If you have been in the SEO field for any serious length of time you have probably come across (and benefited from) some of Tedster's work - either directly, or indirectly from others who have repackaged his contributions as their own. He is perhaps a bit modest, but there are few people in the industry as universally well respected as he is. I have been meaning to interview him for a while now, and he is going to be speaking at Pubcon South on April 14th in Dallas, so I figured now was as good a time as any :)

How long have you been an SEO, and how did you get into the field?

I started building websites in 1995 and the word SEO hadn't been invented. I came from a background in retail marketing, rather than technology or graphic design. So my orientation wasn't just "have I have built a good site?", but also "are enough people finding my site?"

The best method for bringing in traffic seemed to be the search engines, so I began discussing this kind of marketing with other people I found who had the same focus. Ah, the good old days, right? We were so basic and innocently focused, you know?

If you could list a few key documents that helped you develop your understanding of search, which would be the most important ones?

Here are a few documents that acted as major watersheds for me:

• 1989: Scott Deerwester - Latent Semantic Analysis (Patent)
• 1997: Jon Kleinberg - HITS Algorithm (PDF)
• 1998: Page & Brin - PageRank (Patent)
• 2003: Microsoft - VIPS: A Vision-based Page Segmentation Algorithm (PDF)
• 2004: Yahoo - Combating Web Spam with TrustRank (PDF)
• 2005: Google - Information retrieval based on historical data (Patent)
• 2006: Google - Phrase-Based Indexing (Patent)
• 2008: Google - Interleaving Search Results (Patent)

Is PageRank still crucial? Or have other things replaced it in terms of importance?

What PageRank is measuring (or attempting to measure) is still very critical — both the quality and number of other web pages that link to the given page. We don't need to worship those public PR numbers, but we definitely do need quality back-links (and quality internal linking) to rank well on competitive queries.

There appears to be something parallel to PR that is emerging from social media — some metric that uses the model of influencers or thought leaders. But even with that in the mix, ranking would still depend on links, but they would be modified a bit by "followers", "friends", since many social sites are cautious with do-follow links.

Lets play: I have got a penalty - SEO edition. Position 6, -30, 999, etc. Are these just bogus excuses from poor SEOs who have no job calling themselves SEOs, or are they legitimate filters & penalties?

If the page never ranked well, then yes - it could well be a bogus excuse by someone whose only claim to being an SEO is that they read an e-book and bought some rank tracking software. However, Google definitely has used very obvious numeric demotions for pages that used to rank at the top.

The original -30 penalty is an example that nailed even domain name "navigational" searches. It affected some sites that did very aggressive link and 301 redirect manipulation.

What was originally called the -950 (end of results) penalty, while never an exact number, most definitely sent some very well ranked pages down into the very deep pages. Those websites were often optimized by very solid SEO people, but then Google came along and decided that the methods were no longer OK.

In recent months, those exact number penalties seem to have slipped away, replaced something a bit more "floating" and less transparent. My guess is that a negative percentage is applied to the final run re-ranking, rather than subtracting a fixed number. Google's patent for Phrase-based Indexing does mention both possible approaches.

But even using percentages rather than a fixed number, when a top-ranked page runs afoul of some spam prevention filter, it can still tank pretty far. We just can't read the exact problem from the exact number of positions lost anymore.

Do you see Google as having many false positives when they whack websites?

Yes, unfortunately I do. From what I see, Google tends to build an algorithm or heuristic that gathers up all the URLs that seem to follow their "spam pattern du jour" — and then they all get whacked in one big sweep. Then the reconsideration requests and the forum or blog complaints start flying and soon Google changes some factor in that filter. Viola! Some of the dolphins get released from the tuna net.

One very public case was discussed on Google Groups, where an innocent page lost its ranking because a "too much white space" filter that misread the effect of an iframe!

Google's John Mueller fixed the issue manually by placing a flag on that one site to trigger a human inspection if it ever got whacked in the future. I'd assume that the particular filter was tweaked soon after, although there was no official word.

How many false positives does it take to add up to "many"? I'd guess that collateral damage is a single digit percentage at most — probably well under 5% of all filtered pages, and possibly less than 1%. It still hurts in a big way when it hits YOUR meticulously clean website. And even a penalty that incorrectly nails one site out of 300 can still affect quite a lot over the entire web.

How often when rankings tank do you think it is do to an algorithmic issue versus how often it is via an editorial issue with search employees?

When there are lots of similar complaints at the same time, then it's often a change in some algorithm factor. But if it's just one site, and that site hasn't done something radically new and different in recent times, then it's more likely the ranking change came from a human editorial review.

Human editors are continually doing quality review on the high volume, big money search results. It can easily happen that something gets noticed that wasn't seen before and that slipped through the machine part of the algorithm for a long time.

That said, it is scary how often sites DO make drastic errors and don't realize it. You see things like:

• nofollow robots meta tags getting imported from the development server
• robots.txt and .htaccess configurations gone way wrong
• hacked servers that are hosting cloaked parasite content

Google did a big favor for honest webmasters with their "Fetch as googlebot" tool. Sometimes it's the easiest way to catch what those hacker criminals are doing.

When does it make sense for an SEO to decide to grovel to Google for forgiveness, and when should they try to fix it themselves and wait out an algorithmic response?

If you know what you've been doing that tripped the penalty, fix it and submit the Reconsideration Request. If you don't know, then work on it — and if you can't find a danged thing wrong, try the Google Webmaster Forums first, then a Request. When income depends on it, I say "grovel".

I don't really consider it groveling, in fact. The Reconsideration Request is one way Google acknowledges that their ranking system can do bad things to good websites.

I've never seen a case where a request created a problem for the website involved. It may not do any good, but I've never seen it do harm. I even know of a case where the first response was essentially "your site will never rank again" — but later on, it still did. There's always hope, unless your sites are really worthless spam.

Many SEOs theorize that sometimes Google has a bit of a 2-tier justice system where bigger sites get away with murder and smaller sites get the oppressive thumb. Do you agree with that? If no, please explain why you think it is an inaccurate view. If yes, do you see it as something Google will eventually address?

I'd say there is something like that going on — it comes mostly because Google's primary focus is on the end user experience. Even-handed fairness to all websites is on the table, but it's a secondary concern.

The end user often expects to see such and such an authority in the results, especially when it's been there in the past. So Google itself looks broken to a lot of people if that site gets penalized. They are between a rock and a hard place now.

What may happen goes something like this: an A-list website gets penalized, but they can repair their spam tactics and get released from their penalty a lot faster than some less prominent website would. It does seem that some penalties get released only on a certain time frame, but you don't see those time frames applied to an A-list.

This may even be an effect of some algorithm factor. If you watch the flow of data between the various Google IP addresses, you may see this: There are times when the domain roots from certain high value websites go missing and then come back. Several data center watchers I know feel that this is evidence for some kind of white-list.

If there is a white-list, then it requires a history of trust plus a strong business presence to get included. So it might make also sense that forgiveness can come quickly.

As a practical matter, for major sites there can easily be no one person who knows everything that is going on in all the business units who touch the website.

Someone down the org chart may hire an "SEO company" that pulls some funny business and Google may seem to turn a blind eye to it, because the site is so strong and so important to Google's end user. They may also just ignore those spam signals rather than penalize them.

Large authority site content mills are all the rage in early 2010. Will they still be an effective business model in 2013?

It's tough to see how this could be quickly and effectively reined in, at least not by algorithm. I assume that this kind of empty filler content is not very useful for visitors — it certainly isn't for me. So I also assume it must be on Google's radar.

I'd say there's a certain parallel to the paid links war, and Google's first skirmishes in that arena gave then a few black eyes. So I expect any address to the cheap content mills to be taken slowly, and mostly by human editorial review.

The problem here is that every provider of freelance content is NOT providing junk - though some are. As far as I know, there is no current semantic processing that can sort out the two.

Given that free forums have a fairly low barrier to entry there are perhaps false alarms every day on ringing in the next major update or some such. How do you know when change is the real deal? Do you passively track a lot of data? And what makes you so good at taking a sea of tidbits and sort of mesh them into a working theme?

I do watch a lot of data, although not nearly to the degree that I used to. Trying to reverse engineer the rankings is not as fruitful as it used to be —especially now that certain positions below the top three seem to be "audition spots" rather than actually earned rankings.

It helps to have a lot of private communications — both with other trusted SEOs and also with people who post on the forums. When I combine that kind of input with my study of the patents and other Google communications, usually patterns start to stand out.

When you say "audition spots" how does that differ from "actually earned rankings"? Should webmasters worry if their rankings bounce around a bit? How long does it typically take to stabilize? Are there any early signs of an audition going good or bad? Should webmasters try to adjust mid-stream, and if so, what precautions should they take?

At least in some verticals, Google seems to be using the bottom of page 1 to give promising pages a "trial" to see how they perform. The criteria for passing these trials or "auditions" are not very clear, but something about the page looks good to Google, and so they give it a shot.

So if a page suddenly pops to a first page ranking from somewhere deep, that's certainly a good sign. But it doesn't mean that the new ranking is stable. If a page has recently jumped way up, it may also go back down. I wouldn't suggest doing anything drastic in such situations, and I wouldn't overestimate that new ranking, either. It may only be shown to certain users and not others. As always, solid new backlinks can help - especially if they are coming from an area of the web that was previously not heard from in the backlink profile. But I wouldn't play around with on-page or on-site factors at a time like that.

There's also a situation where a page seems to have earned a lot of recent backlinks but there's something about those links that smells a bit unnatural. In cases like that, I've seen the page get a page one position for just certain hours out of the day. But again, it's the total backlink profile and its diversity that I think is in play. If you've done some recent "link building" but it's all one type, or the anchor text is too obviously manipulated, then look around for some other kinds of places to attract some diversity in future backlinks.

On large & open forums lots of people tend to have vastly different experience sets, knowledge sets, and even perhaps motives. How important is your background knowledge of individuals in determining how to add their input into your working theme? Who are some of the people you trust the most in the search space?

I try never to be prejudiced by someone's recent entry into the field. Sometimes a very new person makes a key observation, even if they can't interpret it correctly.

There is a kind of "soft SEO" knowledge that is rampant today and it isn't going to go away. It's a mythology mill and it's important not to base a business decision on SEO mythology. So, I trust hands on people more than manager types and front people for businesses. If you don't walk the walk, then for me your talk is highly suspect.

I pay attention to how people use technical vocabulary — do they say URL when they mean domain name? Do they say tag when they mean element or attribute? Not that we don't all use verbal shortcuts, but when a pattern of technical precision becomes clear, then I listen more closely.

I have long trusted people who do not have prominent "names" as well as some who do. But I also trust people more within their area of focus, and not necessarily when they offer opinions in some other area.

I hate to make a list, because I know someone is going to get left out accidentally. Let's just say "the usual suspects." But as an example, if Bruce Clay says he's tested something and discovered "X", you can be pretty sure that he's not blowing sunshine.

Someone who doesn't have huge name recognition, but who I appreciate very much is Dave Harry (thegypsy). That's partly because he pays attention to Phrase-based Indexing and other information retrieval topics that I also watch. I used to feel like a lone explorer in those areas before I discovered Dave's contributions.

What is the biggest thing about Google where you later found out you were a bit off, but were pretty certain you were right?

That's easy! Using the rel="nofollow" attribute for PR sculpting. Google made that method ineffective long before I stopped advocating it. I think I actually blushed when I read the comment from Matt Cutts that the change had been in place for over a year.

What is the biggest thing about Google where you were right on it, but people didn't believe until months or years later?

The reality of the poorly named "minus 950" penalty. I didn't name it, by the way. It just sort of evolved from the greater community, even though I kept trying for "EOR" or "End Of Results.

At PubCon South I believe you are speaking on information architecture. How important is site structure to an effective SEO strategy? Do you see it gaining or losing importance going forward?

It is hugely important - both for search engines and for human visitors.

Information Architecture (IA) has also been one the least well understood areas in website development. IA actually begins BEFORE the technical site structure is set up. Once you know the marketing purpose of the site, precisely and in granular detail, then IA is next.

IA involves taking all the planned content and putting it into buckets. There are many different ways to bucket any pile of content. Some approaches are built on rather personal idiosyncrasies, and other types can be more universally approachable. Even if you are planning a very elaborate, user tagged "faceted navigation" system, you still need to decide on a default set of content buckets.

That initial bucketing process then flows into deciding the main menu structure. Nest you choose the menu labels, and this is the stage where you fix the actual menu labels and fold in keyword research. But if a site is built on inflexible keyword targets from the start, then it can often be a confusing mess for a visitor to navigate.

As traffic data grows in importance for search ranking, I do see Information Architecture finally coming into its own. However, the value for the human visitor has always clearly visible on the bottom line.

What are some of the biggest issues & errors you see people make when setting up their IA?

There are two big pitfalls I run into all the time:

• Throwing too many choices at the visitor. Macy's doesn’t put everything they sell in their display windows, and neither should a website.
• Using the internal organization of the business as the way to organize the website. That includes merely exporting a catalog to a web interface.

How would you compare PubCon South against other conferences you have attended in the past?

PubCon South is a more intimate venue than, say Vegas. That means less distraction and more in-depth networking. Even though people do attend from all over the world, there is a strong regional attendance that also gives the conference a different flavor — one that I find a very healthy change of pace.

In addition, PubCon has introduced a new format — the Spotlight Session. One entire track is made completely of Spotlight Sessions with just one or two presenters, rather than an entire panel. These are much more interactive and allow us to really stretch out on key topics.

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Thanks Tedster! If you want to see Tedster speak he will be at Pubcon Dallas on the 14th, and if you want to learn about working with him please check out Converseon. You can also read his latest musings on search and SEO by looking into the Google forums on WebmasterWorld. A few months back Tedster also did an interview with Stuntdubl.

Who is going to pay to tell people that they are good enough and their lives are fine as they are? A fundamental truth of advertising is that advertising the truth usually isn't very profitable - which is why there is lead generation, affiliate programs, public relations, negative billing options, small print, bogus medical research, and so on... ;)

Ever wonder how an SEO professional can charge first world rates to do third rate, third world work and still get a top rating from a heavily advertised SEO rating website? Edward Lewis has the lowdown on Top SEOs, including TopSEOs complaints.

[edit: above links removed, as Edward sold his site at some point & then the person who bought it later sold it to TopSEOs, so the above links would have led to lead generation forms for some unsavory SEO folks.]

A big part of the problem with the affiliate business model is when people offer fake rankings / ratings and only promote whoever pays them the most. The person/company which can afford to pay the most for leads often can only afford to because there is hidden risk or hidden cost in the service, or because they don't deliver on their promises. An analogy here is those AAA rated mortgage backed securities where an S&P employee explained, "We rate every deal. It could be structured by cows and we would rate it."

The biggest brands don't pay as much per lead because they don't have to. They invest in brand and quality of customer service. The best service-based companies don't need to pay cut-rate ad prices to advertise. The best SEO companies have far more demand for their time than time to pay to hunt for customers.

I remember back in 2006 when one of the currently "top rated SEOs" did work for my wife's website (before she met me). That SEO firm did nothing but outsource overseas irrelevant reciprocal link exchanges and her website *would not rank* for any semi-competitive keywords until *after* the reciprocal links page was removed from her site. After we took down those reciprocal links and built some quality links the site started to rank. We changed the FTP details as well because that guy's services were not only not worth paying for...the reciprocal links were proved to be damaging, and we didn't want him to put them back up. And in spite of not doing any services for months (and certainly no services worth paying for), this person wanted to ensure they got paid for 12 months of "service." And they didn't want to let the contract end when it was supposed to either. They were all sales, all the time. It didn't matter that they were selling ineffective garbage.

What eventually stopped the credit card charges was when I wrote him via email "If her credit card is charged again we will be doing a reverse charge and a full writeup on the service."

He responded to that with the following:

I would watch your comments and threats my friend as you have no idea of what I am capable of or who I am - this is a small industry and if you are trying to be a an up an coming player in it this is not the way to do it by bashing your competition. A simple email professionally stating that you were unhappy with the service would have sufficed and I would have looked into to make sure Giovanna got what she paid for.

I have run 2 optimization companies and have been in this business for 12 years now. With my contacts at Google and the other main engines I can get your ebook website banned within 1-2 days if this is how you do business - with threats and slander - keep it up.

The funny thing is all I said was that if he tried charging again (past the contract) that we would reverse charges. And yet the sleazeball told me to "watch your comments and threats" and that he could use "contacts at Google and other main engines" to get my website banned.

What a jerk.

I have always had contempt for blowhards, and for pure hard-sales salesmen who put sales first and are willfully ignorant of their trade and/or who are willing to sell garbage product without any concern for the customer's welfare.

I am grateful that the above mentioned person sucked at what they did & ripped people off back then. If they were not out scamming people and actually provided a useful service then my wife wouldn't have had a reason to contact me and meet me and marry me. ;)

I let it go for over 3 years, but if they are still scamming people then that needs to stop. I figure its only right that I write this post as a fair warning. All good things must come to an end. And so should bad things. Hopefully these clowns quite scamming people. Enough is enough.

Update: 3 years later the fake ratings continue. BigMouthMedia was rated a top SEO agency by Top SEOs, even when it no longer existed as a distinct company after a merger years earlier. Top SEOs is so bogus with their ratings that they even put out a press release announcing the above rating of the above non-company!

Look at this rubbish. "Bigmouthmedia top SEO firm of September 2013" http://t.co/OwCfn5fh53 There's been no bigmouthmedia for years.— Andrew Girdwood (@AndrewGirdwood) September 9, 2013

Ask has removed referral data from many of their ads, leaving advertisers flying blind. Ask.com, which has long been known as one of the leading Google AdWords arbitrage plays, also syndicated their ad feed to the point where Google forced them to turn off syndication. From there Ask has look for new ways to arbitrage search. They have created an automated deals section...

Which has over a million pages indexed in Google!

And the Ask.com search results themselves are a bit rough. Some of them promote featured articles from other IAC parners

Many of them have Ask.com answers in them, which scrapes questions and answers from across the web and wraps them in ads.

And some of the search results have multiple lead generation boxes on them (without any disclosure).

A good chunk of them have Wikipedia listed, but wrapped in ads & hosted by Ask.

A few more vertical ad types and/or general purpose web services (to complement answers, news, local, lead generation, Wikipedia, FreeBases, PPC ads) and a search engine would have no need to send searchers anywhere but to advertisers and itself.

I have no doubt that Ask's search results monetize at a higher rate than Google's, but that aggressive monetization also costs them marketshare. It is a trade off every business faces: maximizing short term yield, while keeping the business healthy and growing in the market.

Given that Google has been testing lead generation AdWords ads, pushing maps hard (while testing ads in the maps results - along with beta tests in big money categories like hotels), paid inclusion in their product search, and product images in the organic search results ... it wouldn't be surprising to see Google clone whatever looks like it is working good for Ask.

But Google will have to move slower on many of these fronts, because if they move too quickly they won't be able to defuse the blowback and anti-trust concerns. Given their recent user privacy snafu, and the current brand ad push where they are now trying to promote the categories they once claimed to have hate, the last thing they want to do is give people more reasons to distrust them and give regulators more reasons to give them another look. So new features launch as a limited beta test / experiment to a subset of users (and in many cases free to advertisers) to slowly release their business plans in a way that does not create too much concern. Small steps bring limited regulatory interference, and by the time concerns are voiced they can say "we have done that for years."

But as the Microsoft (or Wal-Mart) of the web, I wonder if it is a good idea for Google to make blog posts with titles like Now it's easy to switch to Google Apps from Microsoft® Exchange. The broader they spread search, the more likely they are to find their words working against them at some point. They can't claim to be agnostic while self serving ads and writing how to guides on switching away from competitors.

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

Cynical? Or Realistic?

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

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

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

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

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

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

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

How Structural Accounting Fraud Produces "Wealth"

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

They Don't Make Presidents Like They Used To!

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

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

Non-transparency = Fraud

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

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

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

Moral Hazard in Context

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

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

Stolen vs Earned

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

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

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

How is This Relevant to the Web?

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

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

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

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

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

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

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

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

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

A few years ago Google's chief economist Hal Varian explained that scale is over-rated:

We're very skeptical about the scale argument, as you might expect. There's a lot of aspects to this subject that are not very well understood.
...
So in all of this stuff, the scale arguments are pretty bogus in our view because it's not the quantity or quality of the ingredients that make a difference, it's the recipes. We think we're where we are today because we've got better recipes and we have better recipes because we spent 10 years working on search improving the performance of the algorithm.

Wednesday Google's chief scientist Peter Norvig shared his view:

We don't have better algorithms than anyone else. We just have more data.

And this is why you see so many hucksters hyping trash, committing fraud, scamming users, cutting corners, and working legal loopholes at launch time to try to grow marketshare *at any cost*

Build the scale and you have the cashflow and feedback mechanisms in place to test viral marketing strategies, improve conversion rates, increase real (and perceived) relevancy, and lock in users.

"In a July 19, 2005 e-mail to YouTube co-founders Chad Hurley and Jawed Karim, YouTube co-founder Steve Chen wrote: 'jawed, please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.'"
...
"Our dirty little secret... is that we actually just want to sell out quickly," said Karim at one point. In an e-mail, Chen talked about “concentrat[ing] all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil.” - Ars Technica

Welcome to the exciting world of innovation in online media!

Without brand you have nothing.

With brand even a wounded duck full of unauthorized scraped content like YouTube or Mahalo somehow manages flight, at least for a while. Then you only need to find someone dumb enough to buy the growth story and purchase the bag of smoke before the fire emerges.

Of course people don't have to cut corners, lie, cheat, and steal to build a real business. Those are the strategies employed by people trying to sell value where none exists. You can do just fine by dominating a small niche THEN leveraging data to grow. It is not sexy. You probably can't hype it to the media. It might not lead to an 8 or 9 figure payday. But then you won't have to describe your strategy as "whatever tactics, however evil.”