A moderator at WebMasterWorld, Ian Turner, has been missing since the end of the WebMasterWorld Conference held last week in New Orleans. He was reported missing over 48-hours after failing to meet a flight to the UK in Atalanta.
Anyone with information on Ian Turner or who spoke with him on Saturday or Sunday are asked to contact WebMasterWorld founder Brett Tabke (contact info below)
(co-written by Bill Stroll, Sales and Marketing Manager)
Christmas is coming. Six months from today, retailers and E-Tailers relying on a strong holiday season will be assessing the bounties of the season. The winter holiday season is the most important segment of the year for North American retail businesses, often accounting for more than half of annual revenues. For many businesses, the period between October and mid-January makes or breaks the bottom line. For online businesses, the early months of summer are the right time to be thinking about the end of the year. Conventional wisdom states it takes about three to four months to achieve Top10 placements with an already established website. It can take even longer with new sites.
Seasonal advertising is almost always based on what are called saturation campaigns. For instance, North American consumers will be swamped with images of Santa and sugar plums. Songs by Bing Crosby and David Bowie will ring nostalgically through our minds. Streets, shopping malls and schools will be festooned with tinsel, holiday decorations and ornamentation designed to get one and all into the season of getting and giving. Increasingly the Internet has taken the holiday spirit, or at least the shopping part of it, away from the mall and onto the monitor.
Savvy retailers are taking advantage of the ever expanding online audience afforded via search marketing and Internet advertising. Retailers who once had a localized marketplace are now competing with retailers from around the world for customers. Regardless of the fact that nobody's real-world store is starting to look a lot like Christmas yet, the race for strong search engine placements for Christmas related items begins this month. Is your website positioned to achieve the visibility it needs to give you the Christmas season you want for your business?
Time is of the essence. While it might be the most wonderful time of the year, Christmas, from a search marketing perspective, is just around the corner. This is an opportune time to begin the process of planning for success.
Choosing strong keyword phrases to market towards is extremely important. Lycos has studied keywords used by search users for years, compiling the weekly list, the Lycos 50. Appearing for the first time this week as the eighteenth most searched word is, "Christmas".
That conforms to StepForth's weekly tracking of holiday related keyword terms which shows a steady rise in the use of Christmas related keyword phrases starting right about now. In May 2004, 73,276 people entered the word "Christmas" at Overture (now Yahoo Search Marketing). In July 2004, that number jumped to 90,215. In August 2004, there were 111,261 Overture searches for Christmas. By October 2004 there were nearly 415,000 searchers for the word Christmas. In November, the floodgates open with 2,426,425 searches, a number that more than doubled in December with 5,383,254 searches conducted for Christmas. A common thread in the study shared by all holiday related phrases shows interest starts to increase radically 90 - 120 days before the calendar date of the holiday.
You might first want to figure out exactly how you wish to be visible on the major search engines as we move towards the holiday buying season. There are two basic types of search engine advertising characterized as Organic or Paid. Organic ads are the general free listings that come up in orders of 1 - 10 under related keywords or keyword phrases. Paid ads tend to be found above or to the right hand side of organic search results and are also distributed across networks of millions of other websites. Knowing the most advantageous ways of using both common forms of search advertising builds a strong foundation and forms a good starting point.
Both types of ad drive traffic though recent studies have shown that traffic driven by organic listings outpaces traffic driven by paid-advertising by a margin of almost 80%.
When most search engine users think about search, they visualize the free, organic listings. Achieving a Top10 organic placement is essential for online retailers who want to be noticed against the millions of other Christmas or holiday related listings that will begin to appear in the coming months. A recent Eye-tracking study of search engine users by Kelowna based SEM Gord Hotchkiss reveals, "There seems to be a "F" shaped scan pattern, where the eye tends to travel vertically along the far left side of the results looking for visual cues (relevant words, brands, etc) and then scanning to the right if something caught the participant's attention." In other words, because they occupy the best real estate on the screen, organic placements are seen by a greater number of eyeballs than their paid-advertising counterparts over to the right.
That's not to say that paid search advertising is a waste of money. It most certainly is not. It pays to pay for paid-search advertising for a number of reasons. Paid search advertising offers distribution opportunities that organic listings do not. Through their networks of partnered websites and publications, ads placed with both Google and Yahoo, (along with second and third tier competitors) tend to appear on literally hundreds of millions of other web properties, based on similarities between text on those properties and text appearing in the ad-copy. Known as contextual distribution, the networks of websites displaying paid advertising from one of the major search engines continues to grow as more independent webmasters sign up as distribution partners.
Another good reason to plan for a paid search advertising campaign is the instant gratification of instantly appearing on the first page of search results under the keyword phrases you have chosen to bid on. Seconds after entering your ad-copy and placing your click-through bids, your advertisement will start to appear on search results. PPC is often used as a temporary measure by search engine optimizers until organic listings begin to appear in order to ensure their client's service or product receives attention as quickly as possible.
Most search marketers agree that a coordinated search engine marketing strategy is important for advertisers in competitive categories and during highly competitive seasons such as Christmas. Understanding the common behaviours of search engine users helps to define the parameters of a smart search marketing campaign. A groundbreaking study by iProspect CEO Fredrick Marckini shows that 92% of all sales generated by search engine marketing actually occur offline. In other words, search engine users tend to research products before purchasing them from a local source or ordering them via traditional mail. This makes search marketing, both in paid and organic forms, an important branding tool. High placement in organic listings, accompanied by a paid-ad which is distributed on other sites relating to the product advertised, brings credibility, customer awareness, and ultimately, converted sales.
Christmas sales have increased every year for the past five years as have searches for holiday related keywords. Just as the seasons follow predictable patterns, search engine users tend to choose seasonally predictable phrases. Given the fact major interest in Christmas related words begins to climb in October, July is the right time to start your organic search engine optimization work. It is also a smart time to begin planning your paid-search advertising campaign and discussing strategy with your search engine marketers. Knowing the trends and how to harness the power of search engine marketing is only part of the battle. Making effective use of that knowledge is the other.
Over at the Search Engine Watch forums, a search engine marketer who goes by the nickname "Nuthin" put up a post about a problem he is having with Google AdWords.
Nuthin is working for a new but unnamed web directory. He used the word TARGET in the copy of a purchased ad, part of which read, "Reach your target audience today". This all makes sense so far right?
He was sort of stunned to receive an email from Google stating, "Due to trademark reasons, we do not allow advertisers to use 'target' in their Google AdWords ads. This term may be trademarked either for a certain product or service category and may apply only in certain countries."
It appears the major US department store chain Target, owner of the domain target.com, has a trademark registered against the word and claims right over commercial use of the word Target, at least in relation to Google AdWords.
Helpful moderators Ian McAnerin and Danny Sullivan both suggested Nuthin appeal the decision, citing the likelihood of automated electronic monitors making a decision that would almost certainly be reversed when viewed with human eyes.
The most creative response came from UK marketer ProjectPHP who immediately tried to phone former members of UK 80's pop band "The The" to see if they cared about the rampant commercial use of a word that constitutes their basic brand name. Both founders of the band, Matt Johnson and Keith Laws, were unavailable for comment.
Many search industry observers see click fraud as the number one threat to the growth of the Internet economy. An even greater threat has emerged one that not only places the entire infrastructure of the Internet at risk, it also threatens non-Net users.
Identity theft has always been an issue in our economy, at least as long as there have been schemers and confidence scams. Before the advent of the commercial Internet, it would take a great deal of knowledge and skill to assume another's identity. It still does however; a decade into the age of the commercial Internet, accessing and making use of personal information has never been easier for cyber-criminals. Nearly everyone who uses the Internet has experienced an attempt by somebody somewhere to obtain personal identifying information. From phishing expeditions like the phony eBay and PayPay account update emails everyone receives to more complex methods such as the subtle installation of spyware, viruses and worms, criminals have found a nearly open range where they can exploit the carelessness or weakness of others with virtually no one to stop them.
In 2003, the US Federal Trade Commission noted that 1 out of every 25 adults in the United States was a victim of identity theft. That figure is two years old. Since then, we have seen stories about electronic break-ins and the theft of hundreds of thousands of pieces of personal information leak out from data storage and mining firms such as ChoicePoint and Lexis-Nexus. In comparison, the FTC estimated the number of Americans who were victims of credit-card fraud at about 1 out of every 20 in 2001.
ID theft is, according to FTC figures, the most popular and fastest growing form of consumer fraud. Over 2004, the FTC reported ID thieves took over $100 million from financial institutions, or an average of $6,767 per incident. For individual consumers, the numbers are even more staggering. As reported by Janet Wu of by Boston television station WCVB-TV, money stolen through identity theft amounted to over $50 billion in the United States last year. In other words, nearly $200 per US citizen was somehow stolen due to identity theft.
That was last year. This year the numbers are expected to rise dramatically. On June 20, CNN reported that a breach of security at a third-party processing firm exposed nearly 40 million credit card accounts to potential fraud. 22 million Visa card holders and a further 14 million MasterCard were accessed over time when hackers busted into Tucson based CardSystems Solutions and installed a script that searched out specific types of card transaction data. The intrusion was discovered and stopped on June 20 but not before the hackers managed to export information on over 130,000 unique card holders. Information gained included names, credit card numbers and personal security codes.
This is not only a concern for individual consumers and financial institutions. The massive increase in identity theft also presents significant national security issues. The criminals who steal and use other's identities tend to be highly organized and work in teams. For them, this is a business, not an avocation. When criminals can compile enough identifying information about individual citizens to ring up thousands of dollars against their credit or bank cards, what stops them from selling that information to terrorists, foreign intelligence services or other organized criminals? Virtually nothing, as a recent report from Great Britain demonstrates.
Americans are not the only people in the world who are affected. On June 23, an undercover reporter from UK newspaper The Sun, Oliver Harvey, wrote about how he purchased information on over one thousand British citizens, from a company in India. For less than five dollars per person, Harvey was able to obtain bank and credit card digits and pass-codes, addresses, driver's license info, and even passport registration numbers. Harvey's contact in India, a Kkaran Bahree claimed to be able to access and pass details from over 2000 accounts per month through a network of call center workers in Delhi.
It is astonishingly easy to steal personal information. What is even more astonishing is the apparent caviler attitude shown until now by the major data storage and credit corporations who have all moved to close the barn door long after the horses have escaped. Recent laws passed in California and Illinois now put the onus on data storage firms to immediately inform consumers when a breach of personal data occurs. Before such laws, denial was often the first line of defense for many large data storage corporations.
Unfortunately, there is simply no way to secure electronic data from prying eyes. As any junior hacker will tell you, breaches in security are found as quickly as that security is established. The onus therefore remains on the consumer to take action to protect themselves and their personal information. A few years ago, consumers were told to shred all mail from financial institutions before disposing of it or recycling it. Shredding worked for paper documents but is somewhat more difficult for electronic ones. Today there are small steps consumers can take to protect themselves and knowledge is by far the best defense for individuals.
The first and most important thing for consumers to learn is their legal rights. For instance, many Americans don't realize that section 609(e) of the Fair Credit Reporting Act gives them the right to examine the signature on a contract to prove it is not their own. As long as you can provide legal proof of identity and a police report or affidavit, creditors have an obligation to provide copies of transaction records for your inspection.
A second thing consumers should do is monitor their credit reports. Credit reporting firms such as Equifax, TransUnion and Experian allow consumers to view their personal credit reports for accuracy and report inconsistencies. For US residents, the federal Fair Credit Reporting Act requires each of the major nationwide consumer reporting companies to provide consumers with a free copy of their credit reports, at their request, once every 12 months. This is as important as reviewing your monthly bank statement as criminals often wait months or even years to make use of personal identifying information.
Thirdly, it is important to compile as much documentation as possible to prove your case. Collection letters, previous credit reports, a legally notarized affidavit, and whatever other evidence you can gather will help when you make complaints to authorities. Since electronic identity theft is a relatively new twist on an old game, you might have to provide local police or other authorities with information about ID theft. You might need to remind them that a police report is necessary for the credit reporting agencies to take action. In some jurisdictions, state or provincial law does not yet cover identity theft. If that is the case, ask to file a miscellaneous incident report. If local authorities are unable or unwilling to help, you might need to take your case to state or provincial police forces or even federal policing agencies such as the RCMP or FBI.
Consumers should understand that creditors are becoming more knowledgeable about identity theft. While they might resist an easy settlement, it is in their best interest to communicate with and cooperate with the consumer. It is up to the consumer to provide as much information and proof of their innocence as possible. It is also up to the consumer to take measures to actively protect their personal data. Banks recommend changing your personal ID number (PIN) every three months. They also recommend that consumers become a bit more creative when choosing their PINs. When doing so, avoid using information that is easy to figure out, such as phone numbers, birthdates, or a series of consecutive numbers.
Most importantly, never stop learning about identity theft, how it can affect you and what you can do to protect yourself. If you don't already know the managers of your bank branch, this might be a good time to meet them, if only to put a face to your name in their minds. When your credit history is under attack, you have only your personal credibility to fall back on. Even in an increasingly electronically driven society, personal credibility relies on the strength of your relationships. This might be a good time to start building them or shoring them up.
Identity theft is a problem that is not going to go away soon. Even with the development of "smart-id" cards such as biometric identity cards, the most vulnerable financial transactions take place electronically where even the most stringent biometric information is absolutely useless. Consumers need to be aware that personal information is being collected by lots of entities; a lot more personally identifying information is being collected than we are aware of. As too many stories remind us, security is not always foolproof. It is up to you to protect yourself.
Here are some useful links designed to help victims of identity theft. They might help you avoid becoming one as well.
Jack Kilby, the man whose invention of the integrated circuit in 1958 led to the power of today's microchip, died Monday at age 81. Shortly after being hired at Texas Instruments, Kilby designed a wafer thin crystal platform (the chip), which served to connect components such as transistors, capacitors, and resistors that were previously connected by wire into a single processing unit. This allowed for greater processing speeds and, most importantly, mass production of microchips.
While Kilby claimed over 60 patents in his 25-year career with Texas Instruments, his first, the invention of the microchip, has by far had the greatest impact on human evolution. Kilby also invented the hand held calculator and was one of the inventors of thermal printing, which was used by millions of office workers in early fax machines.
Kirby was not alone in his micro-electronic fascination. Within a year, another innovator, Robert Noyce co-founder of Intel had also created a microchip. Noyce's innovation was to use silicone as the basis of the chip along with pioneering the planar chip printing process still used to connect components today. Seven years later in 1965, Noyce's business partner, Gordon Moore noted that engineers at both Texas Instruments and Intel were able to double the number of transistors on a circuit (microchip) approximately every 24-months. This observation continues to hold true and has come to be known as Moore's Law.
The invention of the integrated circuit was the foundation of the information age. Practically everything we make and consume, from cell-phone to agri-business, has been affected by the microchip. Over the past 50-years, science and technology have served to exponentially improve our knowledge of the universe and of ourselves. The biggest barrier had always been the processing time related to information. Kilby broke that barrier and for the accomplishment was awarded the Nobel Prize in Physics in 2000.
This week, Google leaked information about another very smart thing they've done. Google is about to introduce an online payment system to help facilitate e-commerce. While search engine observers speculated that Google was going head to head with Pay Pal, CEO Eric Schmitt was quick to dispel rumours that they were gunning for Pay Pal. In an interview with Reuters, Schmitt said that Google was not going to offer a "person-to-person stored-value payments system" like PayPal's, where money is briefly stored in trust during the transfer.
"The payment services we are working on are a natural evolution of Google's existing online products and advertising programs, which today connect millions of consumers and advertisers," Reuters reported Schmitt saying during a brief interview.
Google has been experimenting with a payment system since March of this year when it began testing a third-party system to send payments to webmasters running AdSense advertising.
The move is good for Google, which draws over 95% of current revenues from paid-advertising. Google wallet might put them in the position of facilitating the entire online product purchase experience.
Diversifying services that can be easily monetized is also important for investors who have rewarded the Google with a reversal of a small slump in share prices earlier this week. The reversal might come at the cost of Pay Pal owner eBay whose shares have lost 2% since rumours began circulating two days ago.
The summer of 2005 is going to be an interesting one. The world of search will be fundamentally different by Labour Day. From the recent changes at Google (the effects of which will be shown over time in the core algorithm), to the introduction of several unique types of search engines, dozens of fresh ideas and innovations are finding their way onto our monitors each day. The landscape of the search environment is going to alter its appearance before the leaves change colour in mid-autumn. These changes should serve to solidify the market for a number of new niches in the search-marketing sector.
The environment has already shifted in substantial ways. For the most part, these shifts seem natural and in most ways will be enormously beneficial for search engine users, advertisers and marketers. It is a bit overwhelming though. The introduction of so many new features, tools and types of search in such a short time makes it difficult to phrase thoughts about the future of search, even three months down the road.
In the last year we have seen the introduction of new types of search tools such as local search, vertically themed engines, video search, and desktop search appliances. The four major search engines and about a dozen well placed competitors have spent the year collectively inventing, innovating, acquiring, and coping from each other. Not only are these new tools very different from the general search engines of previous years, the quantity and number of sources these tools draw references from has grown. As Andrew Goodman points out at Traffick, the number of places a search-generated reference might appear has also grown with Google, Yahoo, Ask and MSN furiously creating new real estate to display them on.
For search engine users, the environment is evolving in what appears to be a beneficial way. Information continues to become more accessible as the mainstream search engines learn to better sort results with stricter relevancy standards. Local search offers users an experience combining the Yellow Pages, comparison-shopping and instant mapping. Vertical search engines cut a lot of static out from results by honing in on industry and interest specific search results. Personalization features like desktop search applications, toolbars and mega-storage search-friendly Email accounts can save hours of looking for information a user has already seen each month.
Search engine users appear to endorse the new tools and features by adopting their usage. A recent Harris Interactive survey commissioned by iCrossing shows that consumers are rapidly adapting to make use of the various new types of search.
According to the survey of 2139 US adults between April 19 - 21, 51% of US adults use the Internet for shopping with 80% of them using the 'net to compare prices. Local search is gaining a presence with nearly 50% of users looking for a local shop to purchase goods researched over the Internet. 54% of searchers use the Internet to find people and businesses instead of the phone book with most looking for personal contact information. By the end of the summer, it is reasonable to expect this trend to have a major effect on the services offered by search marketers and the expectations of their clients.
The search marketing industry is already a highly stratified environment with paid search marketing and organic search optimization defining the two basic search-systems influencing the environment.
Those focusing on paid search marketing have spent the last year learning to take full advantage of new places for ad placement created by the Big4 and their competitors. They are also learning how to best use the application programming interfaces offered by the major search engines to target their clients' advertising based on geography, time and season. There has been a rationalization in keyword prices over the past six months with a general lowering of keyword click-bids but concerns over click-fraud continue to grow.
Click-fraud in the pay-per-click market is said to be on the rise but a highly professional niche is growing to address the problem. Since last year, several firms have established PPC Fraud analytics and detection services . Anyone with a high ad-spend should consider the advice offered by these firms.
Another interesting paid-search niche is the growing Pay-per-call billing model in which advertisers pay a flat-fee per call as opposed to a bid-fee per click. Currently offered by AOL and MIVA (formerly FindWhat), Greg Stirling from the Kelsey Group predicts the pay-per-call model could grow from its infancy today to a $4billion industry by 2009. According to Stirling's study of the industry, major online publishers MediaTracks and ZiffLeads are changing their business models to promote pay-per-call. Kelsey says the pay per call model will help drive live-leads to businesses that tend to be more valuable than electronic leads as there is immediate personal interaction between the potential buyer and the vendor. As it is easier to track telephone connections than it is to trace an individual over the Internet, pay-per-call is also promoted as a solution to click-fraud.
Serving the most obvious paid-search niche is the legion of smaller firms existing in, or jumping into, the search-advertising arena. From the major traditional media publishers such as the New York Times or TimeWarner through the AOL network to long-term players such as Kanoodle and FindWhat (MIVA), a significant number of Internet users are being delivered paid-advertising that matches the topic or context of the document the ad appears on, for fractions of the costs of Google and Yahoo Search Marketing advertising.
Over on the organic Search Engine Optimization side of the industry, several major changes that happened in the past twelve months are showing their effects today.
The first has been the introduction of new forms of search such as local search and vertical search tools. In both cases, unique databases are used to extract search results, even when the service is offered by one of the major search engines. Google local for instance draws its original results from the Yellow Pages based on zip codes instead of drawing results from its general database. The vertical search engine Become.com has its own spidered database and its own propitiatory ranking algorithm known as Affinity Index Ranking. By expanding the number of databases search results are drawn from, the search firms inadvertently create new niches and services for SEOs to specialize in.
A second trend over the past year is the flattening out of Google traffic numbers and the subsequent increases MSN and Yahoo have enjoyed. Today, the combined traffic driven by MSN and Yahoo exceeds that from Google. That might not sound like a huge shift. Two years ago however, Google drove almost 85% of organic search traffic by feeding results to practically everyone. For the past year, MSN and Yahoo have created their own spidered results. This has led to a relevancy challenge between the major search engines.
New and unique algorithms are starting to take hold across the search landscape with MSN, Google, Yahoo, Ask Jeeves, Become, and others using engine specific algos instead of drawing results from a competitor. This trend leads to specialization within SEO shops with different staff becoming expert in different engines. For example, Google just updated its core algorithm and is examining documents within websites with an ever-expanding view of a website's historic existence. This shift has led to a major shift in link-building strategies and has pushed many SEOs to review their techniques. Thing is, what works at Google won't necessarily work with MSN, Yahoo, or Ask Jeeves.
As search engine users become more adept at finding the best search service for their specific need, the range of options for search advertisers in both paid and organic search marketing systems is increasing. Users are starting to adopt more sophisticated means of search and in turn search engines and ad firms are becoming more sophisticated. As the knowledge necessary to conduct a full fledge search engine marketing campaign has increased exponentially, specialization of services is taking shape both in SEM shops and in the world of freelance tech-workers. Established SEO and SEM shops are hurrying to catch-up. Those entering the field might want to think about niche-market SEO and SEM services. The environment is ready to support them and for those with well-developed expertise, that environment is only getting more resource-full.
Earlier today, Montreal based meta-search engine Mamma.Com announced the beta release of Mamma Health Services, the first of a line of "deep web" vertical search tools planned to be introduced over the next twelve months.
A vertical search engine is one that focuses on unique range of subjects, such as health, travel, or shopping in the quest to present users with topic-specific search results. For a meta-search company like Mamma.Com, establishing a series of vertical search tools might be a wise move given the numerous sources available for them to call information from. The term "deep web" is used to define areas of the web not commonly indexed by search engines such as information found in password protected areas, content accessed by subscription, or documents extracted from protected databases. MammaHealth.com cites references from 7 or 8 highly reputable sources including WebMD.com, Medicine Net, Health Day, and the UK National Health Service.
In an interview, Mamma.com CEO Guy Faure, Mamma has "...identified specialized sources in healthcare marketplace, offering single door entry to the best sites with up to date data going beyond conventional search... to actually retrieve and present content right away to the user instead of just presenting search results leading to an index page."
Searchers are presented with an easy to read page providing quick reference answers which are arranged in a fashion designed to educate as much as inform with the first results leading searchers through four early sections labeled "about", "causes", "symptoms", and "treatment".After the "treatment" section, there is a news section constantly updating information from the pages of the trusted sources referenced. Lastly, there is a section labeled "metasearch" providing all results found in the databases of the trusted sources.One thing searchers won't see at the beta version of MammaHealth is paid advertising. Faure noted Mamma.com wanted to avoid paid advertising on the Health-vertical but would not rule it out for future vertical search engines.
An interesting feature to MammaHealth.com is that the limited number of sources allows for instantly updated information delivery. "Our deep web Health Search offers a search experience unlike any other," said Faure."It's the fastest, easiest way for Internet users to find in-depth, non-biased information on any health-related topic. We don't just deliver 'close' results, but results that are dead-on accurate - and hand-picked from multiple, credible medical sources from across the Web. Our technology does more than aggregate results from various content providers for medical information; we crawl deep into the websites of certain handpicked, trusted, medical websites to extract and format results in a easy to understand, and comprehensive manner."
Another appealing feature is the "second opinion" option which provides users a greater number of choices drawn from the trusted Health sources.
Vertical search might be the answer Mamma.com is looking for as they struggle against the tide of popularity enjoyed by Google, Yahoo, MSN and Ask Jeeves. Over the next twelve months, Momma expects to develop and release other vertical search engines though Faure was tightlipped on exactly how many, the subject matter (he did hint at travel), and the timing of their release. Building vertical search tools is likely a good step for the firm that labels itself the Mother of All Search Engines. By building vertical search tools, Mamma can avoid competing against the Big4 in the field of general search while offering their users tightly focused information.
Why do our friends change so much when they grow up? Remember when we were kids and didn't have to think about dealing with utility bills, mortgage instalments, taxes, rent, student loans, groceries and car payments? After passing through the awkward stage of adolescence, most of us find ourselves resigned to compromising our values in one way or another in order to get a bigger piece of whatever pie we are chasing. It happens so subtly that most of us don't even notice that we have made such compromises or that they have changed our lives. It just happens that way. Through talent, dedication, luck, and the fortunate conflux of all three at the same time, some find great wealth, influence and power when they grow up. Google officially became an adult late last summer after surviving the techno coming of age ritual known as the IPO. Now that they are all grown up, Google appears to be willing to make compromises on their beloved core mission: to make money without being evil.
Late last month, WinZip Computing Inc , the makers of one of the most popular file compression tools made an agreement with Google to bundle two well known Google applications in with downloadable versions of their WinZip software. As of last week, people downloading WinZip will also download copies of the Google Toolbar and Google's desktop search application. While users are given an opt-out option, the WinZip executable file will, by default, install and activate the toolbar and desktop search application. The odd thing is, neither application has anything to do with compressing files except perhaps to help a user find such files on the net or on their hard drives.
To be fair, Google's toolbar and desktop search applications are both very useful applications but Google's use of this method of distribution is starting to disturb many in the web community. By bundling their software in with unrelated applications, it appears Google is muscling its way onto unwitting users' hard drives, a practice that leaves long time Google watchers questioning their motivation and marketing savvy. To remain fair, Yahoo does it as well but Yahoo has no pretensions around their relationship with stuff that might be considered "evil".
The toolbar provides users instant access to a wide array of Google applications with a search query box, a pagerank meter, a pop-up blocker, an auto fill feature for online forms and a bunch of other user-defined features. It also includes the infamous Autolinks button that alters websites by adding links from Google Local, Google Maps, FedEx, UPI, Carfax or Amazon (depending on the content) when activated. The toolbar provides Google with a great deal of information about its users.
Google Desktop keeps a highly useful record of files stored on a user's computer by spidering the contents of that user's hard drive. While the spider and all results are kept on the user's computer, non-identifying information such a page visits, document views, searches and usage, are shared with Google.
Both applications are used to provide Google with deep mines of demographic data to support the development of direct contextual ad distribution, and of course, a better search experience for its loyal users.
Bundling one piece of software in with another application is not a new thing and might not be considered "evil". As a matter of fact, this is hardly the first time Google has used bundling in their marketing efforts. In exchange for Google inspiring and fostering their growth, several basic versions of the Firefox browser default to a Firefox flavoured Google homepage. As noted in Search Engine Watch , Google also bundles the toolbar and desktop with DVD creation software from InterVideo and with downloads of RealPlayer .
Bundling can also provide an avenue of distribution for smaller software developers who have created complimentary applications for the products they tag along on. Small but useful pieces of software are often distributed by attaching their executable files to the EXE's of software packages they were designed to compliment. Multiplayer online games often come with a copy of the GameSpy search application which helps gamers locate nearby or favoured servers to play on. Users of accounting programs like QuickBooks or Quicken might find third party software designed to help file taxes online or calculate local income tax rates included in the initial install. These additional applications are useful to the end-user and their inclusion is a form of business partnership that provides a valuable customer service.
Sometimes bundling is used to pay the bills. That's when bundled software can bring big time badness. A few years ago online file traders faced all sorts of problems after they installed versions of Kazaa and Bearshare infected with Gator user-tracking and marketing software. Not only did it watch and record what users did, in some cases it took over other applications. Websites wouldn't load properly, URLs would be redirected and unrelated apps would mysteriously stop working properly.
When I was in Toronto recently, while visiting my parents, I was forced to install Firefox and then cleanse my father's computer of mal-ware to access my Gmail account. An IE toolbar offered by a local Toronto radio station had malicious software bundled into it. Software designed by a company whose penchant for lawsuits is legendary prevented me from accessing Google and my Gmail account by redirecting anything with the Google URL to a spam-site search tool.
Sometimes bundling is used to control or dominate a market. Windows operating systems are the ultimate example of how bundling can be used to deliver extremely complementary applications as an all-in-one package with the goal of outright OS domination. The kneecapping of Netscape in the short browser wars of the mid-90's was accomplished by bundling Internet Explorer in with versions of Windows95. Previously, Internet Explorer was sold as stand-alone software.
Acquiring new users and maintaining user loyalty is a major piece of the overall marketing pie for every major search engine and Google is increasingly including pieces of itself with the install of other pieces of software. While working to increase Google account holders by any means possible, the practice of pushing products on users who wanted to use an unrelated product is producing PR problems. Not only does Google need to avoid being evil, it needs to avoid appearing to be evil.
These are problems that don't really need to happen. Google already allows application developers to work Google search technology into their creations through their Application Programming Interface (API) program. Yahoo also offers a similar Developer Network API . Allowing developers access to branded search technology helps build a better web and, in the context of power-giants like Google and Yahoo, is a much cleaner method of brand distribution than the piggyback method of bundling.
The Rubicon has been crossed. Even for traditionalists, there is no going back. The Internet has finally become the world's primary marketing tool, fundamentally altering corporate ad planning and spending. Momentum had been building around the online marketing sector for over three years but 2005 appears to be the year that mainstream marketers notice their universe has changed.
Over the previous three years, a very public race between Yahoo, Microsoft and Google caught the attention and imaginations of most people in the search marketing industry. Known as the Search Engine Wars, this competition has propelled innovation and invention in all aspects of search, especially in the realm of paid-search advertising. As in all races, there are going to be winners and, of course, there are going to be losers. Unlike most races however, this one does not have a fixed finish line and anyone can enter the race at any point, provided they can keep pace with the leaders. Recently, Ask Jeeves worked its way into the race and, as absurd as this might read, may actually be in a better position today than its far larger rival, Google. The same can be said of Yahoo and MSN. The race might be influenced by size and speed but in the long run, everyone knows that this is an endurance race.
Technically, the search engine landscape is sound and growing. Both Google and Yahoo recently updated their organic algorithms in the past month. Microsoft continues to tweak and improve MSN, which is expected to enter the lucrative paid-search advertising market before the end of this year. Rounding out the Big4, Ask Jeeves VP for European Products, Tony Macklin, weighed in at vnunet.com last week saying Ask's newly developed search technology will outperform Google, luring previously loyal users away.
The ideal purpose of search may be to assist Internet users in finding specific information in a chaotic ocean of documents but the business of search is entirely about paid advertising and product delivery. User loyalty is the foundation of success for the major search engines, each of which has developed, acquired or partnered with massive networks of digital advertising media. Aside from their associations with the Internet's basic navigation tools, paid search programs offer marketers a bonus their elders could only dream of; direct ad placement by user-interest or contextual delivery. Membership in these networks is not particularly exclusive with websites made by small business webmasters displaying the same paid-ads as huge corporate sites. In other words, an ad for a unique auto part supplier could be delivered to viewers who were specifically interested in that unique type of vehicle. Ads for Boston Red Sox memorabilia could be served to Beantown sports fans, without wasting valuable impressions on unimpressed Yankee fans from the New York region.
Once the feasibility of that concept became clear, advertising and investment dollars started pouring into the sector. Paid advertising produces the record-breaking revenues shown nearly every quarter by most firms in the search sector. The growth of various paid search ad delivery models gives financial analysts like Safa Rashtchy of Piper Jaffray the confidence to predict search engine revenues will surpass $23 billion a year in the next five years.
In a huge bid of confidence, AOL has transferred much of its massive advertising budget to paid search advertising through Google AdWords and Yahoo Search Marketing. After preparing a $50 million television campaign, AOL execs noticed the majority of traffic to their travel, music and other services came from organic and paid listings on other search engines.
Along with AOL's latest $50 million, literally hundreds of billions of dollars has gone into developing and sustaining the search engine landscape. As we know it today, that landscape is huge and the horizons seem limitless but in the distance, dark clouds of market realities are starting to form. Three reports were issued last week detailing three different difficulties the paid search sector will face in near future.
Searchers prefer organic The first was a research study from Penn State University presented at the ACM Conference on Electronic Commerce in Vancouver, "Examining Searcher Perceptions of and Interactions with Sponsored Results". (summary)(full report) The study followed the search experiences of 56 subjects aged 18 - 29. The subjects followed instructions leading them to perform hundreds of common queries across the major search engines.
While searching, the subjects communicated their impressions of their search experiences to the researchers. One test had subjects pretend they were going on vacation and needed to find a low-cost tennis racquet they could take with them. Another had them look for a dirt bike for sale in Pittsburgh.
After analysing their verbal impressions and click patterns, the researchers concluded that search engine users tend to trust and consequently click on organic results before paid ads more than 80% of the time. "Consumers have a bias against the links that businesses pay search engines to provide," said Jim Jansen, assistant professor in the Penn State School of Information Sciences and Technology (IST).
In sharp contrast, the study showed only 6% of searchers clicked on the paid or sponsored results first. "What our study shows is that even when the returned results are exactly the same, people still view what they thought of as the organic results as better. The quality of the sponsored links isn't the issue; it's the placement of the results", Jansen added.
Keyword bid-prices dropping The second report came from Fathom Online's Keyword Price Index (KPI) showing the first decline in keyword bid prices since August 2004. The KPI tracks the bid costs of 500 generic keywords across the major paid search engines. In April, bid prices declined 31 cents on average, leading to a short sell frenzy of search stocks on Wall St. Google, which looked like it would peak $300 a share has fallen to $282 today. Yahoo took a minor hit of 88 cents per share but gained most of it back by today.
Declining keyword bid prices are likely natural phenomena as the market matures to correct itself after months of inflated bids. It might also have something to do with a slowing housing market as the biggest decline was seen in the mortgage and home finance sector.
Even with rational reasons behind the falling click costs, there is worry that investors will see this as a long-term trend that could threaten the values of their shares. Google investors seem particularly worried, especially when analysts and observers start speculating on the burst of a bubble.
Do all bubbles burst? It has only been nine months since Google released its IPO at $85/share. Two days ago the stock price peaked at just under $300/share and is trading around $282/share today. Its rivals, Yahoo, MSN and Ask are all trading in the $25 - 36 range. With a decline in bid prices on paid-ads that are being ignored by search engine users, Google's financial stability appears based on a shifting foundation.
In a rather biting piece in last Friday's Guardian Unlimited, UK tech writer Nils Pratley asks, "Who in their right mind would buy shares in a company at a price equivalent to 25 times its annual sales?" Google, which is operating in an increasingly competitive environment, might have a very difficult time sustaining shareholder expectations while continuing to expand operations. Pratley looks at the value shareholders have vested in Google and wonders exactly where the floor will be found. He concludes his piece with a lecture Sun Microsystems CEO Scott McNealy gave investors two years after the dot-com crash.
"Anybody thinking of buying Google at 25 times should listen to Sun chief executive Scott McNealy's post-crash analysis of the stupidity of his own shareholders. In 2002, he said at an investor conference: "At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company.
"That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate.
"Now, having done that, would any of you like to buy my stock at $64? Do you realise how ridiculous those basic assumptions are? You don't need any transparency. You don't need any footnotes. What were you thinking?"
Indeed. Five years is an awfully long time on the Internet. It has been five long and very successful years since the dot-com crash of 2000 and the enthusiasm shown for Google stock is reminiscent of the bitter sweet love affair investors had with tech stocks in the late 1990s. The value of other tech stocks seems to conform to the perceived value of their respective firms. What are investors thinking when they are willing to place their educated bets at prices equivalent to 25X the value of the entire firm? Some believe they are simply seeing gold in Google while others think investors are concentrating on one mighty tree in a huge and growing forest.
Google has a terrible problem faced by many businesses. Even though they are the most popular search engine and have the largest paid advertising distribution network, approximately 95% of their revenues come from paid-search advertising. In contrast, paid-search accounted for less than half of Yahoo's annual income until revenues from its acquisition of Overture increased 235% in 2004. MSN is subsidized by Microsoft and is just entering the paid advertising field and newcomer, Ask Jeeves is hardly reliant on paid search advertising and just starting to roll out its own contextual distribution network based on its association with Barry Diller's Interactive Corporation and its recent absorption of the Excite network.
Finding other forms of income will be essential for Google if it hopes to continue moving forward and supporting such a high share value. Realizing that income might be more difficult for Google than for its rivals as they have much wider foundations to build on. The business of search is a battleground with multiple fronts. While Google is the current leader on the most profitable front, paid-search, it might not be able to retain that position indefinitely. Hopefully both Google and its investors are thinking eight quarters ahead instead of only focusing on tomorrow's bottom line.
Two months ago, Google released a 63-point patent document outlining how it examines historical data associated with websites and documents in its index. Since that time, we have witnessed changes in the algorithm which have become known as the Bourbon Update. StepForth has written a short whitepaper which studies that document and gives a short overview of the patent and how its contents may affect the Google organic search engine. It is important to note, this document does not cover subsequent announcements from Google such as Google Sitemaps. The following are a few paragraphs from the whitepaper, "Historic Data and Google Ranking: An analysis of the March 30th, 2005 Patent"
Google's Growth and Reasons for Change Google is no longer a search engine in the finest sense of the word. As a search tool, Google is a multi-media information retrieval machine that is capable of assumption and suggestion. Growing misuse of simple optimization and linking techniques combined with advances in both user and Internet based technologies are forcing change at Google. StepForth's most recent whitepaper examines the general search engine rankings generated by Google with a particular emphasis on ideas, concepts and sorting techniques noted in the March 31st 2005 patent application "Information retrieval based on historical data" filed by Google engineers, Anurag Acharya, Matt Cutts, Dean Jeffrey, Paul Haahr, Monika Henzinger, Urs Hoelzle, Steve Lawrence, Karl Pfleger, Olcan Sercinoglu, and Simon Tong.
Google is now seven years old. Each year, Google grows a bit bigger. Big, in the context of Google, is bigger than any other public search resource in the world. Google's stated mission is "to organize the world's information and make it universally accessible and useful." To do that, it not only needs to gather the world's information, it needs to sort it and return relevant results to its users based on words or phrases entered. Therein lies the
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