like the Huffington Post do that sort of stuff all the time, and often become the canonical source for YOUR content.

Not only are there business models built on paying users to steal other's valuable content, stripping attribution & make it free (like Youtube), but the model is so acceptable online now that you can simply program bots to do it (see Ask or Mahalo).

Google claims to make copyright better online, but if you search on Google they will recommend looking for torrents, cracks, keygens, and serial numbers. A friend of mine even showed me a YouTube video which shared a DreamWeaver serial code in it. As a person who has bought their software 4 or 5 times now I think that is just awful!

What caused this sea shift? What caused people to expect & even DEMAND the labor of others for free?

I think a lot of it is an extension of the penny gap, an online bias towards ads, and open source software.

The Penny Gap

A lot of dumb people the world over are trained that Kim Kardashian and other such celebrities are important to their daily lives. In spite of all of this sort of stuff, Bing reported that for 2010 "free" was one of the top 10 searched for keywords on the web.

The penny gap is a concept where by charging *anything* for what you do you have to make it exceptionally better than anything which is freely accessible. Free is such a powerful psychological motivator that people will do irrational things for free. Such moves are largely driven by the fear of loss. If you turn down free you potentially lose out on something, but if you accept it there is no risk (that you are aware of, anyway) since it is "free." Anything that is paid not only has the risk of you being wrong, but it also has the risk of fine print.

The fine print isn't the only reason people get screwed though. The people who do the screw jobs via fine print techniques often pay a lot for exposure. And since the web (as a network) is optimized for generating maximum revenues it means that the people who eventually find you will likely become distrusting by the time they do, as they will already have got conned by someone else who is great at sales, but nothing else!

That will only reinforce the penny gap

Profitably Publishing in a World Dominated by the Penny Gap

Since so many people chase free, a lot of publishing business models are built around tricking people to click ads rather than selling something. In some circles you are viewed as sleazy for having an affiliate link in your content even if you buy and use what you are promoting & spend hours writing in-depth reviews and tutorials. Many of the same folks who view any affiliate link as sleazy carpet bomb their own websites with AdSense ads. And lets not forget that AdSense even has an ad category for "get rich quick."

Further, with Google launching Boutiques.com, selling CPA product ads on their search results, offering comparison lead generation forms on their search results, and running the Google affiliate network it is safe to say that Google is easily one of the top 5 affiliates in the world. If being an affiliate is so sleazy (and tricking people into ad clicks is somehow any better) then why is Google such a big affiliate & why do so many of their AdSense ads carry links promoting affiliate offers?

5 Online Business Models

The web has a bias toward making stuff somewhat free for most people & really monetizing the hell out of the pour souls who are naive enough to click the ads. As an online publisher you generally have 5 main business options

  • trick people into clicking ads
  • do biased reviews of hyped junk that rip people off
  • encourage negative reviews and extort businesses (illegal, and the model of some sites like RipOffReport)
  • honestly review and promote the best products and services available and monetize some of those efforts with affiliate links (I include networks like OpenTable in this category)
  • add enough value yourself that you can offer a product or service for sale

Anyone can easily do the first 3 models, but the last 2 are more challenging. The 4th one is hard because its easier to convince naive people to buy products that are built around the sales letters than it is to convince people to buy things where the sales letter was built around the product.

The tricky part with the last category...actually adding enough value to be able to charge...is that it is far harder than most people realize. The minute you publish anything publicly there are forces pushing to commoditize it (most open source software is a remake of an existing paid software solution rather than an entirely new category unto itself). Also, if someone buys something from you and gets a great return they may not want to mention it to others precisely because they rely so heavily on you and they are getting such great returns from your product or service. And even if you sell physical products, Google selling CPA ads to the likes of Wal-Mart can still drive you under unless you turn it from a product into a service (like Zappos has done).

Aggressive Sales Techniques Yield Bad Customers

If you are aggressive in your sales tactics you get customers you do not even want. The guy who created the Product Launch Formula stuff highlighted how he saw 30% refund rates on it. If you are not aggressive in your sales tactics then you will find affiliates tend to promote the stuff that is more aggressive, typically optimizing for yield rather than promoting what is best. That is how self-interested economics works.

Why You Should Give Something Away

The way to get around with having to compete with that sort of stuff is to rely on a freemium model.

In spite of the negative impacts of freetards, giving something away is almost a requirement of online marketing today in many competitive markets, particularly if you do not want to scam people & you are not sitting on an established brand and a mountain of cash.

You give some stuff away and set up a sales funnel, while hoping to eventually sell something else. This, in turn, is the tricky part. As soon as you set up *any* barriers you will get tons of complaints. If you optimize for minimizing complaints you would have to stop selling anything and just get a job working at Wal-Mart being paid just enough to live on (after you add in your food stamp income).

What Are You Optimizing?

Support is *not* free. Especially after you become popular and the value of your time increases. If people are too lazy to read the instructions or are too incompetent to follow directions they need to eat that. If you try to 'help' them they will not only eat your time, but also make your employees want to quit:

In talking with other plugin developers, it seems fairly universal that the reward for a successful plugin is a deluge of support email that includes the worst kind of sense of entitlement, rudeness and ignorance. The community as a whole seems to expect to be able to pay nothing, yet received expert and individual help and support for free.

One of my goals with WordPress HelpCenter was to try to affect change in this area. My belief was that we could work with plugin developers to have them send support requests to WPHC, have WPHC provide commercial support services, and give a revenue stream back to the plugin developers. While WPHC has been successful overall, it has utterly failed in this effort. What we found was that regardless of the actual issue, users experiencing trouble with a plugin blame the plugin. They assume it’s a coding problem (even though it isn’t in most cases), expect free support and are so rude that we’ve lost people from our team as a result

I would say anyone who pays you nothing and then steals your time *AND* your employees is the exact opposite of a customer: a freetard!

To clarify, all people who use your free stuff are not freetards, but the people who use it incompetently then curse at you and demand phone support and such certainly are freetards.

Ultimately you are not optimizing for the 99% of people who come across your website and never spend a Dollar. You are instead optimizing for the people who are considering purchasing. This gives you a diametric view of the market, where the same content receives a wide range of responses, which range from...

... right on through to ...

If you optimize to make that first person happy it means you lack internal respect and are throwing away over half of your income, because the second person won't have a sales funnel to build trust in you.

You can put an unsubscribe link in every email (we do), allow people to opt into the auto-responder or choose not to (we do), but you can't stop a person from taking steroids and/or missing their medication. A marketer who sets up a free email subscription on a site about marketing and then is angry about receiving free marketing tips is a complete idiot.

When people are polite (like the second example) I respond right back and try to help them as best I can. When someone acts like a steroid addicted enraged freetard who missed this morning's medications (like the first message, from K. Boostrom) I either ignore them or tell them to screw off. I usually ignore them, but when they provide curse words AND threats then they typically get a response. ;)

What constructive advice can you glean from

Because media and many software products have no cost to consumers people think that everything online (except whatever they sell) should be free. Not only should products be free, but so should services. Look at this lovely email from France

Note that it starts off with the obligatory insult, then complains about all the free stuff we offer AND the free content we give away. They then suggest I should SPEND my time and my money to give them a free consult. He also wants me to schedule my life around him being half-way around the world. The flip side of that is I have received numerous 3am wake up calls from people who looked up my phone number from our whois and decided I would like to have a chat about how incompetent they are.

I wish I could tell you that the above was a remarkable outlier, but sadly, such interactions are becoming more common. Hence using private registration.

The web is a great economic force. It makes information more accessible and for free. Many millionaires and billion Dollar companies are built on free open source software. But the reason open source software is free is that there are other means of monetization:

  • support is not free and/or
  • the site is a PageRank funnel to another monetized website (see Wikipedia/Wikia & Wordpress.org/Wordpress.com/Foodpress) and/or
  • the software builds network effects and/or awareness that builds stature, which can be monetized in other ways
  • the software acts as a recruitment tool to attract employees
  • etc etc etc

Help Wanted: Millionaire Seeking Free SEO Consultant

Some people might say that "well the freetards are just staring out, so you need to give them the benefit of the doubt." And part of why we offer so much for free is that I do remember where I came from and we do try to help people out. A lot!

But some of the freetards are anything but poor. Case in point:

Freetard vs Customer

How does Wordnet define a client?

Client:

  • a person who seeks the advice of a lawyer
  • customer: someone who pays for goods or services

Prospective customers can make absurd claims and announce desires that will clearly lose you money but they are NOT your customer until they pay you. And even then, if they are abusive you have the right to terminate the relationship.

Freetards ACT like they have paid you and want the benefits of your services without paying a cent.

In the years to come these trends mentioned above will only accelerate. And that means that you have to make a choice on who you want to work for and what you want your work life to be like. You can choose your customers or let them choose you. But part of the process needs to be filtering what you don't want, lest you end up with freetards threatening to give your paying customers a beat down.

Upgrades Coming Soon(ish) :)

I already mentioned this to our subscribers & affiliates, but we are pausing the ability to subscribe to our membership site so we can perform upgrades.

We want to update Drupal, launch the new site design, and switch out the membership management software from what has become sorta big and hairy to a platform that is pre-packaged & thus more manageable. Doing this will allow us to accept payments on-site, offer a couple different tiers of access, allow me to segment some aspects of customer support to make some of the account management stuff easier to do by staff.

The end goal of this upgrade is to make the site look more modern & cohesive, and make it so we are spending more of our resources on creating new content & tools and less on management of the underlying software & such.

When we shifted to a membership site a couple years ago I didn't appreciate the level of success it would achieve & I didn't realize how some of the smaller bugs would become larger issues as our site grew. Most of those bugs have been fixed, but there are still a few ghosts & we are sorta limited by spending resources on re-creating the wheel, rather than buying wheels & then layering more value on top. :)

I still intend to be involved in the site daily, but for my health (and sanity) it really makes sense to leverage division of labor on some of the administrative stuff, rather than burning myself out trying to manage every aspect of everything. Our employees are great & now we just need to implement systems that help them be greater(er). :D

We are aiming to open back up sometime in mid-January. The blog and site will still continue, but given the number of databases the site currently has & how it syncs up with Paypal it is likely best for us to close off new subscriptions while we are changing stuff around.

We could try switching stuff while keeping everything active, but the big issue there is if any weird anomalies happen then that is probably more stress than I would care to deal with. I love the site & I want to keep it that way (vs pull my hair out due to putting too much stress on myself). :D

If you want to be notified when we re-open please comment on this post & we will email everyone who commented once we have relaunched under the new system & tested everything out. :)

Hope the holidays go well for you & more to come when we make some significant progress with these changes.

Google - Now With More Google in Your Google TM

Ben Edelman did it again :)

This time he highlighted how Google hard codes their search results:

[When] we roll[ed] out Google Finance, we did put the Google link first. It seems only fair right, we do all the work for the search page and all these other things, so we do put it first... That has actually been our policy, since then, because of Finance. So for Google Maps again, it's the first link. - Marissa Mayer

If they gain certain privileges in the marketplace by claiming to not abuse their power and that their algorithmic results are neutral, but those algorithmic results may be pushed below the fold, then is it "only fair" for them to put themselves in a default market leading position in any category they feel they can make money from by selling ads in? Or is that an abuse of power?

As Google adds features, collects more data, puts ads everywhere, and pushes into being a publisher on more fronts, at some point there will be a straw that breaks the camel's back. Big money is paying attention and the list of "evidence" grows weekly. Sometimes they still think like a start up. And that will lead to their demise.

It might not be anytime soon, but eventually they will hit a whammy.

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.

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