Self Investment 101: Are You Measuring OPPORTUNITY Cost?

When you evaluate the actual opportunity cost of business opportunities, most client relationships, equity stake deals, and other partnership opportunities fall short of what you could do on your own. The only ways it works out is if their is a symbiotic relationship through different approaches that balance out each other's shortcomings, or if you can learn something from working with them.

Problems With Many Opportunities

  • Unwilling Clients: Many clients are unwilling to change their sites to add unique content or value to them.
  • Employee / Slave Wage: Work for equity stake partnerships where the partner provides the domain name and you do everything else are both lopsided and useless.
    • At any time the partner with lots of domains can decide to screw up the project you are working on together, and has 0 time investment and limited capital risk by only putting one or a few domains into the partnership.
    • 6 months or a year after working with you they can take all the knowledge you spent years learning and apply it to their more valuable names while giving you nothing for teaching them everything you know. They were not teaching you how to buy domains why they were accumulating them for years. Why give all that knowledge up for a slice of a slice of a slice?
    • Buy an alternative average quality domain and keep all the equity. Build it up with sweat equity and learn your market. Buy great domain names when you can afford them.
  • Follow the Crowd: Many marketers try to saturate a field with affiliates marketing their products and teach affiliates how to market that same product as a piece of the product that is sold. The margins on those opportunities get compressed with each additional competitor you sell that product to.
    • Many marketers show stats out of context, use meaningless sample sizes, and/or lie about the hows and whys.
    • People hype opportunities long after they no longer exist because they are addicted to the easy profits still rolling in from old work building out an affiliate network.

Are You Moving Up the Value Chain?

I am not against any of the above models as a starting point, as everyone has to start from somewhere. But if you....

  • love business
  • love what you are doing
  • want to create a sustainable business
  • can afford short term risk for long term stability

...you need to build equity from your work, and have a controlling stake in the outcome. If it sounds to risky to change then at least start building a site for yourself in your spare time.

What If? ...

Sure it would have been nice to have been an early programmer at Google, but for every Google there are thousands of market losers. Investing in yourself is the best investment you can ever make, and you one have to be right once.

What happened if you invested in Google a month ago? It seems those who just bought into that market hype just lost a couple dollars. Will Google go back up? Most likely. Will they increase in value at a rate as quickly as you can? Not likely.

How Links Can Build Value & Profits

This is a somewhat basic video about how links can drive value. Props to Stunty for his 12 Different Types of Links and How To Get Them.

How I Got My Google Ranking #6 Filter Removed

My site was stuck ranking at #6 in Google for a lot of keywords. The site that I had that got hit was a site that I had not built links to in a year, and the on page optimization for it was done years ago. Realizing the issue might have been on-site as much as off-site I decided to tweak it a bit...

  • All page titles on the site have a brand name in them as this site is devoted to reselling a brand. For the deep product pages the brand was at the end of the page title and on the homepage the brand had one word in front of it. About a half dozen core pages in the site started with the core keywords of a brand the site was reselling. For those page titles the brand related terms were moved to the end of those page titles.
  • Some of the sitewide image navigational links had alt tags in them that contained a piece of the core keyword that the site was filtered out for. I removed that modifier and let the navigational links be slightly less descriptive.
  • I also got the site a few new links which did not focus on the site's core keywords, but I don't believe that these were the key to getting it ranking again, as the site already has thousands of inbound links, and their were only a couple new links of low to average quality.
  • I nofollowed links to some of the to administrative type pages, but I don't think that was a make or break issue either.

The site is ranking in the top 3 or 4 on many Google IPs for many search queries. My sample size is only 1 site though, so I would love to hear what you did to get your sites ranking again if you have any sites that recovered from this Google penalty / filter.

Direct Visitors vs the Google Machine

Rich Skrenta recently mentioned an article about being within the confines of Google:

So it strikes me that the time is right to make some big bets. You can't make those within the system. My advice: start from scratch, take some chances in finding marketing channels outside the Google system. Be bold - make some bets while the upside is still very big and the downside is pretty small.

Google's is getting closer with some large ad agencies, which likely means stability and growth for that model:

"We are sharing our information to help Google develop the right platforms and Google is sharing technology to help us develop the best services for our clients," said Publicis Chairman and CEO Maurice Levy in an interview. "Google is not going to be an advertising agency," said Google Chairman and CEO Eric Schmidt. "We've all sort of figured out where everybody goes now."

The three big areas for growth for those not big enough to partner with Google are domain names, social networks, and public relations.

The first day auction results for the DomainFest auction are in. Most of the people buying domains are still speculators betting around Google / operating outside of the Google game. If you take your SEO knowledge to that market and add in a dash of content you are rolling your own strategy. Domains that seem ridiculously overpriced seem way too cheap when you add in a top Google ranking.

Max Levichin (or someone posing to be him) just started a blog. His first post offered tips for how to successfully launch a social networking development platform, including:

Make the #1 measurable goal of your PR team the amount of coverage that successful (or just interesting) developers get. People will jump through all kinds of hoops to be in the papers. Double so if the article lists them next to a [your] big brand.

As Google grows smarter and the web gets more competitive the key to dominating Google is to matter outside of Google and/or own the media. The media is getting pretty cheap, and trending lower.

While the networks are sleeping talent is looking to become the publisher.

Video Gary Round 2?

Found this video ranking #19 in Yahoo! for SEO...

And it is only going to get worse with guys like John Reese recommending everyone become an internet marketer selling to internet marketers just so he can prime the pump to sell his latest product and build a downstream of affiliates. Stake your claim before the fake experts turn your market into snake-oil:

And by creating a lot of fake value (encouraging everyone to pose as experts) you actually ruin chances of all new commers as customers will grow more and more skeptic and will tend to go for proven marketers (avoiding the anonymous which might also have a lot to offer)

Yahoo! Search, Please Turn Down Site Authority in the Algorithm or Drop Tag Pages

Does it make sense for MySpace profile pages to rank on the first page for one of the 10 most competitive terms on the web? Should English to English page translations inherit domain authority from another domain? I don't want to out anybody, but I see way too many tag pages ranking in Yahoo!'s search results. The easiest way they can improve their search results is to simply delist any page with tag in the URL.

If they continue down this path inside a few months they will link to nothing but internal site search / tag pages on other sites. Where is the value, innovation, or thought process in that? What percent of Yahoo! searchers want to see Wordpress.com tags pages and how many Yahoo! Pipes pages are tagged with a brand name? What does a searcher do when they land on a page like this?

If you are going to trust user generated content on authority sites, expect a lot of users to create content just for Yahoo!. :)

Another Update to SEO for Firefox

We updated SEO for Firefox again. The Yahoo! childnodes error is fixed, and we added BOTW directory listings to the stats we pull in to SEO for Firefox.

Freemium Publishing & Sustainable Business Models

Here is a great speech by Chris Anderson about how reputation and attention are becoming the new economies upon which much of the internet (and potentially offline) world may be based upon.

Freemium consists of giving away value (and possibly wrapping it in ads), as a lead generator to sell premium products and services. The model minimizes consumer risk by allowing them to become familiar with and reliant on the service before paying for it.

A Startup Nation article explains why the model is so powerful:

David Beisel, principal at Masthead Venture Partners in Cambridge, Mass., says the freemium model is attractive to VCs for the same reason it’s attractive to entrepreneurs. “Giving away a free version of the service allows consumers to not just learn about it through collateral or a free trial,” he explains, “but it presents them the opportunity to fully adopt the service and incorporate it into their lives.

“Those types of customers are ones who begin to evangelize the product to others. Entrepreneurs then greatly benefit, as powerful and inexpensive word-of-mouth marketing kicks in.”

One of the things I believe is that just like services that move toward free, all forms of content (even specialized high value niche content) will follow the same path. Information that is sold as a product (not a service) will keep seeing its margins decline as self satisfying hollow chucking and local substitution (ie: wikipedia editors rewriting your content, or someone uploads it to a torrent site) drive the value of most information to nothing.

People buy the reputation, experience, story, and relationship. It is more emotional than logical, and so publishers will become interactive media artists.

Video link via Seth.

Pharmaceutical Research Information Properly Optimized

The WSJ published an article about the fraudulent research sponsored by the pharmaceutical companies which push antidepressant drugs on children:

A total of 74 studies involving a dozen anti-depressants and 12,564 patients were registered with the FDA from 1987 through 2004. The FDA deemed 38 of the studies to be positive. All but one of those studies was published, the researchers said.

The other 36 were found to have negative or questionable results by the FDA. Most of those studies -- 22 out of 36 -- were not published. Of the 14 that were published, the researchers said at least 11 of those studies mischaracterized the results and presented a negative study as positive.

The NYT is publishing custom branded content to help these advertisers. And, from a few months back, here was Google's take on health marketing:

News reporters may focus on Pharma’s annual sales and its executives’ salaries while failing to share R&D costs. Or, as is often common, the media may use an isolated, heartbreaking, or sensationalist story to paint a picture of healthcare as a whole. With all the coverage, it’s a shame no one focuses on the industry’s numerous prescription programs, charity services, and philanthropy efforts.

Many of our clients face these issues; companies come to us hoping we can help them better manage their reputations through “Get the Facts” or issue management campaigns. Your brand or corporate site may already have these informational assets, but can users easily find them?

We can place text ads, video ads, and rich media ads in paid search results or in relevant websites within our ever-expanding content network. Whatever the problem, Google can act as a platform for educating the public and promoting your message.

Prozac vs Tryptophan - On June 15, 1993, the FDA Dietary Supplement Task Force published a report on the work it had been doing in the area of developing FDA policy around nutritional supplements. On page two, the report admits, “The Task Force considered various issues in its deliberations, including... what steps are necessary to ensure that the existence of dietary supplements on the market does not act as a disincentive for drug development.”

This is where the manual editing of search results gets tricky. The multi-billion dollar company rarely gets edited, but in many cases their information is much less honest than that provided by the independent PageRank 4 website

Alternative Energy, Alternative Media, & Asset Bubbles

If you have ever wondered how the mainstream media works, watching Manufacturing Consent does a great job of displaying its sordid underbelly. The bias is not always this obvious, but it is always there:

The most recent issue of Harper's has an article by Eric Janszen about financial bubbles throughout US history named The next bubble: Priming the markets for tomorrow's big crash. A couple key quotes:

We have learned that the industry in any given bubble must support hundreds or thousands of separate firms financed by not billions but trillions of dollars in new securities that Wall Street will create and sell. Like housing in the late 1990s, this sector of the economy must already be formed and growing even as the previous bubble deflates. For those investing in that sector, legislation guaranteeing favorable tax treatment, along with other protections and advantages for investors, should already be in place or under review. Finally, the industry must be popular, its name on the libs of government policymakers and journalists. It should be familiar to those who watch television news or read newspapers.

The media rides the story up and rides it back down. We always need something to talk about. It happens to the media offline just like it does to niche publishers online. But the memory and analysis are short and shallow, quickly pointing a finger at a false cause, fixing symptoms like antidepressant drugs do:

The U.S. mortgage crisis has been labeled a "subprime mortgage crisis," but subprime mortgages were only a sideshow that appeared late, as the housing-bubble credit machine ran out of creditworthy borrowers. The main event was the hyperinflation of home prices. Risks are embedded in the price and lurk as defaults. Even after the faith that supported a bubble recedes, false beliefs continue to obscure cause and effect as the crisis unfolds.

It puts the formation of the alternative energy market in a fascinating perspective, especially as I finished reading about the demise of ACA and hung up the phone from an automated call from a sleazy telemarketer company calling me at 8pm, stating their partnerships with non-profits to help consolidate the debt that I don't have due to the country's current credit crisis.

When economic fraying appears at the weak edges of the market it hints that more is to come. Long time bulls are turning bearish and the stock markets are hurting worldwide. And so history repeats itself for the people, yes.

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