John Battelle tells the story about Bill Gross's arbitrage candy selling as a kid, and how he later came to form GoTo, which pioneered the underlying business model that currently powers search.
I heavily practiced arbitrage with baseball cards when I was young. Below is my arbitrage story.
When I was 10 I remember this one guy had a game where it costed 50 cents to roll dice and win the prize. I kept landing packs of the first run 1990 Donruss baseball cards with the Harold Baines reverse negative and other error cards. I kept selling the packs for $3 - $5 to other dealiers, to go back and do more rolling. By the time the day was done I had a Tony Gwynn rookie, a Brett Saberhagan rookie, and about a couple hundred dollars worth of other cards from $5 spent on the roll a dice game.
Around the same time I remember buying Score Dream Team cards in bulk near book price and selling them to a dealer two tables over for double book price.
In high school I started selling baseball cards. I would buy cards out of people's 3 for a dime and quarter boxes and sell the cards for $1 each. It was an easy sell to have a huge case full of cards worth 25 cents to $4 each and organize them by player and just price them all at $1 each. It allowed people who did not collect baseball cards to start buying their favorite player at my table.
Sorry for the tangent...arbitrage is such a yummy topic. I don't collect baseball cards much anymore, but those are some fond childhood memories :)
Some people are so annoying that they are comment worthy. Although some of my friends may like him, I absolutely can't stand Michael Martinez. This thread shows well how annoying he is.
He is one of the give me proof crowd, that always wants all your proof while he makes crap up and throws it out there as fact. A few months back I showed him some screenshots and he called it smoke and mirrors.
This is not some sort of retribution post or anything like that, just reminding people that sometimes being annoying can hurt or help build linkage data.
Sometimes people do not realize how annoying they are. Other times people know exactly how annoying they are and do it for attention or linkage data. For most people the annoying way is probably not the best way to build linkage data and brand, but Michael Martinez - as wrong as he may be - is still far more memorable than most people in the SEO market.
SearchEngineWatch, a decade in the making, sold along with ClickZ and the Search Engine Strategies conference for only $43 million.
IndustryBrains, a small rather obscure contextual network recently sold for $31 million. Sure they have a few good publishing partners, but their business model is absurdly easy to replicate.
Many advertising companies depend on large off the web media organizations being inept at selling online media. As time passes and consolidation continues many obscure businesses relying on market ineffiencies will watch their business models erode.
I find it mind boggling that IndustryBrains sold for about the same amount as SearchEngineWatch did, but many people have stated they think SEW was underpriced or there is something missing in the story, and Jupiter's stock was down sharply today on slower image sales growth.
The point of this post though was that the single most authoritative voice on search was priced at about the same amount as a third tier contextual ad seller, which goes to show how much money there is in search ads and contexual ads.
I don't blog to make money. I don't run ads on my site. I don't even blog to win awards. I blog because it pleases me to see my ideas spread. I like it when I see people talking about one of my ideas--without even mentioning where the idea came from. That means it's the idea that spread, not my brand. Which is the whole point.
For me, anyway. Not for you or for her or for him.
And that's the tricky part about marketing to ego. Everybody feeds their ego in a different way.
While I sell an ebook on this site I am sorta the same way on that front, entirely ego driven. I like helping people and I like links.
A friend of mine asked me how much money was my goal for the year and I said I will measure my success in HTML links. He told me I could get that with blogspam and FFA pages, but I believe those are only part of a well rounded link building campaign ;)
On a related note, congrats to Gurtie, who already owns 6 of the top 7 Google Gurtie results. She recently stopped targeting TheGurtster because, as she states, "it was too easy".
In a recent Fast Company article Sergey Brin stated that he thought Google still has the ability to attract the right kind of people because they have the ability to feed their ego:
"Here's the way I think of it," he says. "Is this the place I would want to work if I were graduating from a PhD program now?" Brin and Larry Page were pursuing doctorates at Stanford when they founded Google, which they now run together with Eric Schmidt, a veteran executive who had worked at Sun and Novell.
"Yes," he answers. Why? The key reason is that Google lets brilliant computer scientists work on "great technical problems" that provide the intellectual stimulation and challenge they crave. "Artificial intelligence, complex systems, user interface -- all the things I studied as a graduate student, we hit the limits of," he says.
What fills your ego? Do your offers fill the egos of those you want to do business with?
seeing an accurate indication of PageRank (connectivity data) -or-
predicting what the social importance of a site or idea should be and will eventually go to (perhaps even before the site or idea is launched)
Sometimes our own successes hold us back (as we fear change and need to be financially viable until we land the really good ideas). I have a killer idea, but am unsure when I will have enough time and motivation to do it.
I want to rebrand a site soon, I am currently building at least 3 or 4 SEO tools (one of them is taking way longer than I intended), I will be going on at least 4 trips in the next 2 months, and I may have Jury duty in October. Meanwhile I have to blog away, update my ebook, read at least 3 books, interview about 15 people, do SEO for a few websites, start exercising again, and get a hair cut. :)
If I'm paying for links, I want a lot more tangible evidence from the site owner. I want stats that tell me how visible the links are across all major search engines, how much traffic they send, and how much traffic they attract overall. I want to see the site owner is a savvy online marketer and is an authority in his community or is developing a presence as such. I need to know he understands and uses analytics to provide tactical data. This is sound, useful marketing intelligence. It's a lot more important to me than a meaningless 4 or 5 in a little sprinkling of green fairy dust above the pages.
Sure if you are paying a ton of money you want to have some evidence backing up the link price, but due to my business model (which lacks recurring revenue) I am willing to take gambles buying many cheap links knowing the owner may not realize the value of them (something like US Web does, but usually with a bit more tact).
Most webmasters know nothing about tracking and most successful web based businesses can not compete with the largest ones on all aspects, and thus must look for market inefficiencies to help market their sites until they tap viral marketing and their business models mutate to become more competitive with the industry leaders.
I would prefer to buy links from people who may not necissarily understand the market value of their links. I don't want the average link selling webmaster to be marketing savvy. Think how bad it would suck if you had to pay full market value for every link you bought. It would end up becoming a zero sum market like AdWords.
I bought links which quickly increased in price by over 300% for anyone who followed. A few times I did it based primarily on PageRank because I knew to have PR8 internal pages the site had to have solid connectivity data, but most of those type of link buys were over a year ago and when I did it the linking page were typically virgin and this site was a bit (maybe a lot) more obscure than it is today.
Of course due to many people reading these blog posts and looking through linkage data that sort of stuff does not last very long if I get those types of links for this site (which is perhaps a good example of why it is sometimes better to dominate low key categories than to try to compete in overtly competitive high profile ones).
I helped a friend market one of their websites, which only retails one type of product for one manufacturer, and on under $1,000 a month ad spend their site sells well over twice as much as this one does (and their site does not have much original / unique / compelling content).
I have been a bit lazy with link building recently, but for a while I was in the top 10 of Google for SEO (currently #7) & search engine marketing (currently #15) with 2 different sites on well under $1,000 of monthly link spend, due in large part to buying or renting low power links for under fair market value.
The most powerful links are no doubt worth a pretty penny to many business models, but sometimes it is just cheaper to give those people a good reason / excuse to link at you instead of trying to buy ads, and if you can't do that then the links may not be worth buying if you have to pay full market value for them.
Outside of SearchEngineWatch, DMOZ, & Yahoo! this site has few on topic high power links from official type resources. I have bought or rented:
many cheap on topic links from low power sites
a few off topic links from sites with great webwide connectivity
and this site ranks well for a wide variety of search related terms without significant ad spend.
***Disclaimer: I am not saying my time is an unlimited free resource, but am saying that spending a bit of time finding underpriced links may be a better link buying route than expecting webmasters to come up with numbers and justifications for expensive link prices.***
Amazon spends about two inches of each product page advertising other websites. Although this generates revenue, the average e-commerce site should be ashamed if it can't make far more money selling to a hot lead who's already investigating one of its own products. Amazon's position as the default place to buy books is so strong that it can afford to send shoppers off to other sites, knowing they'll return later and buy the book anyway. You can't make the same assumption. Sell to your prospects, rather than throw them away.
Many people have stated contextual ads provided a low effort passive income stream without doing much damage to the main income streams. The only way you can be sure whether or not ads are right for your sites is to test.
Jakob should probably step away from his ideals and visit a bit of reality before calling good business logic a shameful activity.
An uproar over hidden, sexually explicit scenes in the video game "Grand Theft Auto: San Andreas" spread to the halls of Congress on Monday.
How much marketing $$,$$$,$$$.$$ is THAT exposure worth? Games are already going for over $70 on eBay.
You run around as a kid learning various psychic tricks, and you jump into the minds of various people to collect their thought figments, clear their mental cobwebs, and fix their problems.
If you pick up some of the trends it may make it easier to see what drives other people to do things, which would make link requests, writing linkable articles, and creating linkable tools much easier. Psychonauts is amazing.
What other fun video games help teach good marketing?
Commission Junction is one of the largest third party affiliate marketing networks. Every year they hold a conference out in Santa Barbra. This year it is occuring from September 18-20th.
I have not done much affiliate marketing yet, but was wondering is there good value in going to CJU? I believe they sell out early, so anyone gone and recommend it? Is there value in going? Is it just for really new people? Do you think I would probably learn a bunch, or make good contacts by going?
So a person recently sent me an email asking if I would be interested in reviewing the top ranked sites for particular competitive keywords each month, stating why I think each of the sites are there (currently a large factor in that is of course linkage data, but some of the factors will change over time as SEO becomes more complex and search engines use user feedback).
Is there a business model in selling that as a general monthly subscription service? I can see a $20 to $200 monthly subscription fee for exceptionally in depth ones that cover why all the top ranked sites rank for a specific broad term. Perhaps the initial release could be free to build a buzz and backdated ones could also be sold one off for a greater amount to create another revenue stream and make the subscriptions seem like a better deal. Maybe even let subscribers suggest and / or bid to see what terms they would like covered.
Perhaps should someone sell specific competitive intelligence SEO reports? I am sure the specific reports could easily fetch anywhere from $100 to $30,000 depending on how they were marketed and how much care and personalization was placed in creating them. I know whatever I charged I could certainly deliver at least that much value to the right customers.
Is it bad karma to uncover the work of others and make it public? I could imagine that could make some enemies or legal fees quickly, but people have not been spending as much as one would expect on research and some of the competitive intelligence products are not exceptionally in depth for their prices. After paying a couple hundred dollars to try Keyword Intellignece I was less than impressed by the features and lack of depth of their keyword research information.
So the questions are:
Do you think there is a market for such a service?
Is it better to do a subscription generic service or a specialized one?
Do you think the risks and legal expenses outweigh the potential rewards? Top ranking sites for competitive broad phrases probably have lots of money and may have used at least some shady techniques to get there. I can't imagine people like their errors and techniques going public.
What would you be willing to pay for said services?
What all information would you want on the reports?
Does anyone offer any services like these yet? If not, why isn't someone doing this yet? There has got to be a ton of money to be made. There has to be some demand there for real time SEO competitive knowledge case studies.
The post in and of itself is not that interesting, but the conversation below it is. Nick GrayWolf threw something out there that might have been good or might have been bad, and the audience decided. From that thread it appears some of the things surrounding the affiliate list are a bit dodgy. Hate threads always suck (and I have been the featured guest of many of them), but this thread is prettymuch a how to guide on piss poor word of mouth marketing.
Jeff Molander, the creator of the Affiliate List, jumped in the thread to try to defend his product, but berates anyone who does not see eye to eye with his position. Some people on the list want off it and Jeff does not appear keen on letting them off. In escence he is selling contact data about people who stated they do not want to be contacted.
Jeff appears to be forgetting the memory of the web. At one point in time he talks of gaining access to proprietary data
If it remains a mystery as to where I've seen the data (that allows me to pass judgment on retail focused affiliates) after helping found an affiliate network, lead the sales effort at the leading affiliate data services provider and manage dozens of programs as an outsourced services provider to marketers
and soon he acts as though those words were never wrote.
There are many other contridictions in the thread, but the whole point is that if you are angering a large group of people you should know your words are going to be held against you. The best thing to do is either not participate in the thread, or be accepting of some of the feedback it offers.
You rarely are going to get criticised for playing new, naive, or empanthy cards; typing things like "well I guess I never looked at it that way" or "that's a good point" or "yeah, I probably should fix that. thanks for the great feedback". Whenever you lay the "you are all dumb and this is a bogus hate thread" card it is hard to win over supporters. It becomes hard to see your point of view.
Another important issue Lots0 raised in the thread is that if people have a legitimate opportunity for you then you should be able to seek it out. You shouldn't be ready, willing, and excited to work with most of the people who email or call you up with a deal out of the blue.
Affiliates and marketers should usually chose their products rather than letting affiliate program managers try to chose you. If someone has a great opportunity it is only a matter of time until you should run into it if you are truely interested in the topic.
More than any thread I have read in a long time that thread demonstrates how web conversations are different from other conversations, as the people in the thread gain knowledge and better perspective from each additional post. Jeff is trying to invoke Nick into butchering the thread, but I hope Nick sees past Jeff's juvenile attempts.