Because of the low cost of online distribution a company can quickly grow from being one of your affiliates, to one of your leading sales channels, to being the leading competitor. And once they grow into a destination you can't just cut them off without hurting your customers or your brand, as Ryanair will soon find out.

The strategy of starting off with a harmless consumer focused service that can spread far and wide is what allowed Google to create a system where its leading competitors paid Google to market the Google brand across the leading web properties. It is the same set up that benefits new bloggers...most companies don't see them as competitors until after they dominate the market.

In a recent interview Microsoft's Brad Goldberg said:

Today, if you look at search behavior, search actually isn’t good around verticals. In many respects it is not in the economic interest of a lot of vertical sites to expose more and more of their content to search engines because then they risk being aggregated in terms of traffic.

At some point Google will reach a logical upper limit. Google OneBox is encroaching on many large verticals, and Google merchant search is not far behind.

At the other end of the spectrum, many marketing companies offer to help you get traffic cheaper than you can get it from Google, but only at the expense of creating competition subsidized by your own pocketbook! Years ago Article Insider was selling traffic for pennies a click, but you had to buy years worth of clicks upfront, and then when they published your content the clicks you were buying were below the fold while they placed Google AdSense ads above the fold - so if you wanted real exposure you were stuck paying Google anyhow. More recently John Andrews pointed out a new Marchex strategy where publishers pay Marchex to develop a domain name that offers them low cost traffic, at least temporarily.

By “partnering” with Marchex, these small business men have handed over a portion of their web presence to a company that has invested heavily in their own market. Marchex acquired — and prepped for local business success — a collection of domains like DentalCareIssaquah.com. Today that domain is offered to this dental practice, but tomorrow when they stop paying Marchex’s preferred rate, that domain will indeed be offered to the next bidder. Thanks to Issaqua Dental’s continuing investment in Marchex, that hyperlocal domain owned by Marches has increasing asset value in that local market. Clearly Marchex is a competitor. What a great business strategy! Compete with local small businesses while marketing yourself as their partner, collecting a share of their revenues!

If you are going to make a big online marketing investment make sure your site has reached the point of diminishing returns before looking elsewhere. And make sure that when you look elsewhere you are not diminishing your longterm returns by subsidizing a new market competitor.

When the .ME landrush began I thought it would be possible to get a couple fun names like SEO.ME and QUIZ.ME for about $200 each. Boy was I wrong! Look at these .ME domain auction prices...

I have seen far better .info (and sometimes .net and .org) names with far more resonance go for prices far below these prices. Many international CCTLD names are dirt cheap. It is hard to find an online market more saturated than the search engine optimization field, and yet SEO.CO.NZ is already well ranked in Google New Zealand for SEO while having a buy it now price of $10,000 NZD, which amounts to $7,251.78 USD.

The .ME prices bode well for strong launches of future extensions like .web and .blog...but most new extensions will be at best marginal successes, especially given that Google is not likely to trust most of them.

I was just fixing up our Robots.txt tutorial today, and figured that I should blog this as well. From Eric Enge's interview of Matt Cutts I created the following chart. Please note that Matt did not say they are more likely to ban you for using rel=nofollow, but they have on multiple occasions stated that they treat issues differently if they think it was an accident done by an ignorant person or a malicious attempt to spam their search engine by a known SEO (in language that is more rosy than what I just wrote).

	Crawled by Googlebot?	Appears in Index?	Consumes PageRank	Risks? Waste?
robots.txt	no	If document is linked to, it may appear URL only, or with data from links or trusted third party data sources like the ODP	yes	People can look at your robots.txt file to see what content you do not want indexed. Many new launches are discovered by people watching for changes in a robots.txt file. Using wildcards incorrectly can be expensive!
robots meta noindex tag	yes	no	yes, but can pass on much of its PageRank by linking to other pages	Links on a noindex page are still crawled by search spiders even if the page does not appear in the search results (unless they are used in conjunction with nofollow on that page). Page using robots meta nofollow (1 row below) in conjunction with noindex do accumulate PageRank, but do not pass it on to other pages.
robots meta nofollow tag	destination page only crawled if linked to from other documents	destination page only appears if linked to from other documents	no, PageRank not passed to destination	If you are pushing significant PageRank into a page and do not allow PageRank to flow out from that page you may waste significant link equity.
link rel=nofollow	destination page only crawled if linked to from other documents	destination page only appears if linked to from other documents	no, PageRank not passed to destination	If you are doing something borderline spammy and are using nofollow on internal links to sculpt PageRank then you look more like an SEO and are more likely to be penalized by a Google engineer for "search spam"

If you want to download the chart as an image here you go http://www.seobook.com/images/robotstxtgrid.png

I recently had an email chat with Alden DoRosario from Chitika about the recent rapid growth of their ad network. They have been aggressively signing up bloggers and other independent publishers, and are now getting over 2 billion monthly impressions, with their behaviorally targeted Premium ads getting hundreds of millions of monthly search driven impressions, putting their search distribution network on par with Ask.com.

How their premium ad network works is they target the ads to be relevant to search query that sent traffic to the publisher's site, thus even if the ads are not shown on a search page they still are seen by searchers right after they search and click through to the site.

Alden gave me a link for a $75 bonus code for any publisher that makes $75 in commissions before the end of October. Publishers are paid 60% of the ad click value, with the house getting 40%. I just added their ads to my mom's weight loss blog. It looks like their ad network is not quite as deep as Google's but they do well for higher volume search queries.

Most search engines are a backbone for an ad network, but it is hard to build query volume for a new search engine. Just look at how few people have used Wikia Search in spite of endless hype. Wikia Search got a couple million lifetime searches whereas Chitika gets billions of monthly ad impressions.

Most people do not feel they have a search problem, but many publishers feel their content could be monetized better. If you didn't have huge search distribution how would you create a search ad network? If an ad network grows big enough do you think they could do it the other way around, using their ad network distribution as a backbone to start a search engine?

Disclaimer: The free $75 bonus is an affiliate link, but when I chatted with Chitika I pushed hard to get publishers the best payout bonus and longest payout bonus period possible rather than focusing on trying to maximize my commissions.

In the past I have mentioned that I am not a fan of doing lots of traditional SEO consulting for a number of reasons (mostly economic), but I still work on a few large projects from time to time. One of the great parts about working with large corporate clients is when you uncover holes in their strategy, finding areas and opportunities that they can own just by deciding to. To some degree it feels like editing the search results, just like a search engineer, seeing you will pushed upon them.

Unlike playing with Wikia Search (which only has a couple millions lifetime searches and nearly a million edits!!!) some of the changes you suggest for enterprise level sites can bring millions of high value visitors to their business free of charge.

When taking on new consulting projects you have to price with the confidence that you will be able to find something that really helps them build their business (and if you are not there is no point taking the project). At first sometimes it can seem like you set the bar too high, but when you do strong research and have a strong partner to bounce ideas off back and forth good things just happen.

Those easy big wins are rare finds, but seem to happen on every project, just in different areas - site structure, duplicate content issues, keyword coverage, internal linking strategy, etc. Digging into a large site with fresh eyes allows you to see things that people who have been close to a project for a long time can not see. Why is that link there? Can this page rank for a couple more related queries? You end up stumbling into something that catches your eye and keep digging in until you have a good solution that earns far in excess of the consulting investment.

With affiliate and AdSense oriented sites the wins are typically much slower, smaller, and harder - sometimes requiring 6 months of effort just to get to break even, and requiring you to fight for every additional link and every additional rank. But the slow and steady path is a stronger business model for SEOs than giving clients millions of dollars of advice for a small fraction of the price. If only I knew how to talk Fortune 500 companies into giving a % of the upside, as that would make consulting so much more profitable than the slow and steady model. :)

Google hires remote quality raters part time for $15 an hour. SEOs working in client based business models usually top out somewhere in the mid 6 figure range. CEOs and some leading web publishers make deep into 7 or 8 figures a year. And some of the early Google engineers might have 9 figures worth of stock. And every one of them is getting paid in part to edit the search results. Does your business model match your ambitions?