Focus on The Business Model

Feb 5th

Google's Take on Search Plus Your World

A few weeks ago Google announced the launch of Search Plus Your World, which deeply integrates social sites (especially Google+) into the Google search experience to make it more personalized.

While Google claimed that the socialization was rather broad-based, the lack of inclusion of Facebook & Twitter along with the excessive promotion of Google+ raised eyebrows. While the launch was claimed to be social for personalizing results, the Google+ promotions appeared on queries where they were clearly not the most relevant result even when users are not logged into a Google account.

Google+ Over-promotion

A couple weeks ago when Google announced Google Search Plus Your World competitors collectively complained about Google over-promoting their own affiliated websites.

Twitter was perhaps the loudest complainer, highlighting how Google basically eats all the above-the-fold real estate with self promotion on this @WWE search.

It is no surprise that folks like Ben Edelman, Scott Cleland & Fair Search chimed in with complaints, as this is just a continuation of Google's path. But the complaints came from a far wider cast of characters on this move: the mainstream press like CNN, free market evangalists like the Economist, Google worshipers indoctrinated in their culture who wrote a book on Google & even ex-Googlers now call into question Google's transparently self serving nature:

I think Google as an organization has moved on; they’re focussed now on market position, not making the world better. Which makes me sad.

Google is too powerful, too arrogant, too entrenched to be worth our love. Let them defend themselves, I'd rather devote my emotional energy to the upstarts and startups. They deserve our passion.

The FTC's Google antitrust probe is to expand to include a review of Google+ integration in the search results.

Facebook & Twitter launched a don't be evil plugin named Focus On The User, which replaces Google+ promotion with promotion of profiles from Facebook& Twitter.

For the top tier broad social networks framing the idea of integrating promotion of their networks directly in the search results is a natural & desirable conclusion, but is that just a convenient answer to the wrong question?

  • Whether Google ranks any particular organic result above the corresponding Bing ranking in Google's now below-the-fold organic results is a bit irrelevant when the above the fold results are almost entirely Google.com. But is the core problem that we are under-representing social media in the search results? According to Compete.com, Facebook & YouTube combine to capture about 16% of all downstream Google clicks. Do we really need to increase that number until the web has a total of 5 websites on it? What benefit do we get out of a web that is just a couple big walled gardens?
  • If Facebook is already getting something like 20% of US pageviews & users are still looking for information elsewhere, doesn't that indicate that they probably desire something else? Absolutely Facebook should rank for Facebook navigational queries, but given all their notes spam, I don't like seeing them in the search results much more than seeing a site like eHow.
  • The he said / she said data deals are also highly irrelevant. What is really needed is further context. Before Google inserted Google+ in their search results the Google+ social network was far less successful than MySpace (which recently sold for only $35 million). If social media is added as an annotation to other 3rd party listings then I think that has the opportunity to add valuable context, but where a thin "me too" styled social media post replaces the publisher content it lowers the utility of the search results & wastes searcher's time. Further, when those social media results are little more than human-powered content scrapers it also destroys the business models of legitimate online publishers.

Over-promotion vs "Search Spam"

At any point Google can promote one of their new verticals in a prominent location in the search results & if they are anywhere near as good as the market leader eventually they can beat them out of nothing more than the combination of superior search placement, monopoly search marketshare, account bundling & user laziness. What's more, they can make paid products free and/or partner with competitors 2 through x in an attempt to destroy the business model of anyone they couldn't acquire (talk to Groupon).

Amit Singhal is obviously a brilliant guy, but I thought some of the answers he gave during a recent interview by Danny Sullivan were quite evasive & perhaps a bit inauthentic. In particular, ...

  • "The overall takeaway that I have in my mind is that people are judging a product and an overall direction that we have in the first two weeks of a launch, where we are producing a product for the long term." If the product wasn't ready for prime time you were not required to mix it directly into the organic search results right off the bat. It could have been placed at the bottom of the search results, like the "Ask on Google" links were. Bing has been working on social search for 18 months & describes their moves as "being very conservative."
  • "The user feedback we have been getting has been almost the other side of the reaction we’ve seen in the blogosphere." Of course publishers who see their content getting scraped & see the scraped copy outranking the original have a financial incentive to care about a free & automated scraper site displacing their work. They don't get those pageviews, they don't get that referrer data, and they don't get those ad impressions. Google's PR team is anything but impressed when another company dares do that to Google.
  • "The users who have seen this in the wild are liking it, and our initial data analysis is showing the same." Much like the Google Webmaster Tools shows that pages with a +1 in the search results get a higher CTR, this Google+ social stuff also suffers from the same type of sampling bias & giving the listings a larger and more graphical stand out further help them pull in much more clicks. Any form of visual highlighting & listing differentiation can lift CTR. I might be likely to click on some of my own results more, but when I do so you might just be grabbing a slice of navigational searches I was going to do anyway where I was looking for something else I posted on Google+ or my Google+ account or the account of a friend & so on. Further, aggregate data hides many data points that are counter to the general trend. I have seen instances of branded searches where the #1 organic site was getting a CTR above 70% (it even had organic sitelinks, further indicating it was a navigational search) and for such a search in some cases there were 2 Adwords ads above the organic results & then the Google+ page for a brand outranked the associated brand in the SERPs for those who followed it! That is a terrible user experience, particularly since the + page hasn't even had any activity for months.
  • "Every time a real user is getting those results, they really are delighted. Given how personal this product is, you can only judge it based on personal experiences or by aggregate numbers you can observe through click-through." First, publishers are not fake users. Secondly, as mentioned above, there is a sampling bias & the + listings stand out with larger & more graphical listings. If they didn't get a higher CTR that would mean they were *really* irrelevant.
  • "out of the gate, whereas we had limited users to train this system with, I’m actually very happy with the outcome of the personal results." They could have been placed at the bottom of the search results or off to the side or some such until there was greater confidence in the training set.
  • "People are coming to a conclusion about the product today, within the first two weeks, and they’re not fully seeing the potential where we can build this product around real identities and real relationships." If a publisher promotes a site to the top of the search results & then says something like 'we will improve quality later' they are branded as spammers. In the past Google has justified penalizing a site based on its old content that no longer exists on the site. Investing in depth, quality & volume is a cycle. If others get prohibited from evolving through the cycles due to algorithms like Panda then it becomes quite hard to compete as a new start up when Google can just insert whatever it wants right near the top & then work on quality after the fact.
  • "We don’t think of this as a promotional unit now. This is a place that you would find people with real identities who would be interesting for your queries." If this is the case then why does it only promote Google+?
  • "We’re very open to incorporating information from other services, but that needs to be done on terms that wouldn’t change in a short period of time and make our products vanish." The problem is, if a company builds a reputation as a secretive one that clones the work of its partners & customers then people don't want to do open-ended transparent relationships. Naive folks might need to see the blood and tears 3 or 4 times to pick up on the trend, but even the slowest of the slow notice it after a dozen such moves.
  • "I’m just very wary of building a product where the terms can be changed." Considering Google's lack of transparency & self-promotional bias on the social networking front, would you be fully transparent and open with Google? If so, then aren't the search algorithms complex enough that it would make sense to make those transparent as well? How can you ask other social networks to increase transparency at the same time Google is locking down their search data on claims of protecting user privacy?
  • "It’s not just about content. It’s about identity, and when you start talking about these things and what it takes to build this, the data needed is much more than we can publicly crawl." This is where being trustworthy is so crucial. Past interactions with Yelp, TripAdvisor & Groupon likely make future potential partners more risk adverse & cautious. Outrageous "accidents" like those that happened with Mocality & Open Street Map from playing fast and loose further erode credibility. And even when Google hosts the media & has full access to user data they still rank inferior stuff sometimes (like the recent Santorum YouTube cartoon fiasco), even on widely searched core/head keywords.

The big issue is that if people feel the game is rigged they won't have much incentive to share on Google+. I largely only share stuff that is irrelevant to tangentially relevant to our business interests & won't share stuff that is directly relevant, because I don't want to be forced to compete against an inferior version of my own work when the deck is stacked so the inferior version wins simply because it is hosted on Google.

As we move into the information age a lot of physical stores are shutting down. Borders went bust last year. Sears announced the closure of many stores. And many of the people shopping in the physical stores that remain are using cell phones for price comparisons. Given Google's mobile OS share this is another area where they can build trust or burn it. A friend today mentioned how their online prices on Google Product search almost always show a lower price near the header than the lowest price available in the list - sometimes by a substantial margin.

Identity vs Anonymous Contractors

In the past we have mentioned that transparency is often a self-serving & hypocritical policy by those atop power systems who want to limit the power of those whom they aim to control.

When Google was caught promoting illegal drug ads there was no individual who took the blame for it. When the Mocality scraping & the Open Street Map vandalism issues happened, all that we were told was that Google "was mortified" and it was "a contractor." If people who did hit jobs could just place all the blame on "the contractor" then the world would be a pretty crappy place!

Eric Schmidt warned that "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place." That sage advice came from the same Eric Schmidt that blackballed cNet for positing personal information about him. Around the same time Eric offered the above quote, Google was engaged in secret & illegal backdoor deals with direct competitors to harm their own employees.

What happened to Google recruiters who dared to go against the illegal pact? They were fired on the hour:

"Can you get this stopped and let me know why this is happening?" Schmidt wrote.

Google's staffing director responded that the employee who contacted the Apple engineer "will be terminated within the hour."

When Google+ launched they demanded that you use your real name or don't use the product. They later claimed that you can use a nickname on your account as well, but there is a difference between a nickname and pseudonyms.

What is so outrageous about the claims for this need for real identities is that past studies have shown that pseudonymous comments are best & Bruce Schneier highlighted how we lose our individuality if we are under an ever-watchful eye:

Cardinal Richelieu understood the value of surveillance when he famously said, "If one would give me six lines written by the hand of the most honest man, I would find something in them to have him hanged." Watch someone long enough, and you'll find something to arrest -- or just blackmail -- with. Privacy is important because without it, surveillance information will be abused: to peep, to sell to marketers and to spy on political enemies -- whoever they happen to be at the time.

Privacy protects us from abuses by those in power, even if we're doing nothing wrong at the time of surveillance.

In many markets ads and content are blended in a way that is hard to distingush between them. Whenever Google wants to enter they can demand greater transparency to participate (and then use the standard formatted data from that transparency to create a meta-competitor in the market.)

Increasingly Google is placing more of their search data & their webmaster-related functions behind a registration wall. If you are rich & powerful they will sell you the data. If you are the wrong type of webmaster that aggregate data can be used in *exceptionally* personal ways.

User Privacy

Ahead of Google updating their privacy policy Google has directed a large portion of their ad budget toward ads about how they protect users online.

What better way to ensure user privacy than to allow them to register their accounts under psydonyms? The real name policy on Google+ was part of what made Google want to stop providing referrer data for logged in users who search on Google. This has had a knock on effect where other social sites are framing everything, requiring registration to read more of public user generated content & sending outbound traffic through redirects.

Google's new privacy policy allows them to blend your user data from one service into refining the experience (and ads) on another:

If you’re signed into Google, we can do things like suggest search queries – or tailor your search results – based on the interests you’ve expressed in Google+, Gmail, and YouTube. We’ll better understand which version of Pink or Jaguar you’re searching for and get you those results faster.

Google & Facebook's war (against) user privacy is catching media and governmental attention. Microsoft highlighted some of Google's issues in their "putting people first" ad campaign & the blowback has caused Google not only to publish PR-spin "get the facts" styled blog posts, but to launch yet another ad campaign.

EU regulators have asked Google to pause their privacy policy changes.

Bogus Testimonials & Social Payola

Is social media a cleaner signal than links? If search engines put the same weight on social media that they put on links it would get spammed to bits. It won't be long until a firm like Ad.ly offers sponsored Google+ posts.

Some have suggested that you won't be able to buy Google+ followers however Google already includes user pictures on AdWords ads (even when they desire not to be & even when they didn't endorse the product that Google suggests they endorsed). In due time I expect Google will indeed sell followers & other user interactions as ad units (just like Twitter & Facebook do).

Further, celebrities sell Tweets to advertisers. When they are hot their rates go up:

When Ad.ly introduced self-destructing Charlie Sheen to Twitter, he was paid about $50,000 per tweet. It was worth it. Sheen’s tweet for Internships.com generated 95,333 clicks in the first hour and 450,000 clicks in 48 hours, created a worldwide trending topic out of #tigerbloodintern, attracted 82,148 internship applications from 181 countries, and added 1 million additional visits to Internships.com.

Search engines might consider these to be clean signals if those same search engines were not busy buying the manipulation of said "relevancy" signals.

Attention is purchased to create demand. It isn't comfortable to put it this way, but we are trained to obey authority & to like what others like:

The average Facebook user has 130 friends, which equates with four degrees of separation to thousands of people, Mr. Fischer said. Metrics like that led him to believe that if Facebook could figure out a way to capitalize on "social endorsements," it would be like creating a word-of-mouth campaign that could reach millions of people simultaneously. Since the campaigns would come from a friend, they would theoretically be taken more seriously than, say, a TV commercial, he said.

On an individual basis reviews and ratings get faked everywhere. Even stodgy old slow-moving institutions like colleges game their ranking systems.

There recently was a question raised about how Google's rating systems skewed high on the underlying data. Surely Overstock (the same Overstock Google penalized earlier this year) wouldn't promote Google's trusted stores aggressively on their own site if it made their business appear worse than it actually is, thus a positive bias must be baked in to the system.

Entire categories of demand are created by those tied in with power cost shifting to create bubbles. The federal reserve helped spark a real estate bubble with low interest rates. FBI warnings of mortgage fraud were ignored. Consumers were constantly fed propaganda about "real estate only goes up." Then when that bubble popped, the US government bailed out those who caused it & burned trillions of Dollars propping up home prices. The government even bailed out a company that is now shorting the housing market (when that company was about to get bailed out the secretary of treasury leaked that material non-public information to some of his criminal investor buddies).

Does all the above sound circular, conflicting, corrupt & confusing? It should, because that is how power works & comes off as seeming semi-legitimate when acting in illigitimate ways. The perception of reality is warped to create profitable opportunties that are monetized on the way up and the way down.

Millions of kids take drugs that address the symptoms of being a child full of energy, imagination & entusiasm. In some cases they may need them, but in most cases they probably don't. The solution with the highest economic return gets the largest ad budget, even if it only treats symptoms.

Web Scrape Plus+ (Now With More Scraping)

When the +1 button & Google+ launched, Google highlighted how they would use the + button usage as a "relevancy" signal. Google recently started inserting + pages directly into the search results for brands & right from the very start they were using it as a scraper website that would outrank the original content source.

Google used the buy in from their promised relevancy signal to create a badge-based incentivized system which acts as a glorified PageRank funnel to further juice the rankings of these new pages on a domain name that already had a PageRank 10.

I recently read a blog post about how anyone could do the above & the opportunity is open to everyone. But the truth is, I can't state that something will become a relevancy signal that manipulates the search results in order to get buy in. Or, if I did something which actually had the same net effect, Google would likely chop my legs off for promoting a link scheme.

Recently the topic of Google+ as a scraper site came up yet again via Read Write Web & on Hacker News a Googler stated that it was "childish" to place any of the blame on Google!!!!!!

Google determines how much information is shown near each listing & can create "relevancy" signals in ways that things tied to Google get over-represented (look at the +1 count here). When they do that & it destroys other business models *of course* Google deserves 100% of the blame.

Thin Content & Scraper Sites

Remember the whole justification for Panda was that thin content was a poor user experience?

In spite of sites like eHow getting hit, Google is still pre-paying them to upload content to Youtube.

Now that the (non-Google hosted) thin content has been disappeared (and the % of downstream traffic from Google to Youtube has more then doubled in the past year) it is time for Google to take another slice of the search traffic stream with Search Plus Your World:

The Google vs Facebook locked down walled garden contest will retard innovation. As the corporate internet silos grow larger the independent web withers. Them going after each other may leave room for Twitter, but it doesn't leave lots of room is left for others, as the economics of publishing have to work or the publishers die.

Start ups that were on a successful trajectory were killed by Panda:

The startup had been on a roll up until last February when Google altered its ranking algorithm with the release of “Panda.” The changes decimated TeachStreet’s traffic, and the company never quite recovered.

“We lost a lot of our traffic, and overnight we started talking to partners for biz dev, not for acquisition,” he said. However, many of the potential partners wanted to know about an outright acquisition.

About.com was also smoked by Google:

The biggest worry, though, is that the decline of About.com itself may be irreversible. Fewer people are clicking on About ads placed by Google and the site’s own display ads have dropped in value.

The company has attributed this decline in value to Google’s decision last year to downgrade About pages in its search results. With more than 80% of traffic coming from search, the Google denigration was indeed a blow but About’s problems may be rooted in something deeper.

Keep in mind that the reason these websites were hit was that they were claimed to be thin & thus a poor user experience. When the NYT bought About.com one of the top competing bidders was Google!

Now that the "thin content" has been demoted in the search results Google can integrate deep content silos from Google+, like this one:

That is an 8-word Google+ post about how short another blog post is. I like Todd & do like to read his writings, but here Google is clearly favoring the same sort of content they would have torched if it was done on an independent webmaster's website.

How Google has raters view other websites that redirect traffic is based upon those sites having a substantial value add. Clearly in the above example there was nothing added to the interaction beyond sharing a bookmark with a punchy tagline.

If Google wants to use the + notation to pull up that other referenced page then perhaps that can make sense, but to list an 8-word Google+ page in the search results nearly a year after the Panda algorithm is outrageous. This sort of casual mention integration in the search results occurs on expensive keywords as well. Not only do they list your own Google+ posts...

...but they also list them from anyone you follow...

In addition to information pollution, the other big issue here is time. Google wants to make forms more standardized to make filling them out faster & they give regular sermons on the importance of fast search results. Yet when I do a navigational search, Google delivers two AdWords ads, a huge Google+ promotion, and then the navigational search result barely above the fold.*

*Since I thought the above was obnoxious, I renamed our Google+ company page to S_E_O Book to help Google fix their relevancy problems.

Can anyone explain how Google's speed bias is aligned with putting plus junk right at the top, even on brand searches? Yahoo! has been pretty aggressive with putting shopping ads in the search results, but their implementation is still a better user experience than what Google did above.

And Bing offers an even cleaner experience than that.

Due to how Google integrates Google+ in such a parasitic way I see no incentive for participating on their network except when I have something that is outside of my domain of expertise, something that I am not targeting commercially, something that is thin, or something irrelevant to say! That incentive structure combined with Google's photo meme feature will ensure that content marketers will help plenty of people see Star Wars stuff ranking for mortgage loan search queries.

When you own search/navigation you own language. that position can easily be extended into any other direction/market in a way a social graph can not:

"The only technology I’d rather own than Windows would be English," McNealy said. "All of those who use English would have to pay me a couple hundred dollars a year just for the right to speak English. And then I can charge you upgrades when I add new alphabet characters like ‘n’ and ‘t.’ It would be a wonderful business."

Further, Google can chose at any point to respond to or ignore market regulations in accordance with whatever makes them the most money. They can also fund 3rd parties doing the same (like undermining copyright) to force others to strike an official deal with Google to be "open."

A lot of businesses live on small profit margins, so Google's ability to insert itself & fund criminal 3rd parties aligned with Google's internal longterm interests is a big big big deal. Companies will learn that you either work with Google on Google's terms or you die.

When a public relations issue brews they can quickly change their approach and again position themselves as the white knight.

Brand Equity & Forcing the Brand Buy

Yahoo! put out a research paper highlighting activity bias, stating that the efficacy of online advertising is often over-stated because people who see ads about a topic were already more closely tied in with that particular network & that particular topic before they even saw the ad. As an example, any person who sees an AdWords ad for hemorrhoid treatment was already searching for hemorrhoid-related topics before they saw your ad (thus they were in the subset of individuals that might have came across your site in some way if you were in the search ad ecosystem or not).

This sort of activity bias-driven selection bias (homophily) exists on social networks online & offline.

Google did research on incrementality of ads & they came to the opposite conclusion as Yahoo! did. Google suggested you should buy, buy, buy, even on your own branded keywords. They suggested that testing was expensive (no mention that the only reason it is expensive is because Google chooses not to make such tools easily accessible to advertisers) & that the clicks were so cheap on branded keywords that you should buy, buy, buy. Many advertisers who mix brand & non-brand keywords together don't realize that they are using the "returns" from bidding on their own brand to subsidize over-paying for other keywords.

Google Analytics is the leading & most widely used web analytics program. They can share whatever metrics help them sell more ads (defaulting to crediting the last click for conversions, even if it was on a navigational search to your site) & pull back on features that are not aligned with their business interests (SEO referral data anyone?)

This goes back to Scott McNealy's quote: "The only technology I’d rather own than Windows would be English. All of those who use English would have to pay me a couple hundred dollars a year just for the right to speak English. And then I can charge you upgrades when I add new alphabet characters like ‘n’ and ‘t.’ It would be a wonderful business."

Analysts didn't understand why Google CPC rates were down 8% last quarter while overall search clicks were up 34%. The biggest single reason was likely more clicks on adlinks on branded AdWords ads. While a brand buying its own keyword typically pays far less per click than what some of the biggest keywords go for, the branded keywords typically have an exceptionally high CTR. Those additional clicks dragged down Google's average CPC, but the extra revenue they offered was a big par of the reason why Google was about to grow at 25% even though their display network only grew at 15%.

That slow growth of display is in spite of Youtube now serving over 4 billion video streams per day & Google adding display ads to log out pages.

Online views are not the same as TV views. A comScore study found that 31% of display ads are never seen. In spite of that, US online advertising will reach nearly $40 billion this year.

Google wants to insert itself as a needed cost of business in the same way credit card companies have.

On Google Maps they put an ad inside your location box.

Even if most people don't participate on Google+, Google can still force advertiser buy in through over-promotion of the network in the search results. On your branded keywords they may drive your organic listing below the fold & put Google+ front & center.

Facebook earnings are still growing much faster than Google's & Facebook encourages advertisers to advertise their Facebook pages, so even when you pay for the click Facebook still keeps the user. Facebook is adding apps to the timeline & is trying to win VEVO music video hosting from YouTube.

While Google is primarily known as a search company, it is getting harder to get off of Google though any channel other than a toll booth. Google keeps driving the organic search results downward, while Google verticals fill up many of the organic results that remain. Many companies already buy Google ads on their own YouTube content. Some buy ads on Google to drive them to their Youtube videos & then buy ads on their own Youtube video to promote their websites. Soon Google will try to push you to buy them on your Google+ page as well. Google is becoming a walled garden:

Google wants to control more elements of your social world now. They don’t just want to be a search engine.

Is that so bad? Maybe not. It’s certainly no different from how other companies, from AOL, to Microsoft, to Apple, to Disney, to Facebook, have viewed the world — as ideally a walled garden, an all-consuming platform that most people use for pretty much every form of entertainment and social interaction.

A lot of people thought that Google was somehow different. They were, of course, wrong.
...
To move forward either as the old Google or Google+, Google needs to be capable of making fair deals with the partner ecosystem. It needs to curb its instinct to kill competing media companies that were actually producing great content that Google helped you find.

I suspect there will be plenty of bloodshed before Google figures that one out.

"This is the path we’re headed down – a single unified, ‘beautiful’ product across everything. If you don’t get that, then you should probably work somewhere else." - Larry Page

Google no longer believes in the concept of the open web. Blame it on Larry Page becoming the CEO, blame it on him talking to Steve Jobs & Steve telling him to make fewer and tighter products, blame it on Google funding eHow, or blame it on basically anything. But if you go back far enough, much of the stuff that is going on now was clearly envisioned a decade ago:

I was lucky enough to chat with Larry one-to- one about his expectations for Google back in 2002. He laid out far-reaching views that had nothing to do with short-term revenue goals, but raised questions about how Google would anticipate the day sensors and memory became so cheap that individuals would record every moment of their lives. He wondered how Google could become like a better version of the RIAA - not just a mediator of digital music licensing - but a marketplace for fair distribution of all forms of digitized content. I left that meeting with a sense that Larry was thinking far more deeply about the future than I was, and I was convinced he would play a large role in shaping it. I would rather jump on board that bullet train than ride a local that never missed a revenue stop but never." - Douglas Edwards

What happens when the Google+ version of your content outranks the version on your own site? And what happens when your branded channel and/or your fans become a vertical ad silo Google sells to your competitors?

I tested submitting a couple posts to Google+ with a Wordtracker top keywords list & valuable keywords (on a cpc*traffic) basis in posts about top keywords. Those posts rank #2 or #3 in Google for many people that follows me. No harm to me since those posts were irrelevant to this site, but if they were about my theme & topic I just would have out-competed myself. When Google outranks you (even with a copy of your content) they get to taste the data again and sell off the attention another time. You only get a slice of that monetization, even when it is your work that is being monetized. Maybe it is great for stuff that is somewhat less relevant and/or keywords that are so competitive that you otherwise wouldn't score for them, but we have to be really careful we don't out-compete ourselves. Though if Googke keeps this up they won't be the only ones monetizing it. Give it a few months and celebrities will be selling sponsored Google+ posts based on some metric created by multiplying search volume, CPC & how many followers they have.

Is Bing Better? Will Enough People Ask That Question to Matter?

For years Google built their reputation as being the search engine that offered the cleanest & fastest search results. They were known for monetizing less aggressively than the competition. But over the past couple years Google has dialed up their ads to where they now send a greater ratio of ad traffic than organic search traffic. One Google engineer recently described the ability to rank highly in Google without buying their ads as being a bug that was getting fixed!

Google's big risk in their coupling of aggressive monetization, aggressive self-promotion & changing how users feel about user privacy is that they can create the perception that users should go elsewhere for for an honest or trustworthy search. This not only builds momentum for smaller search services like DuckDuckGo & Blekko, but has also won praise for Bing from Gizmodo, Dave Winer & The Next Web.

Kill The Bugs!

Feb 3rd

You can learn a lot more about what Google really thinks by reading what their new hires say. They are not yet skilled in the arts of public relations & make major gaffs like this one:

Instead of being able to SEO the entire Internet, businesses can now only affect the search results for a tiny percentage of users. That's a good thing because SEO can't scale, and SEO isn't good for users or the Internet at large.

If you look at the Google experience from the standpoint of customers, it's pretty good. Users get relevant search results and ads. Advertisers get their content on top of everything else. It's a good compromise between advertising and usability, and it works really well. It's a bug that you could rank highly in Google without buying ads, and Google is trying to fix the bug. Manipulating Google results shouldn't be something you feel entitled to be able to do. If you want to rank highly in Google, be relevant for the user currently searching. Engage him in social media or email, provide relevant information about what you're selling, and, generally, be a "good match" for what the user wants. - Googley Jon Rockway

Would love to hear someone more senior confirm this as the official Google company position, however they are too skilled at public relations to make that blunder (at least outside of foreign AdWords ads that tell you to "forget SEO").

Goldilocks SEO

Jan 31st

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From AdSense to SpamSense to Spam Cents

Google announced they rolled out their anti-overly-aggressive-ads algorithm. They didn't give a specific % on how much of the above the fold content can be ads, but suggest using their browser preview tool. Using that tool on Google.com's search results would of course score it as a spam site, but for some small AdSense webmasters that avoided Panda, Google may have drew first blood.

Much Quicker Updates

With a limited number of recoveries nearly a year after Panda, the first bite might seem like a big concern, however the "too many ads" algorithm updates far more frequently than Panda does:

If you decide to update your page layout, the page layout algorithm will automatically reflect the changes as we re-crawl and process enough pages from your site to assess the changes. How long that takes will depend on several factors, including the number of pages on your site and how efficiently Googlebot can crawl the content. On a typical website, it can take several weeks for Googlebot to crawl and process enough pages to reflect layout changes on the site.

And for those who got hit by Panda then tried to make up for those lower ad revenues with more AdSense ad units, they probably just got served round #2 of Panda Express. ;)

Is it Screen Layout, or Something Else?

In the past Google suggested to a nuked AdWords advertiser that more of his above-the-fold real estate should be content than ads.

However Google has such a rich data set with AdSense that I don't think they would just look at layout. If I were them I would factor in all sorts of metrics like

  • AdSense CTR
  • average page views per visitor
  • repeat visits & brand searches
  • bounce rate
  • clickstream data from Chrome & the Google toolbar (so even if you are using other ad networks, they can still sample the data)

Some sites are primarily driven off of mobile views while other sites might be seen on large monitors. When Google sees every page load & measures the CTRs, tacking actual user response is better than guestimating it.

They could come up with some pretty good metrics from those & then for any high traffic/high earning site they could manually review them to see if they deserve to get hit or not & adjust + refine the "algorithm" until those edge cases disappeared. Google's lack of credible competition in contextual & display ads means they can negotiate pretty tough terms with publishers that they feel are not adding enough value to the ecosystem.

It's Not Just Algorithms Cleaning Up AdSense

In addition to these sorts of algorithms, over the past year they have manually hit networks of sites with the doorway pages label & disabled ad serving on sites or entire accounts where they felt there was a bit too much arbitrage. One of our SEO Book members pointed me to this thread where a lot of Pakistani AdSense accounts got torched last October & another sent me a sample termination email from Google similar to this one:

Notice that in the above:

  • There was no claim of click fraud, copyright issues, or anything like that.
  • There was no claim of advertiser complaints.
  • Google offers no customer support phone number, no "you might want to work on this" advice, doesn't list which of the sites in the account they felt could be improved, and RETROACTIVELY nuked past "earnings" ... depending on where it is in the schedule that can amount to anywhere from 30 to 50+ days (I remember Teeceo mentioned how they waited until the day before the AdSense payday to smoke his stuff way back in the day to have maximum impact!)

On Google's latest quarterly earnings call they highlighted how year on year Google's revenues were up 25% but the network revenues only grew at 15%. They also explained the slower network revenue growth as being associated with improved search quality & algorithm updates like Panda.

Left unsaid in such a statement was that until those algorithms rolled out, Google admitted they funded spam. ;) The whole AdSense & content farm problem was created through incentive structures with unintended consequences.

Is the Garbage Disappearing, or Just Moving to a New Landfill?

If you track what is going on with the Google+ over-promotion (long overdue post coming on that front shortly!) or how Google is still pre-paying Demand Media to upload video "content" to Youtube, Google still may be funding the same model, but doing so while gaining a tighter control of relevancy so they can better sort good stuff from crap (when you host content & track user response you have all the metrics in the world to determine how relatively good you think it is). If they over-promote these sites then in the short run they create the same skewed business model problem.

Sure hosting the user experience makes it easier to sort the wheat from the chaff, but the other big risk here is the impact on the rest of the publishing ecosystem. There will be lots of thin spam from popular people on Google+ (anyone launched a celebrity-focused Pay-Per-Plus site yet?) & in-depth editorial content might not be economically feasible in certain categories where there literally is no organic SERP above the fold.

I will complement them on their efforts to clean up some of the worst offenses (from the prior generation of "bad incentives"). If you were hit by it, Panda was every bit as big/brutal as the famous Florida update. If this update is anything near as significant as the Panda update (in how it impacts smaller independent webmasters) then it is going to force more of them/us to move up the value chain.

That may mean pain in the short run, but (for those who take it as a wake up call to develop brand & organic non-search traffic streams) far more rewards in the longrun for those who remain after the herd is thinned.

Working for "The Company"

Larry Page's view on working for the company:

My grandfather was an autoworker, and I have a weapon he manufactured to protect himself from the company that he would carry to work. It's a big iron pipe with a hunk of lead on the head. I think about how far we've come as companies from those days, where workers had to protect themselves from the company.

I think for many SEOs the idea of starting over is painful, but the best SEOs often enjoy the forced evolution & the game of it all. They don't roll over & play dead or forget SEO. And if Google didn't put hard resets in every once in a while, then the big hedge funds would be mopping up the SERPs and cleaning our clocks with the help of Helicopter Ben.

Areas For Improvement

Of course this could be taken as a positive post toward Google (and it mostly is), but I don't want to come across as a fanboi, so I thought I should do a shout out to a couple things they still need to fix in order to be consistent:

  • If Google is going to tell people that thick deep content is needed to gain sustainable exposure then they shouldn't be ranking thin + pages in the SERPs just because it is a Google product. Even people who have *always* given Google the benefit of the doubt (full on fanbois) found the Google+ placement in the SERPs distasteful.
  • Google's AdSense is still sending out some of those automated "you are leaving money on the table" styled emails reminding publishers to use 3 ad units. If such behavior may lead to a smoke job, then the recommendation shouldn't be offered in the first place. Right below the "use 3 ad units" there needs to be a "proceed with caution" styled link (in red) that links to the recent "too many ads" post.
  • Old case studies that are no longer in line with best practices in the current market should have some sort of notice/notification added to them so new webmasters don't get the wrong idea.
  • Some of the AdSense heatmaps are roadmaps to penalization. These should have been fixed before yesterday's announcement, but if they are still up there next week then Google is willfully & intentionally trying to destroy any small business owner that follows that "best practice" advice.

Your Feedback Needed

Since this update impacted far fewer sites than the Panda update, there are fewer sample/example sites. Did any of your websites get hit? If so, how would you describe ...

  • your ad layout
  • your ad CTR
  • you mode of monetization (AdSense, other, both)
  • the level of impact on your site from the update

Is Google Selling Investors Private Search Data?

Jan 18th

This is an interesting play:

BBVA, Spain’s second-largest bank by assets, is teaming up with Google to use its search engine results to provide advanced forecasts of hotel and tourism demand in the country, part of a plan to market real-time economic indicators to its clients.

The bank and internet group will announce on Monday a scheme called the “BBVA-Google tourism activity in Spain indicator”. The first pilot project has focused on measuring advance demand for hotel stays and tourism interest in Spain by using search engine data.

Private investors get to see that search data before anyone else does. If you have a retirement plan invested in stocks, then you are at an asymmetrical information disadvantage because Google is providing an in-depth look at that search data to competing investors who can trade on the information before it is public.

Is search traffic a big deal? Is there enough signal there to matter? Yes. And yes.

I read an investment report earlier today about a company where the hedge fund's rating & valuation was largely based on / justified by the SEO strategy of the underlying company & their current Google rankings...the report even had keyword ranking charts in it!

Was Google paid for giving BBVA access to the above data? Or was it thrown in as a freebie in exchange for getting over 100,000 BBVA workers to switch to the cloud & go Google on the enterprise software front?

If Google has over 90% search marketshare in many EU countries & is willing to leverage proprietary search data to win contracts in other fields, how does anyone compete against that data bundling?

Further, think of all the damage hedge funds & huge banks have done to societies the globe over this past decade & now Google is directly helping the bad guys.

That is Google's approach to their proprietary information: if you invest in their ecosystem and use their analytics tools you can't get your own analytics data (as they have to protect "user privacy"), but they will gladly sell that same data off to someone else.

If there is no public outrage at this "test" then the data units will start getting more granular. Rather than measuring categories Google may sell data on a per-site or per-company basis. Looking at how Google has consistently disintermediated "partners" everywhere else, if Google is feeling bold they may suggest that selling the data to others also permits Google to trade on the data as well.

What's far scarier than an angry search engineer looking at your large paid link buy or a rogue Google "contractor" hacking up your site? A Google hedge fund with a substantial short position on your stock. :D

Recall that Eric Schmidt has stated:

"One day we had a conversation where we figured we could just try and predict the stock market..." Eric Schmidt continues, "and then we decided it was illegal. So we stopped doing that."

Based on Mr. Schmidt's above comment, is it reasonable that Google now profits off leveraging their data for securities analysis? What made the above clearly illegal & what is going on now above board? What's the difference between them? Perhaps a "contractor" layer?

At the same time Google runs sweeping ad campaigns reminding people how Google protects them online, while hosting banking data in the cloud & making themselves a juicier hacking target.

Google warns publishers against using paywalls because it is a poor user experience while wiping out competing lead aggreagtors with new guidelines that are likely impossible to comply with. Sites like Highbeam Research get smoked by algorithms like Panda & the Google works with the folks who already have the legislature in their pocket to get them more data. The lesson here from Google is to provide a clean front end user experience and then sell the data back out the other end.

Everything is fine. Keep shopping (on Google.com + your Android phone)...Google will ensure the data is monetized to its full potential.

Was Google Caught in a Sting Operation in Kenya?

Jan 13th

Wow...this is pretty...um...transparent.

According to this post, Google was caught scraping Mocality, calling the listed businesses, soliciting that they move to Google "Get Your Business Online", disparaged the directory they were scraping in the client call, and then lied about having the permission of the directory they were scraping to try to con businesses into working with Google.

A few select quotes:

There are absolutely no costs, and this will be agreed on before it’s put on… No one will come and tell you like Mocality used to do, someone tells you it’s free and then they come to ask for money. You know that Google doesn’t fool around here.
...
Mocality used to charge people and many of the people who used to be in Mocality we have taken them and transferred them here. Didn’t we also find you on Mocality?
...
Ai…they used to…but some people didn’t used to pay. They [Mocality] used to go and ask people to pay them around Ksh. 20,000 and people refused. It was things like that.)

Google's business model *is* buying or building things that are free and then later pulling back features and/or sneaking costs in on them. Whether it be clubbing Android carriers with compatibility, saying search ads are evil then placing them everywhere, Google Maps API terms changes, terms changes on the Google AdWords API, Google hotel place listings with endless price ads, or keyword (not provided) in web analytics while trying to force you to register in Google Webmaster Tools to get any keyword data at all!

As if that wasn't bad enough, when the fake business asked Google if Mocality was ok with this, this was the exchange:

My question is does Mocality know that you’re getting their con…our contacts from their directory?
~~~
Yah. They know. They know that very well. They have agreed with Google when they were on that thing.

I have long stated that the difference between spam and quality content is who is spamming. With the recent widely criticized over-promotion of Google+ in the search results and this sort of scrape, lie & disintermediate the source Google's true character is shining through.

Facebook & Twitter are smart not to leave the barn door open for Google.

All information wants to be free and wrapped in Google's ads. Or so the saying goes. But until they can be trusted it won't be. They have done A LOT of brand damage to themselves in the past couple months.

Update: Google was mortified that they got caught doing this:

We were mortified to learn that a team of people working on a Google project improperly used Mocality’s data and misrepresented our relationship with Mocality to encourage customers to create new websites. We’ve already unreservedly apologised to Mocality. We’re still investigating exactly how this happened, and as soon as we have all the facts, we’ll be taking the appropriate action with the people involved.

Transparency vs Asymmetrical Information

Jan 8th

"All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth." - Friedrich Nietzsche

Everyone Except Me Should be Open

Being labeled as open or transparent is a great public relations strategy. Executed effectively it gets ditto heads to feel like they are part of a movement and spread your propaganda.

However actually being transparent is often a poor business strategy.

When WordAds opened up someone in the comments suggested that they should win by being open like Google. I read that and laughed. Where Google is losing you can count on them pushing the open label in order to build momentum & destroy the asymmetrical information advantages of existing market leaders. But where Google leads non-transparency is the norm.

A few examples & comparisons:

  • Claiming to run an open auction, while running obfuscated quality metrics that price gouge advertisers.
  • At the same time Google is trying to push social sites to offer transparent data, they decided to block some Google search referral data (unless you are paying for the clicks, then you get that data).
  • When planning some of the features behind Google+ one of their employees wrote a book about the social circles concept with Google's blessings. Then, after he wrote the book, Google revoked permission to publish it!
  • Nuking affiliate links of some websites & then investing in Viglink, a network that automatically turns links into affiliate links.
  • Burning some networks of websites for being doorway pages & then investing in the Whaleshark Media roll up & launching Google Places.
  • Nuking some UK financial comparison sites for link buying & then buying BeatThatQuote.
  • Suggesting 60 or 90 days of penalty is a reasonable penalty for sketchy links & allowing BeatThatQuote to rank 2 weeks after penalizing it without cleaning up any of the paid links.
  • Android is open but internal Google emails revealed that carriers were getting wise to Google using compatibility as a club.
  • Not sharing revenue share stats with AdSense partners for a half-decade.
  • When websites are nuked they are frequently given no explanation. Worse yet, their content often re-appears in the search results on some other domain that stole it, in many cases while being wrapped in AdSense ads.
  • Arbitrarily making it hard to export AdWords campaigns to other services (& making it against the TOS to do same via the API).
  • The Panda update was needed to rid the web of garbage content. And yet Google is pre-paying Demand Media to post videos on YouTube. Since the Panda update downstream Google traffic to YouTube has more than doubled & YouTube is serving over a trillion streams per year!
  • In spite of not having permission to do so, Google has been scanning books for nearly a decade now. Yet whenever Google goes to court they try to get the court documents sealed so that their statements couldn't be used against them.

Judge, Jury, Executioner

Calls for "transparency" in SEO may sound great on their face, but once you peal back the covers the absurdity is laughable. If Google didn't discriminate against certain types of players & if Google didn't compete in the very markets that it judges then perhaps transparency would be a good idea.

However Google is perhaps the single biggest direct competitor in many markets, so to be fully transparent with them when they are the opposite with you is a naive business strategy:

I also disagree that outing each other would make the industry less like a mafia, because SEOs aren't the mafia. SEO is a symbiotic marketing channel reliant on Google, until the next big search engine/method comes along. In a mafioso analogy, Google would be the mafia - as they control the market. Removing all webspam wouldn't necessarily create better search results or a fairer market, as Google still decides who wins and who loses. The biggest winner being Google itself, the next level being their friends.

Secrecy is also the cornerstone of all marketing channels. Social Media for instance works in a similar way to SEO, except they have secret voting methods rather than secret linking methods. You don't see major social media companies outing a rival's voting methods, as it would shine a torch on their own methods. Even outside of marketing, McDonalds probably worked out KFC's magic blend of herbs and spices decades ago, but it's not in their best interest to tell everybody.

Outing webspam helps an SEO blog to keep their UVs up and their VCs happy. It helps a failing newspaper to appear modern and edgy, whilst allowing the contributor to launch a protection racket off the back of another company's misery.

Do You Want SEOs to Seem More Professional?

How often do you see tier-1 public relations firms marketing themselves by smearing other PR firms?

You don't.

You might see a company like Google hire a PR firm to push a bogus study to smear the security of a competitor, but you rarely (if ever) will see one PR firm smear another in the media.

While some of the more intellectually challenged members of the SEO industry associate search spam with molesting children (talk to Google about that after their recent Chrome fiasco), those with a bit of intelligence and/or experience realize that many of the issues are gray and murky. What one person considers as spam one day they later sell as "advanced" months or years down the road. The ecosystem isn't some static black & white code:

The question is less whether black hat and webspam are a good thing or not, but if Google is the unbiased and benevolent instance who shall make the rules. Google is a business and persuits its very own interestes, since it is aware of its market power with a lot of arrogance, aggresivity and obviously double standards. That was also Aaron's point, but seomoz has been missing the point completly in the last time.

I expect an SEO portal/community to focus on how stuff actually works/can work, not to propagate how the monopolist does it want to work. It is their risk of doing business if they decide for an algorithm, not ours. It is our risk however, to decide whether to stick to the rules or not. And it's not only about ethics but has several practical implications...

Full Disclosure Required, Except From Us

On paid links Google claims to require machine AND human readable disclosure. Then on their own site they use an ad color background that literally fades to white on many monitors. Maybe it is legitimate that they are only able to fool some of the users some of the time. But some of their ad initiatives have 0 disclosure at all. None.

That is now part of the "organic" search results, but is that a paid ad?

You wouldn't know by looking at it, but according to the WSJ it is: "Google lists booking links to the airlines as advertisements, but the company declined to comment on how much money it makes from the arrangement."

There is no disclosure that you are in a paid ad funnel until the very last click. And those who fail to pay are either unlisted, listed last, or have a broken booking process where their brand is arbitraged in an attempt to flip the click to somewhere else. According to Leocha, “Google and the airlines have a sweetheart deal with each other, and the consumers are getting screwed.”

In the hotel market Google is also testing comparison ads & price ads.

Notice how little they care about relevancy so long as they keep the click on Google or are paid for the referral. They rank the car rental company Avis as a top Las Vegas hotel! And even the ad links that are sold off of that do not line up. Priceline pushes the Plazzo Luxury Suites & Booking.com pushes the Venitian.

Retarding Investment in the Search Ecosystem

What do you suppose the above behavior does to cash flow & multiples of websites in that vertical? Of course it contracts them & retards investment. Who wants to start a new hotel website at this point? What other verticals have investment held back by the fear of Google's eventual entry?

If you only had to manage competing against other market competitors & staying inside Google's editorial guidelines then investment isn't that difficult, but if you have to stay within Google's guidelines in the short term yet try to build a business that is sustainable even after Google enters & destroys the market it is far more difficult.

Skimming the Cream

At any time Google can enter any market and skim off the cream: "An independent study from Leads360 showed consumers using Google’s comparison ads converted better than any other lead provider."

Other affiliate networks which do not own the search channel have to fight through quality issues if they try to build similar scale.

A Self-serving Bias You Can Count On

When Google enters a market it might buy out a competitor, buy out a supplier, bundle, use predatory pricing, grant themselves superior search placement, adjust the relevancy algorithms and/or editorial guidelines, violate IP, scrape 3rd party content, work with sketchy advertisers & publishers to undermine competing business models, or any combination of the above.

They are rarely transparent with their interests when they enter a market. Almost everything is labeled as "a beta" and "just a test." They promise to "act appropriately" & you may not be aware of the steamroller until you are under it.

Web Scrape Plus+ (Now With More Scraping)

When the +1 button & Google+ launched, Google highlighted how they would use the + button usage as a "relevancy" signal. Google recently started inserting + pages directly into the search results for brands & right from the very start they were using it as a scraper website that would outrank the original content source.

Google used the buy in from their promised relevancy signal to create a badge-based incentivized system which acts as a glorified PageRank funnel to further juice the rankings of these new pages on a domain name that already had a PageRank 10.

I recently read a blog post about how anyone could do the above & the opportunity is open to everyone. But the truth is, I can't state that something will become a relevancy signal that manipulates the search results in order to get buy in. Or, if I did something which actually had the same net effect, Google would likely chop my legs off for promoting a link scheme.

Recently the topic of Google+ as a scraper site came up yet again via Read Write Web & on Hacker News a Googler stated that it was "childish" to place any of the blame on Google!!!!!!

Google determines how much information is shown near each listing & can create "relevancy" signals in ways that things tied to Google get over-represented (look at the +1 count here). When they do that & it destroys other business models *of course* Google deserves 100% of the blame.

It may be more profitable for Google to squeeze out some of the players, but if Google's quest for free content manages to destroy business models & the ecosystem as a whole, then they are not "doing what is best for the user."

Things We Do Not Approve...

Google can bundle themselves into markets, but when others do the same it is a big no no:

A Google spokesman said "applications that are installed without clear disclosure, that are hard to remove and that modify users' experiences in unexpected ways are bad for users and the Web as a whole."

Google's founding research highlighted how bad ad-driven search engines were & then Google's core revenue engine of paid search was built on their violation of Overture's patent. They keep buying swaths of patents to protect against their other violations.

The business model of "violate & then buy protection" has helped lead to a protection-racket styled marketplace in patents that makes the risk of innovation for smaller players so expensive that it drives them under.

Where Google has gained a dominant position in a marketplace they can begin misdirecting for profit. Let's say you link to your own location on Google Maps to drive traffic to Google & help your users locate your office. Well in some cases they then reciprocate by confusing users by putting an ad in your location bubble.

Once again, you are forced to buy your own brand unless you teach your customers (and prospective customers) to avoid Google products.

Sure I May Have Failed, But at Least That Failure Was Transparent...

If you are fully transparent against an arbitrary set of guidelines when the company that judges you also competes against you & brushes up against the limits of the DOJ & FTC then you might lose for no reason other than being transparent. And not only are you competing directly against Google, but the algorithms are biased toward certain players.

Creating a Two-tier Web

In 2006 Google's Eric Schmidt admonished others for attempting to create a 2-tier web:

Today the Internet is an information highway where anybody — no matter how large or small, how traditional or unconventional — has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can’t pay.

But when Google launched their Panda algorithm they did the same thing.

Their "quality content" thesis could have come across as being honest if they weren't still pre-paying Demand Media to upload "content" to YouTube.

You might get smoked by a Panda update or have your accounts arbitrarily frozen while operating at a 7 out of 10 level, and then you see Ask is Google's biggest advertiser, their arbitrage gets a pass, & that feed even monetizes misspelled searches for Google's brand. ;)

Risks

Risk is needed for adaptation, so some amount of risk is good, but...

If the old established corporate competition needs to be as good as you to compete then there is little risk to being transparent if the competition is doing nothing beyond following you around. But if the playing field is tilted and the competition only needs to be 5% as good as you are to beat you (and can easily come from behind to copy any success you have) then full on transparency brings much more risk than potential profits.

You Are the Ad

We are moving into a media world where the content becomes ads & even how people interact with the ads and content becomes a part of the ad.

Further Google uses their data advantage to create other asymmetrical advantages. While credit card companies sell personalized ads in network, Google is creating a marketplace to buy and sell user data.

Every time you view a page and click an ad (or even don't click an ad) you are feeding highly personal data back to Google. And they will use it as they wish. Here they are saying thousands of people like eBay, which is of course plenty reasonable, except for the fact they claim the people voted for that specific page rather than the site as a whole.

What's worse is that sometimes they will put your picture next to a listing and claim that YOU PERSONALLY voted for a specific page & use that to market that item to your friends and contacts. The problem with this is that:

  • even after you remove the vote for a site they still keep showing it
  • you may vote for site A & they will show your image as voting for site B
  • when they show your picture they claim you voted specifically for the page being advertised (even if that page is promoting a scam or something else you wouldn't endorse)

Once again, I will highlight that they use the votes against the wrong sites & pages and that they keep showing the votes even weeks after you remove them.

Where is the transparency in that deceptive crap?

Others Are Just as Bad, But Are Not Monopolies

But Aaron, you are just being hard on Google, why don't you ever mention Ask or Yahoo! or Bing?

I did mention Ask above. ;)

Bing has done numerous self-serving things, including some that are flat out sketchy.

Yahoo! offers a useless "buying guide" for fish tanks that is nothing more than a paid pointer to Overstock.com.

If you click on their coupons tab on that fish tanks search Yahoo! shows you coupons for tank tops, which is pretty idiotic.

Why is this Yahoo! Shopping & Yahoo! Deals product so ugly? They outsourced it years ago. So it is a non-product & thus the integration can't be anything but crappy.

Why do Yahoo! & Bing typically get a pass? They own a fairly low search marketshare. Missing traffic from either or both of those is certainly significant enough to be felt, however even when they are combined it is still less than half of what Google controls in most markets. Market leaders are expected to operate in less conflicted & less self-serving ways than also ran players in their market do. If Microsoft would have had 10% or 15% marketshare for their operating system then it is unlikely their browser bundling would have come under such scrutiny.

Transparency in The Real World

In the past I highlighted how every form of media is manipulated in Why Outing is Bad, but I thought it would be fun to run through some other markets and highlight how transparency often exists only as an illusion (to lure in punters so they can be rooked).

TrueCar aimed to make that market more transparent by giving consumers pricing data online to remove some of the asymmetrical advantage dealers have & makes the sales process smoother for consumers. How does the automotive market respond? Honda issued threats to their dealers & now TrueCar has a hate video ranking for their brand.

This nontransparency is not something new, but rather the way it has always been.

It exists at every level of society. Countries spy on one another & companies may chose to show different views of the world to different markets.

And what they do internally doesn't match the story they share publicly. Look no further than the News of the World's hacking scandal:

News International’s leading profit centre, the News of the World, was dependent on a very ugly culture of lawbreaking, hacking and impunity. This freewheeling, ask-no-questions attitude spread to other parts of the organisation, such as the Times and the Sunday Times, both of which used have used illegal or unethical techniques. Even more troubling, when senior News International management were confronted with evidence of wrongdoing, the company made false statements and took actions which prevented key evidence from reaching the public domain.

The same company has not only been accused of hacking at some of its other news outlets (by its own employees no less) but was also accused of similar in other lines of business:

Both cases involve News America Marketing, an obscure but lucrative division of the News Corporation that is a big player in the business of retail marketing, including newspaper coupon inserts and in-store promotions. The company has come under scrutiny for a pattern of conduct that includes below-cost pricing, paying customers not to do business with competitors and accusations of computer hacking.

Were The Robber Barons Transparent?

Going back into history it is sort of hard to pick a starting point (one can go to the spice trade & orders that are unsealed at sea, or likely earlier than that) but to pick a somewhat recent starting point, we could look at the railroads:

So how did unnecessary, inefficient railroads get built? Because of government subsidies. In short, the federal government paid to build the railroads through massive financing subsidies and also gave them ample land grants. The trick to building a railroad was not knowing anything about railroads or even about business; it was having friends in Washington who could give you the right financing and land subsidies.

Even then, the railroads lost money. Not only was there insufficient demand for their services, but they were run by people who were generally incompetent. (For one thing, they didn’t even know their own costs of doing business.) Yet the people who owned the railroads made fabulous amounts of money (of which Stanford University is one symbol). The main way to do this was simple. The people who controlled a railroad (generally by putting up very little of their own money, thanks to the government subsidies) would also wholly own a construction company. They would cause the railroad to overpay the construction company to build the railroad—in effect transferring wealth from railroad stockholders and creditors into their own pockets

What did the Robber Barons invest in? In large part government, media & educational institutions so that they could help "educate" society on how to behave much more civilly than they have.

Corporate Advocacy

There are tons of marketing campaigns designed to "educate" society about the impacts of various companies. BP now markets the gulf coast economy they plundered.

AT&T's astroturfing campaign to acquire T-Mobile was so over the top that it actually backfired.

"Get the facts" styled campaigns are rarely about promoting a complete worldview.

Remember the $500 million fine for Google from them pushing ads selling overseas Viagra in the US? Now they promote scaremongering ads against fakes from filthy labs.

Coca-cola runs The Beverage Institute & has "doctors" highlight how healthy soda is.

At the same time, when Pepsi was sued over an alleged rat being in a can of Mountain Dew. Pepsi's defense claimed: "the mouse would have dissolved in the soda had it been in the can from the time of its bottling until the day the plaintiff drank it" turning the mouse into a 'jelly-like' substance. But don't worry folks, it's healthy. :D

At least we still have water.

When they are not busy making it illegal to collect rainwater, Bechtel wants you to follow them on Twitter.

It is hard to know what is in our food & those who label things as organic have to fill out more paperwork than those who manufacture frankenfood. Then there are the baseline chemicals sold as biodegradable which are not. ;)

Oh well, at least we have insurance.

State Farm is the #1 ranked bad faith insurance company, but at least they upload & advertise irrelevant funny videos to YouTube to create brand signal for Google.

Transparency in Everyday Life

Of course some of the worst affiliate offers, the most aggressive sales calls & other scams are designed to prey on ignorance of small print & rebilling, but even generally good businesses practice in asymmetrical skimming.

A few recent examples:

Is Our Financial System Transparent?

When one looks at the field of finance it is story after story of deception, nontransparency & lawlessness. It is a constant reminder that there is no such thing as business ethics.

  • Wachovia laundered $378.4 billion in drug money for violent drug cartels. As if that wasn't bad enough, we also sold them weapons that wound up at murder scenes with our own border patrol dead & the Koch brothers sold weapons to states that we brand as "rogue."
  • Bank of New York Mellon ripped off their clients with unsavory Forex rates: "As investigators sought to determine whether the bank overcharged clients to execute their currency trades, a senior BNY Mellon executive nicknamed "Rambo" urged traders not to tell clients how much money they made on trading, according to the informant."
  • A former Federal Reserve member writes about the Fed: "No matter the legalistic interpretation, the Fed is, working through the ECB, bailing out European banks and, indirectly, spendthrift European governments. It is difficult to count the number of things wrong with this arrangement."
  • Bank of America recently had to pay $335 million to settle a discrimination lawsuit against minorities, due to Countrywide (who is NOT on your side) charging juiced interest rates. Bank of America had to pay an $8.5 billion settlement to investors who bought some of the junk mortgages out the other end.
  • "What’s happened is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording. There was no court case behind this, no statute from Congress or the state legislatures. It was accomplished in a private corporate decision. The banks just did it." - Christopher Peterson
  • The financial markets are becoming glorified crack houses: "Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums. What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth. By preventing the natural discipline of the markets to impose losses on poor stewards of capital, and to impose interest rates high enough to force debtors to allocate the capital usefully, the world's policy makers are increasingly wrecking the prospects for long-term economic growth."
  • Companies are often brought private, leveraged up on debt & have their pension programs destroyed to make "profits" for private equity investors: "Nowadays private-equity firms often spend hundreds of millions of their own money on an acquisition (BW -- Feb. 27). Just as often, though, they load up the companies with debt and use the money to pay themselves special dividends and other fees that allow them to profit even if the company itself struggles. Then the backers take the company public, often pocketing the lion's share of the offering."
  • Individuals who put in extra hours of work because they are sold on the promise of their options may also find those disappear: "Taking away the value of options that are vested means that the concept of vesting becomes bogus. It doesn't matter whether the employee understood if this was the deal or not, it's a scummy practice, and it's ultimately self-defeating (both for the company and the industry as a whole). Who would go to work for Skype (or any PE-backed company) in the future? "
  • Limitless fraud before the courts & dancing on the graves of the newly homeless: "Court records show that the firm angered state court judges for alleged false statements and filing suspect documents. Arthur Schack, a state court judge in Brooklyn, in a 2010 ruling said that pleadings by the Baum firm on behalf of HSBC Bank, a unit of London-based HSBC Holdings, in a foreclosure case were "so incredible, outrageous, ludicrous and disingenuous that they should have been authorized by the late Rod Serling, creator of the famous science-fiction television series, The Twilight Zone."
    ...
    The law firm said it would shut down after New York Times columnist Joe Nocera in November published photographs of a 2010 Baum firm Halloween party in which employees dressed up as homeless people. Another showed part of Baum's office decorated to look like a row of foreclosed houses."
  • That theft of physical property is ongoing: "Also announced over the weekend was the jaw-dropping, yet illuminating fact that the MF Global bankruptcy was fraudulently, nefariously and illegally drawn up as a Chapter 7 BK for a SECURITIES DEALER and NOT a commodity brokerage as it should have been. Look, MF Global was the second-largest non-bank FCM in the United States next to NewEdge which is the old FIMAT. If MF Global wasn’t an FCM, then there are no FCMs. Of course it was an FCM. It had $7.2 billion in customer seg funds as of August 31, 2011. And yet MF Global was immediately, from the get-go, put into Chapter 7 BK as a SECURITIES FIRM. This is fraud. MF Global’s BK should have OBVIOUSLY been established under Subchapter IV of the Chapter 7 code as a COMMODITY BROKERAGE."
  • And as banking criminals literally steal money, destroy lives & undermine the rule of law to grow their "profits" sleazeballs like Jamie Dimon think that the reason people hate them is envy.

The above makes no mention of helping Greece hide governmental debt, bid-rigging bribes in Jefferson County, robosigning bogus foreclosure documents, and a host of other crimes. But one thing in common with all the above crimes is this: no jailtime for the banksters.

Since there is nothing stopping those criminals they keep up their crimes:

Big banks represent the ultimate in concentrated economic power in today’s economies. They are able to resist all meaningful reform that could really change their compensation schemes. Their executives want to get all the upside while facing none of the true downside.

But capitalism without the prospect of failure is not any kind of market economy. We are running a large-scale, nontransparent, and dangerous government subsidy scheme for the benefit primarily of a very few, extremely wealthy people.

The actions of the financial cartel are both obvious & predictable. And the damage they do is felt worldwide:

Credit-financed economic booms, by turns in private then public credit as one ratchets up the other over a series of booms and busts, are as irresistible to politicians as hookers and maids.
...
The failures of American FIRE Economy policies are behind the movements in Libya, Yemen, and Syria, as reflation measures, from quantitative easing to currency depreciation, steal purchasing power from low income families world wide, acting as the most regressive tax imaginable. Simmering hatreds are exacerbated by the developing global crisis over oil supplies and costs.
...
The so-called debate about debt ceilings, spending cuts, and entitlements reductions is a red herring. The public debt crisis arose from the 2007 - 2008 private credit market crisis, not the government liabilities that have been building for decades. The mistake of both the left and the right is thinking that we can escape an output gap without facing up to the politically unpopular task of demanding that creditors take a loss on loans taken out during the credit bubble era.

A creditor that makes bad loans deserves to go out of business. Their outsized compensation can't be justified unless they are also made to eat their losses. But rather than holding them accountable for their own actions, societies the world over absorb that pain.

"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power"- Benito Mussolini

Slavery, Debt & Freedom

There are currently more slaves alive than at any point in history. And many people who are not slaves are still being enslaved by crushing debt:

Money is a human construct. The fact that our money is now backed by nothing more than our collective future ability to "produce" relegates us to that of slaves.

Money=paper=blood hours.

Blood hours are a finite measure. Heartbeats.

What's in your wallet? Is it the new debt slavery card: "A personal bankruptcy is supposed to cut borrowers loose from lenders and debt collectors, but Capital One Financial Corp.—one of the nation's largest credit-card issuers—sometimes doesn't want to let go."

Citigroup has an "effective" strategy they employ in some 3rd world countries to deal with those who can't pay:

After dropping his younger daughter at school, Octa walked into Citibank’s credit card collection department on the fifth floor of the Jamsostek tower just after 10 a.m. Four hours later, he left the 25-story building slumped motionless in a wheelchair -- a victim of what police allege was a violent assault by debt collectors. Driven to a nearby hospital in a Citibank car, Octa was pronounced dead on arrival.

Unfortunately, even if you stay out of debt, you are forced to support banking scams:

before being bailed out by governments, banks had never made any return in their history, assuming that their assets are properly marked to market. Nor should they produce any return in the long run, as their business model remains identical to what it was before, with only cosmetic modifications concerning trading risks.

So the facts are clear. But, as individual taxpayers, we are helpless, because we do not control outcomes, owing to the concerted efforts of lobbyists, or, worse, economic policymakers. Our subsidizing of bank managers and executives is completely involuntary.

In the US the reason the government debt outlook is so bad is in part due to overpaying for "assets" owned by the likes of Citibank:

The way the banks make money now is by hiding their losers off balance-sheet, or by forcing them on the taxpayers, and after having themselves declared "systemically important," adjusting their on balance-sheet exposures accordingly, crashing the system and cashing out on their leveraged derivative bets, also at the taxpayers' expense.

In real life, if there is such a thing anymore, all of the major banks are arguably insolvent. So, in reality, they're not making any money at all, they are merely having it transferred to them by their political operatives in Congress and the Federal Reserve Bank. This, after all, is the modern purpose of the Congress, and has always been the purpose of the Federal Reserve System.

Even as they destroy savings, kill jobs & undermine the competitiveness of the economy, why does the government continue to support such scams? Without the scams & cost-shifting those in government wouldn't have as much wealth, power & influence. It is debt & cost-shifting that fuels them:

government and banks are stuck together like a couple of dogs screwing and we don't know which is on top. Here, Republicans need government to finance war and Democrats need it to finance social programs. Both need it to finance both, as that is how government attempts to maintain power and influence over the people this day and time.

The congress literally sells insider tips to hedge funds:

When Senate Democrats finally brokered a compromise over the proposed health-care law, a group of hedge funds were let in on the deal, learning details hours before a public announcement on Dec. 8, 2009.

The news was potentially worth millions of dollars to the investors, though none would publicly divulge how they used the information. They belong to a select group who pay for early, firsthand reports on Capitol Hill.

Since most money comes into circulation as debt (and due to the compounding nature of debt interest), if those at the top are not allowed to fail then those at the bottom will fall hard:

In the past, periods dominated by virtual credit money have also been periods where there have been social protections for debtors. Once you recognize that money is just a social construct, a credit, an IOU, then first of all what is to stop people from generating it endlessly? And how do you prevent the poor from falling into debt traps and becoming effectively enslaved to the rich? That’s why you had Mesopotamian clean slates, Biblical Jubilees, Medieval laws against usury in both Christianity and Islam and so on and so forth.

Since antiquity the worst-case scenario that everyone felt would lead to total social breakdown was a major debt crisis; ordinary people would become so indebted to the top one or two percent of the population that they would start selling family members into slavery, or eventually, even themselves.

Well, what happened this time around? Instead of creating some sort of overarching institution to protect debtors, they create these grandiose, world-scale institutions like the IMF or S&P to protect creditors. They essentially declare (in defiance of all traditional economic logic) that no debtor should ever be allowed to default. Needless to say the result is catastrophic. We are experiencing something that to me, at least, looks exactly like what the ancients were most afraid of: a population of debtors skating at the edge of disaster.

And, I might add, if Aristotle were around today, I very much doubt he would think that the distinction between renting yourself or members of your family out to work and selling yourself or members of your family to work was more than a legal nicety. He’d probably conclude that most Americans were, for all intents and purposes, slaves.
...
Clearly any pretence that markets maintain themselves, that debts always have to be honored, went by the boards in 2008. That’s one of the reasons I think you see the beginnings of a reaction in a remarkably similar form to what we saw during the heyday of the ‘Third World debt crisis’ – what got called, rather weirdly, the ‘anti-globalization movement’. This movement called for genuine democracy and actually tried to practice forms of direct, horizontal democracy. In the face of this there was the insidious alliance between financial elites and global bureaucrats (whether the IMF, World Bank, WTO, now EU, or what-have-you).


Those who have the least often give the most. Excessive income inequality (especially when driven by fraud) leads to a moral and cultural rot. Financial cartels & governments can only enslave people in so much debt & hand out so much soma before they either revolt or simply lose faith.

(On a related note, December saw record gun sales.)

State actors have repeatedly use violence to try to encourage a similar response. Instead they created a viral meme & the movement lives on.

Of course there are "opposition research" hacks willing to dig up dirt on anyone with wide reach who opposes the state-sponsored fraud: "It will be vital,” the memo says, “to understand who is funding it and what their backgrounds and motives are. If we can show that they have the same cynical motivation as a political opponent it will undermine their credibility in a profound way.”

The state has long manipulated mainstream media and has tools for spying on social networks, hacking accounts & astroturfing online, but sock puppets can only go so far against reality.

Who Does 100% Marketing Transparency Help & Who Does it Hurt?

We have an SEC that shreds over a decade of evidence (and engages in other illegal behaviors), a government that bails out the criminal enterprises & a court system that broadly makes it nearly impossible to win a financial fraud lawsuit.

The biggest companies & the biggest people in business at this point are simply above the rule of law & are not held accountable for their actions. Worse yet, the corrupt system has global influence.

  • In 2004 the FBI warned that there was an "epidemic" of mortgage fraud and that it would create a crisis.
  • "My administration is the only thing between you and the pitchforks," the president told them.
  • And, in spite of the FBI highlighting the massive mortgage fraud, and the above quote, the president (who is a horrible human being) aims to keep the population misinformed & ignorant, publicly stating that what Wall St did wasn't illegal!

Henry Kissinger has a famous quote about power: "Before the Freedom of Information Act, I used to say at meetings, ‘The illegal we do immediately; the unconstitutional takes a little longer.’ [laughter] But since the Freedom of Information Act, I’m afraid to say things like that." Since then government officials have become much more evasive & smooth talking. Unfortunately, freedom of the press only goes so far:

this is how the much-lauded "freedom of the press" myth in the US actually works. If you perform the job of an actual journalist, telling truth to power, forget about attending press conferences at the White House, Pentagon or State Department. You won't even be admitted in the building.

When you ask for total market transparency it changes nothing with the criminality at the top, but it does create a juicy data source for criminals while harming personal civil liberties & unpeople with limited power:

The people who most heavily rely on pseudonyms in online spaces are those who are most marginalized by systems of power. “Real names” policies aren’t empowering; they’re an authoritarian assertion of power over vulnerable people.

Google Affiliate Marketing Infographic

Jan 4th
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Google Hates Affiliates.

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This Post is Sponsored by Google

Jan 2nd

That is what they say, typically at the bottom of the posts, in blog posts that equate Google Chrome to being the Internet & spread misinformation about how Chrome is good for small business.

  • some of those sites are paid posts and have live links in them to Google Chrome without using nofollow & talk about SEO in the same post as well!
  • some of those posts link to the example businesses Google was paying to have covered
  • and all the posts are effectively "buying YouTube video views" for this video youtube.com/watch?v=QFLP7HD1s7k

You can say they didn't require the links, that the links were incidental, that leaving nofollow off was an accident, etc. ... but does Google presume the same level of innocence when torching webmasters? They certainly did not to the bloggers who reviewed K-Mart & the Google reconsideration request form states:

“In general, sites that directly profit from traffic (e.g. search engine optimizers, affiliate programs, etc.) may need to provide more evidence of good faith before a site will be reconsidered.”

The Orwellian things about Google using the above strategy to market Chrome are:

  • Google has a clear pro-corporate big brand bias to their algorithms & layout (Vince & Panda updates + the part near the top of the SERPs for some searches that says "brands" as a filter type).
  • The more usage data Google collects the more stupid hoops it forces smaller businesses to jump through in order to compete, thereby further driving them under. (If small business owners didn't have enough time & resources for SEO, do they now also have time to get reviews, get local citations, deal with social stuff on Twitter + Facebook + Youtube + Google+ and a bit of SEO?)
  • Google polices how small businesses can even make income online. When K-Mart paid some small business bloggers to do sponsored posts Matt Cutts wrote a post (mattcutts.com/blog/sponsored-conversations/) about how he torched those small bloggers (while doing nothing to K-Mart) & equated that exercise to selling links that promote bogus brain cancer solutions. Yet Google Japan was already dinged for this sort of paid post activity & now Google is doing the same thing again.

The fact that Google is paying to spread that sort of misinformation about how their browser is helping small businesses is sort of like BP buying ads about doing tourism in the gulf. Only since Google destroying smaller businesses is something more abstract on virtual lands the PR propaganda campaign is much more effective, because (unlike oil washing ashore) people do not see what is not there. (The birds still die, but the black oil covered carcass isn't rotting on the beach).

Should you follow Google & buy ads on these sites? Are they christened & beyond reproach? I would sort of be afraid to buy exposure on the blogs where Google is buying coverage...if that latent public relations disaster eventually blows up in their face, they may assume others are as guilty as Google is & burn down the whole forest.

Google the dictator meet Google the marketer. You guys are going to get on well together!

Update: Danny highlighted how Google's Chrome ad buy created a lot of the low-quality filler pablum content that the Panda update was alleged to discourage.

SEO Lemons

Dec 28th

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SEO Market for Lemons.

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Thanks to John Andrews for highlighting the above industry trend.

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