Category: SEO Book

It has been a while since Google has had a major algorithm update.

They recently announced one which began on the 12th of March.

This week, we released a broad core algorithm update, as we do several times per year. Our guidance about such updates remains as we’ve covered before. Please see these tweets for more about that:https://t.co/uPlEdSLHoXhttps://t.co/tmfQkhdjPL— Google SearchLiaison (@searchliaison) March 13, 2019

What changed?

It appears multiple things did.

When Google rolled out the original version of Penguin on April 24, 2012 (primarily focused on link spam) they also rolled out an update to an on-page spam classifier for misdirection.

And, over time, it was quite common for Panda & Penguin updates to be sandwiched together.

If you were Google & had the ability to look under the hood to see why things changed, you would probably want to obfuscate any major update by changing multiple things at once to make reverse engineering the change much harder.

Anyone who operates a single website (& lacks the ability to look under the hood) will have almost no clue about what changed or how to adjust with the algorithms.

In the most recent algorithm update some sites which were penalized in prior “quality” updates have recovered.

Though many of those recoveries are only partial.

Many SEO blogs will publish articles about how they cracked the code on the latest update by publishing charts like the first one without publishing that second chart showing the broader context.

The first penalty any website receives might be the first of a series of penalties.

If Google smokes your site & it does not cause a PR incident & nobody really cares that you are gone, then there is a very good chance things will go from bad to worse to worser to worsterest, technically speaking.

“In this age, in this country, public sentiment is everything. With it, nothing can fail; against it, nothing can succeed. Whoever molds public sentiment goes deeper than he who enacts statutes, or pronounces judicial decisions.” – Abraham Lincoln

Absent effort & investment to evolve FASTER than the broader web, sites which are hit with one penalty will often further accumulate other penalties. It is like compound interest working in reverse – a pile of algorithmic debt which must be dug out of before the bleeding stops.

Further, many recoveries may be nothing more than a fleeting invitation to false hope. To pour more resources into a site that is struggling in an apparent death loop.

The above site which had its first positive algorithmic response in a couple years achieved that in part by heavily de-monetizing. After the algorithm updates already demonetized the website over 90%, what harm was there in removing 90% of what remained to see how it would react? So now it will get more traffic (at least for a while) but then what exactly is the traffic worth to a site that has no revenue engine tied to it?

That is ultimately the hard part. Obtaining a stable stream of traffic while monetizing at a decent yield, without the monetizing efforts leading to the traffic disappearing.

A buddy who owns the above site was working on link cleanup & content improvement on & off for about a half year with no results. Each month was a little worse than the prior month. It was only after I told him to remove the aggressive ads a few months back that he likely had any chance of seeing any sort of traffic recovery. Now he at least has a pulse of traffic & can look into lighter touch means of monetization.

If a site is consistently penalized then the problem might not be an algorithmic false positive, but rather the business model of the site.

The more something looks like eHow the more fickle Google’s algorithmic with receive it.

Google does not like websites that sit at the end of the value chain & extract profits without having to bear far greater risk & expense earlier into the cycle.

Thin rewrites, largely speaking, don’t add value to the ecosystem. Doorway pages don’t either. And something that was propped up by a bunch of keyword-rich low-quality links is (in most cases) probably genuinely lacking in some other aspect.

Generally speaking, Google would like themselves to be the entity at the end of the value chain extracting excess profits from markets.

RIP Quora!!! Q&A On Google – Showing Questions That Need Answers In Search https://t.co/mejXUDwGhT pic.twitter.com/8Cv1iKjDh2— John Shehata (@JShehata) March 18, 2019

This is the purpose of the knowledge graph & featured snippets. To allow the results to answer the most basic queries without third party publishers getting anything. The knowledge graph serve as a floating vertical that eat an increasing share of the value chain & force publishers to move higher up the funnel & publish more differentiated content.

As Google adds features to the search results (flight price trends, a hotel booking service on the day AirBNB announced they acquired HotelTonight, ecommerce product purchase on Google, shoppable image ads just ahead of the Pinterest IPO, etc.) it forces other players in the value chain to consolidate (Expedia owns Orbitz, Travelocity, Hotwire & a bunch of other sites) or add greater value to remain a differentiated & sought after destination (travel review site TripAdvisor was crushed by the shift to mobile & the inability to monetize mobile traffic, so they eventually had to shift away from being exclusively a reviews site to offer event & hotel booking features to remain relevant).

It is never easy changing a successful & profitable business model, but it is even harder to intentionally reduce revenues further or spend aggressively to improve quality AFTER income has fallen 50% or more.

Some people do the opposite & make up for a revenue shortfall by publishing more lower end content at an ever faster rate and/or increasing ad load. Either of which typically makes their user engagement metrics worse while making their site less differentiated & more likely to receive additional bonus penalties to drive traffic even lower.

In some ways I think the ability for a site to survive & remain though a penalty is itself a quality signal for Google.

Some sites which are overly reliant on search & have no external sources of traffic are ultimately sites which tried to behave too similarly to the monopoly that ultimately displaced them. And over time the tech monopolies are growing more powerful as the ecosystem around them burns down:

If you had to choose a date for when the internet died, it would be in the year 2014. Before then, traffic to websites came from many sources, and the web was a lively ecosystem. But beginning in 2014, more than half of all traffic began coming from just two sources: Facebook and Google. Today, over 70 percent of traffic is dominated by those two platforms.

Businesses which have sustainable profit margins & slack (in terms of management time & resources to deploy) can better cope with algorithmic changes & change with the market.

Over the past half decade or so there have been multiple changes that drastically shifted the online publishing landscape:

• the shift to mobile, which both offers publishers lower ad yields while making the central ad networks more ad heavy in a way that reduces traffic to third party sites
• the rise of the knowledge graph & featured snippets which often mean publishers remain uncompensated for their work
• higher ad loads which also lower organic reach (on both search & social channels)
• the rise of programmatic advertising, which further gutted display ad CPMs
• the rise of ad blockers
• increasing algorithmic uncertainty & a higher barrier to entry

Each one of the above could take a double digit percent out of a site’s revenues, particularly if a site was reliant on display ads. Add them together and a website which was not even algorithmically penalized could still see a 60%+ decline in revenues. Mix in a penalty and that decline can chop a zero or two off the total revenues.

Businesses with lower margins can try to offset declines with increased ad spending, but that only works if you are not in a market with 2 & 20 VC fueled competition:

Startups spend almost 40 cents of every VC dollar on Google, Facebook, and Amazon. We don’t necessarily know which channels they will choose or the particularities of how they will spend money on user acquisition, but we do know more or less what’s going to happen. Advertising spend in tech has become an arms race: fresh tactics go stale in months, and customer acquisition costs keep rising. In a world where only one company thinks this way, or where one business is executing at a level above everyone else – like Facebook in its time – this tactic is extremely effective. However, when everyone is acting this way, the industry collectively becomes an accelerating treadmill. Ad impressions and click-throughs get bid up to outrageous prices by startups flush with venture money, and prospective users demand more and more subsidized products to gain their initial attention. The dynamics we’ve entered is, in many ways, creating a dangerous, high stakes Ponzi scheme.

And sometimes the platform claws back a second or third bite of the apple. Amazon.com charges merchants for fulfillment, warehousing, transaction based fees, etc. And they’ve pushed hard into launching hundreds of private label brands which pollute the interface & force brands to buy ads even on their own branded keyword terms.

They’ve recently jumped the shark by adding a bonus feature where even when a brand paid Amazon to send traffic to their listing, Amazon would insert a spam popover offering a cheaper private label branded product:

Amazon.com tested a pop-up feature on its app that in some instances pitched its private-label goods on rivals’ product pages, an experiment that shows the e-commerce giant’s aggressiveness in hawking lower-priced products including its own house brands. The recent experiment, conducted in Amazon’s mobile app, went a step further than the display ads that commonly appear within search results and product pages. This test pushed pop-up windows that took over much of a product page, forcing customers to either click through to the lower-cost Amazon products or dismiss them before continuing to shop. … When a customer using Amazon’s mobile app searched for “AAA batteries,” for example, the first link was a sponsored listing from Energizer Holdings Inc. After clicking on the listing, a pop-up window appeared, offering less expensive AmazonBasics AAA batteries.”

Buying those Amazon ads was quite literally subsidizing a direct competitor pushing you into irrelevance.

And while Amazon is destroying brand equity, AWS is doing investor relations matchmaking for startups. Anything to keep the current bubble going ahead of the Uber IPO that will likely mark the top in the stock market.

Some thoughts on Silicon Valley’s endgame. We have long said the biggest risk to the bull market is an Uber IPO. That is now upon us.— Jawad Mian (@jsmian) March 16, 2019

As the market caps of big tech companies climb they need to be more predatious to grow into the valuations & retain employees with stock options at an ever-increasing strike price.

They’ve created bubbles in their own backyards where each raise requires another. Teachers either drive hours to work or live in houses subsidized by loans from the tech monopolies that get a piece of the upside (provided they can keep their own bubbles inflated).

“It is an uncommon arrangement — employer as landlord — that is starting to catch on elsewhere as school employees say they cannot afford to live comfortably in regions awash in tech dollars. … Holly Gonzalez, 34, a kindergarten teacher in East San Jose, and her husband, Daniel, a school district I.T. specialist, were able to buy a three-bedroom apartment for $610,000 this summer with help from their parents and from Landed. When they sell the home, they will owe Landed 25 percent of any gain in its value. The company is financed partly by the Chan Zuckerberg Initiative, Mark Zuckerberg’s charitable arm.”

The above sort of dynamics have some claiming peak California:

The cycle further benefits from the Alchian-Allen effect: agglomerating industries have higher productivity, which raises the cost of living and prices out other industries, raising concentration over time. … Since startups raise the variance within whatever industry they’re started in, the natural constituency for them is someone who doesn’t have capital deployed in the industry. If you’re an asset owner, you want low volatility. … Historically, startups have created a constant supply of volatility for tech companies; the next generation is always cannibalizing the previous one. So chip companies in the 1970s created the PC companies of the 80s, but PC companies sourced cheaper and cheaper chips, commoditizing the product until Intel managed to fight back. Meanwhile, the OS turned PCs into a commodity, then search engines and social media turned the OS into a commodity, and presumably this process will continue indefinitely. … As long as higher rents raise the cost of starting a pre-revenue company, fewer people will join them, so more people will join established companies, where they’ll earn market salaries and continue to push up rents. And one of the things they’ll do there is optimize ad loads, which places another tax on startups. More dangerously, this is an incremental tax on growth rather than a fixed tax on headcount, so it puts pressure on out-year valuations, not just upfront cash flow.

If you live hundreds of miles away the tech companies may have no impact on your rental or purchase price, but you can’t really control the algorithms or the ecosystem.

All you can really control is your mindset & ensuring you have optionality baked into your business model.

• If you are debt-levered you have little to no optionality. Savings give you optionality. Savings allow you to run at a loss for a period of time while also investing in improving your site and perhaps having a few other sites in other markets.
• If you operate a single website that is heavily reliant on a third party for distribution then you have little to no optionality. If you have multiple projects that enables you to shift your attention toward working on whatever is going up and to the right while letting anything that is failing pass time without becoming overly reliant on something you can’t change. This is why it often makes sense for a brand merchant to operate their own ecommerce website even if 90% of their sales come from Amazon. It gives you optionality should the tech monopoly become abusive or otherwise harm you (even if the intent was benign rather than outright misanthropic).

As the update ensues Google will collect more data with how users interact with the result set & determine how to weight different signals, along with re-scoring sites that recovered based on the new engagement data.

Recently a Bing engineer named Frédéric Dubut described how they score relevancy signals used in updates

As early as 2005, we used neural networks to power our search engine and you can still find rare pictures of Satya Nadella, VP of Search and Advertising at the time, showcasing our web ranking advances. … The “training” process of a machine learning model is generally iterative (and all automated). At each step, the model is tweaking the weight of each feature in the direction where it expects to decrease the error the most. After each step, the algorithm remeasures the rating of all the SERPs (based on the known URL/query pair ratings) to evaluate how it’s doing. Rinse and repeat.

That same process is ongoing with Google now & in the coming weeks there’ll be the next phase of the current update.

So far it looks like some quality-based re-scoring was done & some sites which were overly reliant on anchor text got clipped. On the back end of the update there’ll be another quality-based re-scoring, but the sites that were hit for excessive manipulation of anchor text via link building efforts will likely remain penalized for a good chunk of time.

Update: It appears a major reverberation of this update occurred on April 7th. From early analysis, Google is mixing in showing results for related midtail concepts on a core industry search term & they are also in some cases pushing more aggressively on doing internal site-level searches to rank a more relevant internal page for a query where they homepage might have ranked in the past.

It has been a while since Google has had a major algorithm update.

They recently announced one which began on the 12th of March.

This week, we released a broad core algorithm update, as we do several times per year. Our guidance about such updates remains as we’ve covered before. Please see these tweets for more about that:https://t.co/uPlEdSLHoXhttps://t.co/tmfQkhdjPL— Google SearchLiaison (@searchliaison) March 13, 2019

What changed?

It appears multiple things did.

When Google rolled out the original version of Penguin on April 24, 2012 (primarily focused on link spam) they also rolled out an update to an on-page spam classifier for misdirection.

And, over time, it was quite common for Panda & Penguin updates to be sandwiched together.

If you were Google & had the ability to look under the hood to see why things changed, you would probably want to obfuscate any major update by changing multiple things at once to make reverse engineering the change much harder.

Anyone who operates a single website (& lacks the ability to look under the hood) will have almost no clue about what changed or how to adjust with the algorithms.

In the most recent algorithm update some sites which were penalized in prior “quality” updates have recovered.

Though many of those recoveries are only partial.

Many SEO blogs will publish articles about how they cracked the code on the latest update by publishing charts like the first one without publishing that second chart showing the broader context.

The first penalty any website receives might be the first of a series of penalties.

If Google smokes your site & it does not cause a PR incident & nobody really cares that you are gone, then there is a very good chance things will go from bad to worse to worser to worsterest, technically speaking.

“In this age, in this country, public sentiment is everything. With it, nothing can fail; against it, nothing can succeed. Whoever molds public sentiment goes deeper than he who enacts statutes, or pronounces judicial decisions.” – Abraham Lincoln

Absent effort & investment to evolve FASTER than the broader web, sites which are hit with one penalty will often further accumulate other penalties. It is like compound interest working in reverse – a pile of algorithmic debt which must be dug out of before the bleeding stops.

Further, many recoveries may be nothing more than a fleeting invitation to false hope. To pour more resources into a site that is struggling in an apparent death loop.

The above site which had its first positive algorithmic response in a couple years achieved that in part by heavily de-monetizing. After the algorithm updates already demonetized the website over 90%, what harm was there in removing 90% of what remained to see how it would react? So now it will get more traffic (at least for a while) but then what exactly is the traffic worth to a site that has no revenue engine tied to it?

That is ultimately the hard part. Obtaining a stable stream of traffic while monetizing at a decent yield, without the monetizing efforts leading to the traffic disappearing.

A buddy who owns the above site was working on link cleanup & content improvement on & off for about a half year with no results. Each month was a little worse than the prior month. It was only after I told him to remove the aggressive ads a few months back that he likely had any chance of seeing any sort of traffic recovery. Now he at least has a pulse of traffic & can look into lighter touch means of monetization.

If a site is consistently penalized then the problem might not be an algorithmic false positive, but rather the business model of the site.

The more something looks like eHow the more fickle Google’s algorithmic with receive it.

Google does not like websites that sit at the end of the value chain & extract profits without having to bear far greater risk & expense earlier into the cycle.

Thin rewrites, largely speaking, don’t add value to the ecosystem. Doorway pages don’t either. And something that was propped up by a bunch of keyword-rich low-quality links is (in most cases) probably genuinely lacking in some other aspect.

Generally speaking, Google would like themselves to be the entity at the end of the value chain extracting excess profits from markets.

This is the purpose of the knowledge graph & featured snippets. To allow the results to answer the most basic queries without third party publishers getting anything. The knowledge graph serve as a floating vertical that eat an increasing share of the value chain & force publishers to move higher up the funnel & publish more differentiated content.

As Google adds features to the search results (flight price trends, a hotel booking service on the day AirBNB announced they acquired HotelTonight, ecommerce product purchase on Google, shoppable image ads just ahead of the Pinterest IPO, etc.) it forces other players in the value chain to consolidate (Expedia owns Orbitz, Travelocity, Hotwire & a bunch of other sites) or add greater value to remain a differentiated & sought after destination (travel review site TripAdvisor was crushed by the shift to mobile & the inability to monetize mobile traffic, so they eventually had to shift away from being exclusively a reviews site to offer event & hotel booking features to remain relevant).

It is never easy changing a successful & profitable business model, but it is even harder to intentionally reduce revenues further or spend aggressively to improve quality AFTER income has fallen 50% or more.

Some people do the opposite & make up for a revenue shortfall by publishing more lower end content at an ever faster rate and/or increasing ad load. Either of which typically makes their user engagement metrics worse while making their site less differentiated & more likely to receive additional bonus penalties to drive traffic even lower.

In some ways I think the ability for a site to survive & remain though a penalty is itself a quality signal for Google.

Some sites which are overly reliant on search & have no external sources of traffic are ultimately sites which tried to behave too similarly to the monopoly that ultimately displaced them. And over time the tech monopolies are growing more powerful as the ecosystem around them burns down:

If you had to choose a date for when the internet died, it would be in the year 2014. Before then, traffic to websites came from many sources, and the web was a lively ecosystem. But beginning in 2014, more than half of all traffic began coming from just two sources: Facebook and Google. Today, over 70 percent of traffic is dominated by those two platforms.

Businesses which have sustainable profit margins & slack (in terms of management time & resources to deploy) can better cope with algorithmic changes & change with the market.

Over the past half decade or so there have been multiple changes that drastically shifted the online publishing landscape:

• the shift to mobile, which both offers publishers lower ad yields while making the central ad networks more ad heavy in a way that reduces traffic to third party sites
• the rise of the knowledge graph & featured snippets which often mean publishers remain uncompensated for their work
• higher ad loads which also lower organic reach (on both search & social channels)
• the rise of programmatic advertising, which further gutted display ad CPMs
• the rise of ad blockers
• increasing algorithmic uncertainty & a higher barrier to entry

Each one of the above could take a double digit percent out of a site’s revenues, particularly if a site was reliant on display ads. Add them together and a website which was not even algorithmically penalized could still see a 60%+ decline in revenues. Mix in a penalty and that decline can chop a zero or two off the total revenues.

Businesses with lower margins can try to offset declines with increased ad spending, but that only works if you are not in a market with 2 & 20 VC fueled competition:

Startups spend almost 40 cents of every VC dollar on Google, Facebook, and Amazon. We don’t necessarily know which channels they will choose or the particularities of how they will spend money on user acquisition, but we do know more or less what’s going to happen. Advertising spend in tech has become an arms race: fresh tactics go stale in months, and customer acquisition costs keep rising. In a world where only one company thinks this way, or where one business is executing at a level above everyone else – like Facebook in its time – this tactic is extremely effective. However, when everyone is acting this way, the industry collectively becomes an accelerating treadmill. Ad impressions and click-throughs get bid up to outrageous prices by startups flush with venture money, and prospective users demand more and more subsidized products to gain their initial attention. The dynamics we’ve entered is, in many ways, creating a dangerous, high stakes Ponzi scheme.

And sometimes the platform claws back a second or third bite of the apple. Amazon.com charges merchants for fulfillment, warehousing, transaction based fees, etc. And they’ve pushed hard into launching hundreds of private label brands which pollute the interface & force brands to buy ads even on their own branded keyword terms.

They’ve recently jumped the shark by adding a bonus feature where even when a brand paid Amazon to send traffic to their listing, Amazon would insert a spam popover offering a cheaper private label branded product:

Amazon.com tested a pop-up feature on its app that in some instances pitched its private-label goods on rivals’ product pages, an experiment that shows the e-commerce giant’s aggressiveness in hawking lower-priced products including its own house brands. The recent experiment, conducted in Amazon’s mobile app, went a step further than the display ads that commonly appear within search results and product pages. This test pushed pop-up windows that took over much of a product page, forcing customers to either click through to the lower-cost Amazon products or dismiss them before continuing to shop. … When a customer using Amazon’s mobile app searched for “AAA batteries,” for example, the first link was a sponsored listing from Energizer Holdings Inc. After clicking on the listing, a pop-up window appeared, offering less expensive AmazonBasics AAA batteries.”

Buying those Amazon ads was quite literally subsidizing a direct competitor pushing you into irrelevance.

And while Amazon is destroying brand equity, AWS is doing investor relations matchmaking for startups. Anything to keep the current bubble going ahead of the Uber IPO that will likely mark the top in the stock market.

Some thoughts on Silicon Valley’s endgame. We have long said the biggest risk to the bull market is an Uber IPO. That is now upon us.— Jawad Mian (@jsmian) March 16, 2019

As the market caps of big tech companies climb they need to be more predatious to grow into the valuations & retain employees with stock options at an ever-increasing strike price.

They’ve created bubbles in their own backyards where each raise requires another. Teachers either drive hours to work or live in houses subsidized by loans from the tech monopolies that get a piece of the upside (provided they can keep their own bubbles inflated).

“It is an uncommon arrangement — employer as landlord — that is starting to catch on elsewhere as school employees say they cannot afford to live comfortably in regions awash in tech dollars. … Holly Gonzalez, 34, a kindergarten teacher in East San Jose, and her husband, Daniel, a school district I.T. specialist, were able to buy a three-bedroom apartment for $610,000 this summer with help from their parents and from Landed. When they sell the home, they will owe Landed 25 percent of any gain in its value. The company is financed partly by the Chan Zuckerberg Initiative, Mark Zuckerberg’s charitable arm.”

The above sort of dynamics have some claiming peak California:

The cycle further benefits from the Alchian-Allen effect: agglomerating industries have higher productivity, which raises the cost of living and prices out other industries, raising concentration over time. … Since startups raise the variance within whatever industry they’re started in, the natural constituency for them is someone who doesn’t have capital deployed in the industry. If you’re an asset owner, you want low volatility. … Historically, startups have created a constant supply of volatility for tech companies; the next generation is always cannibalizing the previous one. So chip companies in the 1970s created the PC companies of the 80s, but PC companies sourced cheaper and cheaper chips, commoditizing the product until Intel managed to fight back. Meanwhile, the OS turned PCs into a commodity, then search engines and social media turned the OS into a commodity, and presumably this process will continue indefinitely. … As long as higher rents raise the cost of starting a pre-revenue company, fewer people will join them, so more people will join established companies, where they’ll earn market salaries and continue to push up rents. And one of the things they’ll do there is optimize ad loads, which places another tax on startups. More dangerously, this is an incremental tax on growth rather than a fixed tax on headcount, so it puts pressure on out-year valuations, not just upfront cash flow.

If you live hundreds of miles away the tech companies may have no impact on your rental or purchase price, but you can’t really control the algorithms or the ecosystem.

All you can really control is your mindset & ensuring you have optionality baked into your business model.

• If you are debt-levered you have little to no optionality. Savings give you optionality. Savings allow you to run at a loss for a period of time while also investing in improving your site and perhaps having a few other sites in other markets.
• If you operate a single website that is heavily reliant on a third party for distribution then you have little to no optionality. If you have multiple projects that enables you to shift your attention toward working on whatever is going up and to the right while letting anything that is failing pass time without becoming overly reliant on something you can’t change. This is why it often makes sense for a brand merchant to operate their own ecommerce website even if 90% of their sales come from Amazon. It gives you optionality should the tech monopoly become abusive or otherwise harm you (even if the intent was rather than outright misanthropic).

As the update ensues Google will collect more data with how users interact with the result set & determine how to weight different signals, along with re-scoring sites that recovered based on the new engagement data.

Recently a Bing engineer named Frédéric Dubut described how they score relevancy signals used in updates

As early as 2005, we used neural networks to power our search engine and you can still find rare pictures of Satya Nadella, VP of Search and Advertising at the time, showcasing our web ranking advances. … The “training” process of a machine learning model is generally iterative (and all automated). At each step, the model is tweaking the weight of each feature in the direction where it expects to decrease the error the most. After each step, the algorithm remeasures the rating of all the SERPs (based on the known URL/query pair ratings) to evaluate how it’s doing. Rinse and repeat.

That same process is ongoing with Google now & in the coming weeks there’ll be the next phase of the current update.

So far it looks like some quality-based re-scoring was done & some sites which were overly reliant on anchor text got clipped. On the back end of the update there’ll be another quality-based re-scoring, but the sites that were hit for excessive manipulation of anchor text via link building efforts will likely remain penalized for a good chunk of time.

Google’s original breakthrough in search was placing weight on links & using them to approximate the behavior of web users.

The abstract of
The PageRank Citation Ranking: Bringing Order to the Web reads

The importance of a Web page is an inherently subjective matter, which depends on the readers interests, knowledge and attitudes. But there is still much that can be said objectively about the relative importance of Web pages. This paper describes PageRank, a method for rating Web pages objectively and mechanically, effectively measuring the human interest and attention devoted to them. We compare PageRank to an idealized random Web surfer. We show how to efficiently compute PageRank for large numbers of pages. And, we show how to apply PageRank to search and to user navigation.

Back when I got started in the search game if you wanted to rank better you simply threw more links at whatever you wanted to rank & used the anchor text you wanted to rank for. A friend (who will remain nameless here!) used to rank websites for one-word search queries in major industries without even looking at them. :D

Suffice it to say, as more people read about PageRank & learned the influence of anchor text, Google had to advance their algorithms in order to counteract efforts to manipulate them.

Over the years as Google has grown more dominant they have been able to create many other signals. Some signals might be easy to understand & explain, while signals that approximate abstract concepts (like brand) might be a bit more convoluted to understand or attempt to explain.

Google owns the most widely used web browser (Chrome) & the most popular mobile operating system (Android). Owning those gives Google unique insights to where they do not need to place as much weight on a links-driven approximation of a random web user. They can see what users actually do & model their algorithms based on that.

Google considers the user experience an important part of their ranking algorithms. That was a big part of the heavy push for making mobile responsive web designs.

On your money or your life topics Google considers the experience so important they have an acronym covering the categories (YMYL) and place greater emphasis on the reliability of the user experience.

Nobody wants to die from a junk piece of medical advice or a matching service which invites predators into their homes.

The Wall Street Journal publishes original reporting which is so influential they almost act as the missing regulator in many instances.

Last Friday the WSJ covered the business practices of Care.com, a company which counts Alphabet’s Capital G as its biggest shareholder.

Behind Care.com’s appeal is a pledge to “help families make informed hiring decisions” about caregivers, as it has said on its website. Still, Care.com largely leaves it to families to figure out whether the caregivers it lists are trustworthy. … In about 9 instances over the past six years, caregivers in the U.S. who had police records were listed on Care.com and later were accused of committing crimes while caring for customers’ children or elderly relatives … Alleged crimes included theft, child abuse, sexual assault and murder. The Journal also found hundreds of instances in which day-care centers listed on Care.com as state-licensed didn’t appear to be. … Care.com states on listings that it doesn’t verify licenses, in small gray type at the bottom … A spokeswoman said that Care.com, like other companies, adds listings found in “publicly available data,” and that most day-care centers on its site didn’t pay for their listings. She said in the next few years Care.com will begin a program in which it vets day-care centers.

By Monday Care.com’s stock was sliding, which led to prompt corrective actions:

Previously the company warned users in small grey type at the bottom of a day-care center listing that it didn’t verify credentials or licensing information. Care.com said Monday it “has made more prominent” that notice.

To this day, Care.com’s homepage states…

“Care.com does not employ any care provider or care seeker nor is it responsible for the conduct of any care provider or care seeker. … The information contained in member profiles, job posts and applications are supplied by care providers and care seekers themselves and is not information generated or verified by Care.com.”

…in an ever so slightly darker shade of gray.

So far it appears to have worked for them.

What’s your favorite color?

Google’s original breakthrough in search was placing weight on links & using them to approximate the behavior of web users.

The abstract of
The PageRank Citation Ranking: Bringing Order to the Web reads

The importance of a Web page is an inherently subjective matter, which depends on the readers interests, knowledge and attitudes. But there is still much that can be said objectively about the relative importance of Web pages. This paper describes PageRank, a method for rating Web pages objectively and mechanically, effectively measuring the human interest and attention devoted to them. We compare PageRank to an idealized random Web surfer. We show how to efficiently compute PageRank for large numbers of pages. And, we show how to apply PageRank to search and to user navigation.

Back when I got started in the search game if you wanted to rank better you simply threw more links at whatever you wanted to rank & used the anchor text you wanted to rank for. A friend (who will remain nameless here!) used to rank websites for one-word search queries in major industries without even looking at them. :D

Suffice it to say, as more people read about PageRank & learned the influence of anchor text, Google had to advance their algorithms in order to counteract efforts to manipulate them.

Over the years as Google has grown more dominant they have been able to create many other signals. Some signals might be easy to understand & explain, while signals that approximate abstract concepts (like brand) might be a bit more convoluted to understand or attempt to explain.

Google owns the most widely used web browser (Chrome) & the most popular mobile operating system (Android). Owning those gives Google unique insights to where they do not need to place as much weight on a links-driven approximation of a random web user. They can see what users actually do & model their algorithms based on that.

Google considers the user experience an important part of their ranking algorithms. That was a big part of the heavy push for making mobile responsive web designs.

On your money or your life topics Google considers the experience so important they have an acronym covering the categories (YMYL) and place greater emphasis on the reliability of the user experience.

Nobody wants to die from a junk piece of medical advice or a matching service which invites predators into their homes.

The Wall Street Journal publishes original reporting which is so influential they almost act as the missing regulator in many instances.

Last Friday the WSJ covered the business practices of Care.com, a company which counts Alphabet’s Capital G as its biggest shareholder.

Behind Care.com’s appeal is a pledge to “help families make informed hiring decisions” about caregivers, as it has said on its website. Still, Care.com largely leaves it to families to figure out whether the caregivers it lists are trustworthy. … In about 9 instances over the past six years, caregivers in the U.S. who had police records were listed on Care.com and later were accused of committing crimes while caring for customers’ children or elderly relatives … Alleged crimes included theft, child abuse, sexual assault and murder. The Journal also found hundreds of instances in which day-care centers listed on Care.com as state-licensed didn’t appear to be. … Care.com states on listings that it doesn’t verify licenses, in small gray type at the bottom … A spokeswoman said that Care.com, like other companies, adds listings found in “publicly available data,” and that most day-care centers on its site didn’t pay for their listings. She said in the next few years Care.com will begin a program in which it vets day-care centers.

By Monday Care.com’s stock was sliding, which led to prompt corrective actions:

Previously the company warned users in small grey type at the bottom of a day-care center listing that it didn’t verify credentials or licensing information. Care.com said Monday it “has made more prominent” that notice.

To this day, Care.com’s homepage states…

“Care.com does not employ any care provider or care seeker nor is it responsible for the conduct of any care provider or care seeker. … The information contained in member profiles, job posts and applications are supplied by care providers and care seekers themselves and is not information generated or verified by Care.com.”

…in an ever so slightly darker shade of gray.

So far it appears to have worked for them.

What’s your favorite color?

Probably the single best video to watch to understand the power of Google & Facebook (or even most of the major problems across society) is this following video about pleasure versus happiness.

In constantly seeking pleasure we forego happiness.

The “feed” based central aggregation networks are just like slot machines in your pocket: variable reward circuitry which self-optimizes around exploiting your flaws to eat as much attention as possible.

The above is not an accident. It is, rather, as intended:

“That means that we needed to sort of give you a little dopamine hit every once in a while because someone liked or commented on a photo or a post or whatever … It’s a social validation feedback loop … You’re exploiting a vulnerability in human psychology … [The inventors] understood this, consciously, and we did it anyway.”

• Happy? Good! Share posed photos to make your friends feel their lives are worse than your life is.
• Outraged? Good! Click an ad.
• Hopeless? Good. There is a product which can deliver you pleasure…if only you can…click an ad.

Using machine learning to drive rankings is ultimately an exercise in confirmation bias:

For “Should abortion be legal?” Google cited a South African news site saying, “It is not the place of government to legislate against woman’s choices.”

When asked, “Should abortion be illegal?” it promoted an answer from obscure clickbait site listland.com stating, “Abortion is murder.”

Excellent work Google in using your featured snippets to help make the world more absolutist, polarized & toxic.

The central network operators not only attempt to manipulate people at the emotional level, but the layout of the interface also sets default user patterns.

Most users tend to focus their attention on the left side of the page: “if we were to slice a maximized page down the middle, 80% of the fixations fell on the left half of the screen (even more than our previous finding of 69%). The remaining 20% of fixations were on the right half of the screen.”

This behavior is even more prevalent on search results pages: “On SERPs, almost all fixations (94%) fell on the left side of the page, and 60% those fixations can be isolated to the leftmost 400px.”

On mobile, obviously, the attention is focused on what is above the fold. That which is below the fold sort of doesn’t even exist for a large subset of the population.

Outside of a few central monopoly attention merchant players, the ad-based web is dying.

Mashable has raised about $46 million in VC funding over the past 4 years. And they just sold for about $50 million.

Breaking even is about as good as it gets in a web controlled by the Google / Facebook duopoly. :D

Other hopeful unicorn media startups appear to have peaked as well. That BuzzFeed IPO is on hold: “Some BuzzFeed investors have become worried about the company’s performance and rising costs for expansions in areas like news and entertainment. Those frustrations were aired at a board meeting in recent weeks, in which directors took management to task, the people familiar with the situation said.”

Google’s Chrome web browser will soon have an ad blocker baked into it. Of course the central networks opt out of applying this feature to themselves. Facebook makes serious coin by blocking ad blockers. Google pays Adblock Plus to unblock ads on Google.com & boy are there a lot of ads there.

Format your pages like Google does their search results and they will tell you it is a piss poor user experience & a form of spam – whacking you with a penalty for it.

Of course Google isn’t the only search engine doing this. Mix in ads with a double listing and sometimes there will only be 1 website listed above the fold.

I’ve even seen some Bing search results where organic results have a “Web” label on them – which is conveniently larger than the ad label that is on ads. That is in addition to other tricks like…

lots of ad extensions that push organics below the fold on anything with the slightest commercial intent
bolding throughout ads (title, description, URL) with much lighter bolding of organics
only showing 6 organic results on commercial searches that are likely to generate ad clicks

As bad as either of the above looks in terms of ad load or result diversity on the desktop, it is only worse on mobile.

On mobile devices organic search results can be so hard to find that people ask questions like “Are there any search engines where you don’t have to literally scroll to see a result that isn’t an advertisement?“

The answer is yes.

DuckDuckGo.

But other than that, it is slim pickings.

In an online ecosystem where virtually every innovation is copied or deemed spam, sustainable publishing only works if your business model is different than the central network operators.

Not only is there the aggressive horizontal ad layer for anything with a hint of commercial intent, but now the scrape layer which was first applied to travel is being spread across other categories like ecommerce.

Ecommerce retailers beware. There is now a GIANT knowledge panel result on mobile that takes up the entire top half of the SERP -> Google updates mobile product knowledge panels to show even more info in one spot: https://t.co/3JMsMHuQmJ pic.twitter.com/5uD8zZiSrK— Glenn Gabe (@glenngabe) November 14, 2017

Here are 2 examples. And alarms are going off at Amazon now. Yes, Prime is killer, but organic search traffic is going to tank. Go ahead & scroll down to the organic listings (if you dare).And if anyone clicks the module, they are taken away from the SERPs into G-Land. Wow. :) pic.twitter.com/SswOPj4iGd— Glenn Gabe (@glenngabe) November 14, 2017

The more of your content Google can scrape-n-displace in the search results the less reason there is to visit your website & the more ad-heavy Google can make their interface because they shagged the content from your site.

Simply look at the market caps of the big tech monopolies vs companies in adjacent markets. The aggregate trend is expressed in the stock price. And it is further expressed in the inability for the unicorn media companies to go public.

As big as Snapchat & Twitter are, nobody who invested in either IPO is sitting on a winner today.

Google is outraged anyone might question the numbers & if the current set up is reasonable:

Mr Harris described as “factually incorrect” suggestions that Google was “stealing” ad revenue from publishers, saying that two thirds of the revenues generated by online content went to its originators.

“I’ve heard lots of people say that Google and Facebook are “ruthlessly stealing” all the advertising revenue that publishers hoped to acquire through online editions,” he told the gathering.

“There is no advertising on Google News. Zero. Indeed you will rarely see advertising around news cycles in Google Search either.

Sure it is not the ad revenues they are stealing.

Rather it is the content.

Either by scraping, or by ranking proprietary formats (AMP) above other higher quality content which is not published using the proprietary format & then later attaching crappier & crappier deals to the (faux) “open source” proprietary content format.

As Google grabs the content & cuts the content creator off from the audience while attaching conditions, Google’s PR hacks will tell you they want you to click through to the source:

Google spokeswoman Susan Cadrecha said the company’s goal isn’t to do the thinking for users but “to help you find relevant information quickly and easily.” She added, “We encourage users to understand the full context by clicking through to the source.”

except they are the ones adding extra duplicative layers which make it harder to do.

Google keeps extracting content from publishers & eating the value chain. Some publishers have tried to offset this by putting more ads on their own site while also getting further distribution by adopting the proprietary AMP format. Those who realized AMP was garbage in terms of monetization viewed it as a way to offer teasers to drive users to their websites.

The partial story approach is getting killed though. Either you give Google everything, or they want nothing.

That is, after all, how monopolies negotiate – ultimatums.

Those who don’t give Google their full content will soon receive manual action penalty notifications

Important: Starting 2/1/18, Google is requiring that AMP urls be comparable to the canonical page content. If not, Google will direct users to the non-AMP urls. And the urls won’t be in the Top Stories carousel. Site owners will receive a manual action: https://t.co/ROhbI6TMVz pic.twitter.com/hb9FTluV0S— Glenn Gabe (@glenngabe) November 16, 2017

The value of news content is not zero.

Being the go-to resource for those sorts of “no money here” news topics also enables Google to be the go-to resource for searches for [auto insurance quote] and other highly commercial search terms where Google might make $50 or $100 per click.

Every month Google announces new ad features.

Economics drive everything in publishing. But you have to see how one market position enables another. Google & Facebook are not strong in China, so Toutiao – the top news app in China – is valued at about $20 billion.

Now that Yahoo! has been acquired by Verizon, they’ve decided to shut down their news app. Unprofitable segments are worth more as a write off than as an ongoing concern. Look for Verizon to further take AIM at shutting down additional parts of AOL & Yahoo.

Firefox recently updated to make its underlying rendering engine faster & more stable. As part of the upgrade they killed off many third party extensions, including ours. We plan to update them soon (a few days perhaps), but those who need the extensions working today may want to install something like (Comodo Dragon (or another browser based on the prior Firefox core) & install our extensions in that web browser.

As another part of the most recent Firefox update, Firefox dumped Yahoo! Search for Google search as their default search engine in a new multiyear deal where financial terms were not disclosed.

Yahoo! certainly deserved to lose that deal.

First, they signed a contract with Mozilla containing a change-of-ownership poison pill where Mozilla would still make $375 million a year from them even if they dump Yahoo!. Given what Yahoo! sold for this amounts to about 10% of the company price for the next couple years.

Second, Yahoo! overpaid for the Firefox distribution deal to where they had to make their user experience even more awful to try to get the numbers to back out.

Here is a navigational search result on Yahoo! where the requested site only appears in the right rail knowledge graph.

The “organic” result set has been removed. There’s a Yahoo! News insert, a Yahoo Local insert, an ad inviting you to download Firefox (bet that has since been removed!), other search suggestions, and then graphical ads to try to get you to find office furniture or other irrelevant stuff.

Here is how awful those sorts of search results are: Yahoo! was so embarrassed at the lack of quality of their result set that they put their logo at the upper right edge of the page.

So now they’ll be losing a million a day for a few years based on Marissa Mayer’s fantastic Firefox deal.

And search is just another vertical they made irrelevant.

When they outsourced many verticals & then finally shut down most of the remaining ones, they only left a few key ones:

On our recent earnings call, Yahoo outlined out a plan to simplify our business and focus our effort on our four most successful content areas  – News, Sports, Finance and Lifestyle. To that end, today we will begin phasing out the following Digital Magazines:  Yahoo Food, Yahoo Health, Yahoo Parenting, Yahoo Makers, Yahoo Travel, Yahoo Autos and Yahoo Real Estate.

And for the key verticals they kept, they have pages like the following, which look like a diet version of eHow

Every day they send users away to other sites with deeper content. And eventually people find one they like (like TheAthletic or Dunc’d On) & then Yahoo! stops being a habit.

Meanwhile many people get their broader general news from Facebook, Google shifted their search app to include news, Apple offers a great news app, the default new tab on Microsoft Edge browser lists a localize news feed. Any of those is a superior user experience to Yahoo!.

It is hard to see what Yahoo!’s role is going forward.

Other than the user email accounts (& whatever legal liabilities are associated with the chronic user account hacking incidents), it is hard to see what Verizon bought in Yahoo!.

Probably the single best video to watch to understand the power of Google & Facebook (or even most of the major problems across society) is this following video about pleasure versus happiness.

In constantly seeking pleasure we forego happiness.

The “feed” based central aggregation networks are just like slot machines in your pocket: variable reward circuitry which self-optimizes around exploiting your flaws to eat as much attention as possible.

The above is not an accident. It is, rather, as intended:

“That means that we needed to sort of give you a little dopamine hit every once in a while because someone liked or commented on a photo or a post or whatever … It’s a social validation feedback loop … You’re exploiting a vulnerability in human psychology … [The inventors] understood this, consciously, and we did it anyway.”

• Happy? Good! Share posed photos to make your friends feel their lives are worse than your life is.
• Outraged? Good! Click an ad.
• Hopeless? Good. There is a product which can deliver you pleasure…if only you can…click an ad.

Using machine learning to drive rankings is ultimately an exercise in confirmation bias:

For “Should abortion be legal?” Google cited a South African news site saying, “It is not the place of government to legislate against woman’s choices.”

When asked, “Should abortion be illegal?” it promoted an answer from obscure clickbait site listland.com stating, “Abortion is murder.”

Excellent work Google in using your featured snippets to help make the world more absolutist, polarized & toxic.

The central network operators not only attempt to manipulate people at the emotional level, but the layout of the interface also sets default user patterns.

Most users tend to focus their attention on the left side of the page: “if we were to slice a maximized page down the middle, 80% of the fixations fell on the left half of the screen (even more than our previous finding of 69%). The remaining 20% of fixations were on the right half of the screen.”

This behavior is even more prevalent on search results pages: “On SERPs, almost all fixations (94%) fell on the left side of the page, and 60% those fixations can be isolated to the leftmost 400px.”

On mobile, obviously, the attention is focused on what is above the fold. That which is below the fold sort of doesn’t even exist for a large subset of the population.

Outside of a few central monopoly attention merchant players, the ad-based web is dying.

Mashable has raised about $46 million in VC funding over the past 4 years. And they just sold for about $50 million.

Breaking even is about as good as it gets in a web controlled by the Google / Facebook duopoly. :D

Other hopeful unicorn media startups appear to have peaked as well. That BuzzFeed IPO is on hold: “Some BuzzFeed investors have become worried about the company’s performance and rising costs for expansions in areas like news and entertainment. Those frustrations were aired at a board meeting in recent weeks, in which directors took management to task, the people familiar with the situation said.”

Google’s Chrome web browser will soon have an ad blocker baked into it. Of course the central networks opt out of applying this feature to themselves. Facebook makes serious coin by blocking ad blockers. Google pays Adblock Plus to unblock ads on Google.com & boy are there a lot of ads there.

Format your pages like Google does their search results and they will tell you it is a piss poor user experience & a form of spam – whacking you with a penalty for it.

Of course Google isn’t the only search engine doing this. Mix in ads with a double listing and sometimes there will only be 1 website listed above the fold.

I’ve even seen some Bing search results where organic results have a “Web” label on them – which is conveniently larger than the ad label that is on ads. That is in addition to other tricks like…

• lots of ad extensions that push organics below the fold on anything with the slightest commercial intent
• bolding throughout ads (title, description, URL) with much lighter bolding of organics
• only showing 6 organic results on commercial searches that are likely to generate ad clicks

As bad as either of the above looks in terms of ad load or result diversity on the desktop, it is only worse on mobile.

On mobile devices organic search results can be so hard to find that people ask questions like “Are there any search engines where you don’t have to literally scroll to see a result that isn’t an advertisement?“

The answer is yes.

DuckDuckGo.

But other than that, it is slim pickings.

In an online ecosystem where virtually every innovation is copied or deemed spam, sustainable publishing only works if your business model is different than the central network operators.

Not only is there the aggressive horizontal ad layer for anything with a hint of commercial intent, but now the scrape layer which was first applied to travel is being spread across other categories like ecommerce.

Ecommerce retailers beware. There is now a GIANT knowledge panel result on mobile that takes up the entire top half of the SERP -> Google updates mobile product knowledge panels to show even more info in one spot: https://t.co/3JMsMHuQmJ pic.twitter.com/5uD8zZiSrK— Glenn Gabe (@glenngabe) November 14, 2017

Here are 2 examples. And alarms are going off at Amazon now. Yes, Prime is killer, but organic search traffic is going to tank. Go ahead & scroll down to the organic listings (if you dare).And if anyone clicks the module, they are taken away from the SERPs into G-Land. Wow. :) pic.twitter.com/SswOPj4iGd— Glenn Gabe (@glenngabe) November 14, 2017

The more of your content Google can scrape-n-displace in the search results the less reason there is to visit your website & the more ad-heavy Google can make their interface because they shagged the content from your site.

Simply look at the market caps of the big tech monopolies vs companies in adjacent markets. The aggregate trend is expressed in the stock price. And it is further expressed in the inability for the unicorn media companies to go public.

As big as Snapchat & Twitter are, nobody who invested in either IPO is sitting on a winner today.

Google is outraged anyone might question the numbers & if the current set up is reasonable:

Mr Harris described as “factually incorrect” suggestions that Google was “stealing” ad revenue from publishers, saying that two thirds of the revenues generated by online content went to its originators.

“I’ve heard lots of people say that Google and Facebook are “ruthlessly stealing” all the advertising revenue that publishers hoped to acquire through online editions,” he told the gathering.

“There is no advertising on Google News. Zero. Indeed you will rarely see advertising around news cycles in Google Search either.

Sure it is not the ad revenues they are stealing.

Rather it is the content.

Either by scraping, or by ranking proprietary formats (AMP) above other higher quality content which is not published using the proprietary format & then later attaching crappier & crappier deals to the (faux) “open source” proprietary content format.

As Google grabs the content & cuts the content creator off from the audience while attaching conditions, Google’s PR hacks will tell you they want you to click through to the source:

Google spokeswoman Susan Cadrecha said the company’s goal isn’t to do the thinking for users but “to help you find relevant information quickly and easily.” She added, “We encourage users to understand the full context by clicking through to the source.”

except they are the ones adding extra duplicative layers which make it harder to do.

Google keeps extracting content from publishers & eating the value chain. Some publishers have tried to offset this by putting more ads on their own site while also getting further distribution by adopting the proprietary AMP format. Those who realized AMP was garbage in terms of monetization viewed it as a way to offer teasers to drive users to their websites.

The partial story approach is getting killed though. Either you give Google everything, or they want nothing.

That is, after all, how monopolies negotiate – ultimatums.

Those who don’t give Google their full content will soon receive manual action penalty notifications

Important: Starting 2/1/18, Google is requiring that AMP urls be comparable to the canonical page content. If not, Google will direct users to the non-AMP urls. And the urls won’t be in the Top Stories carousel. Site owners will receive a manual action: https://t.co/ROhbI6TMVz pic.twitter.com/hb9FTluV0S— Glenn Gabe (@glenngabe) November 16, 2017

The value of news content is not zero.

Being the go-to resource for those sorts of “no money here” news topics also enables Google to be the go-to resource for searches for [auto insurance quote] and other highly commercial search terms where Google might make $50 or $100 per click.

Every month Google announces new ad features.

Economics drive everything in publishing. But you have to see how one market position enables another. Google & Facebook are not strong in China, so Toutiao – the top news app in China – is valued at about $20 billion.

Now that Yahoo! has been acquired by Verizon, they’ve decided to shut down their news app. Unprofitable segments are worth more as a write off than as an ongoing concern. Look for Verizon to further take AIM at shutting down additional parts of AOL & Yahoo.

Firefox recently updated to make its underlying rendering engine faster & more stable. As part of the upgrade they killed off many third party extensions, including ours. We plan to update them soon (a few days perhaps), but those who need the extensions working today may want to install something like (Comodo Dragon (or another browser based on the prior Firefox core) & install our extensions in that web browser.

As another part of the most recent Firefox update, Firefox dumped Yahoo! Search for Google search as their default search engine in a new multiyear deal where financial terms were not disclosed.

Yahoo! certainly deserved to lose that deal.

First, they signed a contract with Mozilla containing a change-of-ownership poison pill where Mozilla would still make $375 million a year from them even if they dump Yahoo!. Given what Yahoo! sold for this amounts to about 10% of the company price for the next couple years.

Second, Yahoo! overpaid for the Firefox distribution deal to where they had to make their user experience even more awful to try to get the numbers to back out.

Here is a navigational search result on Yahoo! where the requested site only appears in the right rail knowledge graph.

The “organic” result set has been removed. There’s a Yahoo! News insert, a Yahoo Local insert, an ad inviting you to download Firefox (bet that has since been removed!), other search suggestions, and then graphical ads to try to get you to find office furniture or other irrelevant stuff.

Here is how awful those sorts of search results are: Yahoo! was so embarrassed at the lack of quality of their result set that they put their logo at the upper right edge of the page.

So now they’ll be losing a million a day for a few years based on Marissa Mayer’s fantastic Firefox deal.

And search is just another vertical they made irrelevant.

When they outsourced many verticals & then finally shut down most of the remaining ones, they only left a few key ones:

On our recent earnings call, Yahoo outlined out a plan to simplify our business and focus our effort on our four most successful content areas  – News, Sports, Finance and Lifestyle. To that end, today we will begin phasing out the following Digital Magazines:  Yahoo Food, Yahoo Health, Yahoo Parenting, Yahoo Makers, Yahoo Travel, Yahoo Autos and Yahoo Real Estate.

And for the key verticals they kept, they have pages like the following, which look like a diet version of eHow

Every day they send users away to other sites with deeper content. And eventually people find one they like (like TheAthletic or Dunc’d On) & then Yahoo! stops being a habit.

Meanwhile many people get their broader general news from Facebook, Google shifted their search app to include news, Apple offers a great news app, the default new tab on Microsoft Edge browser lists a localize news feed. Any of those is a superior user experience to Yahoo!.

It is hard to see what Yahoo!’s role is going forward.

Other than the user email accounts (& whatever legal liabilities are associated with the chronic user account hacking incidents), it is hard to see what Verizon bought in Yahoo!.

Grist

Much like publishers, employees at the big tech monopolies can end up little more than grist.

Products & product categories come & go, but even if you build “the one” you still may lose everything in the process.

Imagine building the most successful consumer product of all time only to realize:’The iPhone is the reason I’m divorced,’ Andy Grignon, a senior iPhone engineer, tells me. I heard that sentiment more than once throughout my dozens of interviews with the iPhone’s key architects and engineers.’Yeah, the iPhone ruined more than a few marriages,’ says another.

Microsoft is laying off thousands of salespeople.

Google colluded with competitors to sign anti-employee agreements & now they are trying to hold down labor costs with modular housing built on leased government property. They can tout innovation they bring to Africa, but at their core the tech monopolies are still largely abusive. What’s telling is that these companies keep using their monopoly profits to buy more real estate near their corporate headquarters, keeping jobs there in spite of the extreme local living costs.

“There’s been essentially no dispersion of tech jobs,’ said Mr. Kolko, who conducted the research.’Which metro is the next Silicon Valley? The answer is none, at least for the foreseeable future. Silicon Valley still stands apart.’

Making $180,000 a year can price one out of the local real estate market, requiring living in a van or a two hour commute. An $81,000 salary can require a 3 hour commute.

If you are priced out of the market by the monopoly de jour, you can always pray!

The hype surrounding transformative technology that disintermediates geography & other legacy restraints only lasts so long: “The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.”

AI is often a man standing behind a curtain.

The big tech companies are all about equality, opportunity & innovation. At some point either the jobs move to China or China-like conditions have to move to the job. No benefits, insurance cost passed onto the temp worker, etc.

Google’s outsourced freelance workers have to figure out how to pay for their own health insurance:

A manager named LFEditorCat told the raters in chat that the pay cut had come at the behest of’Big G’s lawyers,’ referring to Google. Later, a rater asked Jackson,’If Google made this change, can Google reverse this change, in theory?’ Jackson replied,’The chances of this changing are less than zero IMO.’

That’s rather unfortunate, as the people who watch the beheading videos will likely need PTSD treatment.

The tech companies are also leveraging many “off the books” employees for last mile programs, where the wage is anything but livable after the cost of fuel, insurance & vehicle maintenance. They are accelerating the worst aspects of consolidated power:

America really is undergoing a radical change in the structure of our political economy. And yet this revolutionary shift of power, control, and wealth has remained all but unrecognized and unstudied … Since the 1990s, large companies have increasingly relied on temporary help to do work that formerly was performed by permanent salaried employees. These arrangements enable firms to hire and fire workers with far greater flexibility and free them from having to provide traditional benefits like unemployment insurance, health insurance, retirement plans, and paid vacations. The workers themselves go by many different names: temps, contingent workers, contractors, freelancers. But while some fit the traditional sense of what it means to be an entrepreneur or independent business owner, many, if not most, do not-precisely because they remain entirely dependent on a single power for their employment.

Dedication & devotion are important traits. Are you willing to do everything you can to go the last mile? “Lyft published a blog post praising a driver who kept picking up fares even after she went into labor and was driving to the hospital to give birth.”

Then again, the health industry is a great driver of consumption:

About 1.8 million workers were out of the labor force for “other” reasons at the beginning of this year, meaning they were not retired, in school, disabled or taking care of a loved one, according to Atlanta Federal Reserve data. Of those people, nearly half — roughly 881,000 workers — said in a survey that they had taken an opioid the day before, according to a study published last year by former White House economist Alan Krueger.”

Creating fake cancer patients is a practical way to make sales.

That is until they stop some of the scams & view those people as no longer worth the economic cost. Those people are only dying off at a rate of about 90 people a day. Long commutes are associated with depression. And enough people are taking anti-depressants that it shows up elsewhere in the food chain.

Rehabilitation is hard work:

After a few years of buildup, Obamacare kicked the scams into high gear. …. With exchange plans largely locked into paying for medically required tests, patients (and their urine) became gold mines. Some labs started offering kickbacks to treatment centers, who in turn began splitting the profits with halfway houses that would tempt clients with free rent and other services. … Street-level patient brokers and phone room lead generators stepped up to fill the beds with strategies across the ethical spectrum, including signing addicts up for Obamacare and paying their premiums.

Google made a lot of money from that scam until it got negative PR coverage.

The story says Wall Street is *unhappy* at the too low $475,000 price tag for this medicine. https://t.co/Fw4RXok2V1— Matt Stoller (@matthewstoller) September 4, 2017

At the company, we’re family. Once you are done washing the dishes, you can live in the garage. Just make sure you juice!

When platform monopolies dictate the roll-out of technology, there is less and less innovation, fewer places to invest, less to invent. Eventually, the rhetoric of innovation turns into DISRUPT, a quickly canceled show on MSNBC, and Juicero, a Google-backed punchline.

This moment of stagnating innovation and productivity is happening because Silicon Valley has turned its back on its most important political friend: antitrust. Instead, it’s embraced what it should understand as the enemy of innovation: monopoly.

And the snowflake narrative not only relies on the “off the books” marginalized freelance employees to maintain lush benefits for the core employees, but those core employees can easily end up thrown under the bus because accusation is guilt. Uniformity of political ideology is the zenith of a just world.

Some marketing/framing savvy pple figured out that the most effective way to build a fascist movement is to call it:antifascist.— NassimNicholasTaleb (@nntaleb) August 31, 2017

Celebrate diversity in all aspects of life – except thought^TM.

Identity politics 2.0 wars come to Google. Oh no. But mass spying is fine since its equal opportunity predation.https://t.co/BArOsWb1ho— Julian Assange (@JulianAssange) August 6, 2017

Free speech is now considered violence. Free speech has real cost. So if you disagree with someone, “people you might have to work with may simply punch you in the face” – former Google diversity expert Yonatan Zunger.

Anything but the facts!

Mob rule – with a splash of violence – for the win.

Social justice is the antithesis of justice.

It is the aspie guy getting fired for not understanding the full gender “spectrum.”

Google exploits the mental abilities of its aspie workers but lets them burn at the stake when its disability, too much honesty, manifests. pic.twitter.com/Sd1A0KJvc0— Julian Assange (@JulianAssange) August 15, 2017

It is the repression of truth: “Truth equals virtue equals happiness. You cannot solve serious social problems by telling lies or punishing people who tell truth.”

Most meetings at Google are recorded. Anyone at Google can watch it. We’re trying to be really open about everything…except for this. They don’t want any paper trail for any of these things. They were telling us about a lot of these potentially illegal practices that they’ve been doing to try to increase diversity. Basically treating people differently based on what their race or gender are. – James Damore

The recursive feedback loops & reactionary filtering are so bad that some sites promoting socialism are now being dragged to the Google gulag.

In a set of guidelines issued to Google evaluators in March, elaborated in April by Google VP of Engineering Ben Gomes, the company instructed its search evaluators to flag pages returning’conspiracy theories’ or’upsetting’ content unless’the query clearly indicates the user is seeking an alternative viewpoint.’ The changes to the search rankings of WSWS content are consistent with such a mechanism. Users of Google will be able to find the WSWS if they specifically include’World Socialist Web Site’ in their search request. But if their inquiry simply includes term such as’Trotsky,”Trotskyism,”Marxism,”socialism’ or’inequality,’ they will not find the site.

Every website which has a following & challenges power is considered “fake news” or “conspiracy theory” until many years later, when many of the prior “nutjob conspiracies” turn out to be accurate representations of reality.

Under its new so-called anti-fake-news program, Google algorithms have in the past few months moved socialist, anti-war, and progressive websites from previously prominent positions in Google searches to positions up to 50 search result pages from the first page, essentially removing them from the search results any searcher will see. Counterpunch, World Socialsit Website, Democracy Now, American Civil liberties Union, Wikileaks are just a few of the websites which have experienced severe reductions in their returns from Google searches.

In the meantime townhall meetings celebrating diversity will be canceled & differentiated voices will be marginalized to protect the mob from themselves.

What does the above say about tech monopolies wanting to alter the structure of society when their internal ideals are based on fundamental lies? They can’t hold an internal meeting addressing sacred cows because “ultimately the loudest voices on the fringes drive the perception and reaction” but why not let them distribute swarms of animals with bacteria & see what happens? Let’s make Earth a beta.

FANG

The more I study the macro picture the more concerned I get about the long term ramifications of a financially ever more divergent society. pic.twitter.com/KoY60fAfe2— Sven Henrich (@NorthmanTrader) August 9, 2017

Monopoly platforms are only growing more dominant by the day.

Over the past three decades, the U.S. government has permitted corporate giants to take over an ever-increasing share of the economy. Monopoly-the ultimate enemy of free-market competition-now pervades every corner of American life … Economic power, in fact, is more concentrated than ever: According to a study published earlier this year, half of all publicly traded companies have disappeared over the past four decades.

And you don’t have to subscribe to deep state conspiracy theory in order to see the impacts.

Nike selling on Amazon=media cos selling to Netflix=news orgs publishing straight to Facebook. https://t.co/3hpVIsymXD— Miriam Gottfried (@miriamgottfried) June 28, 2017

The revenue, value & profit transfer is overt:

It is no coincidence that from 2012 to 2016, Amazon, Google and Facebook’s revenues increased by $137 billion and the remaining Fortune 497 revenues contracted by $97 billion.

Netflix, Amazon, Apple, Google, Facebook … are all aggressively investing in video content as bandwidth is getting cheaper & they need differentiated content to drive subscription revenues. If the big players are bidding competitively to have differentiated video content that puts a bid under some premium content, but for ad-supported content the relatively high CPMs on video content might fall sharply in the years to come.

From a partner perspective, if you only get a percent of revenue that transfers all the risk onto you, how is the new Facebook video feature going to be any better than being a YouTube partner? As video becomes more widespread, won’t that lower CPMs?

No need to guess:

One publisher said its Facebook-monetized videos had an average CPM of 15 cents. A second publisher, which calculated ad rates based on video views that lasted long enough to reach the ad break, said the average CPM for its mid-rolls is 75 cents. A third publisher made roughly $500 from more than 20 million total video views on that page in September.

That’s how monopolies work. Whatever is hot at the moment gets pitched as the future, but underneath the hood all compliments get commoditized:

as a result of this increased market power, the big superstar companies have been raising their prices and cutting their wages. This has lifted profits and boosted the stock market, but it has also held down real wages, diverted more of the nation’s income to business owners, and increased inequality. It has also held back productivity, since raising prices restricts economic output.

The future of the web is closed, proprietary silos that mirror what existed before the web:

If in five years I’m just watching NFL-endorsed ESPN clips through a syndication deal with a messaging app, and Vice is just an age-skewed Viacom with better audience data, and I’m looking up the same trivia on Genius instead of Wikipedia, and’publications’ are just content agencies that solve temporary optimization issues for much larger platforms, what will have been point of the last twenty years of creating things for the web?

They’ve all won their respective markets & are now converging:

We’ve been in the celebration phase all year as Microsoft, Google, Amazon, Apple, Netflix and Facebook take their place in the pantheon of classic American monopolists. These firms and a few others, it is now widely acknowledged, dominate everything. There is no day-part in which they do not dominate the battle for consumers’ attention. There is no business safe from their ambitions. There are no industries in which their influence and encroachment are not currently being felt.

The web shifts information-based value chains to universal distribution at zero marginal cost, which shifts most of the value extraction to the attention merchants.

The raw feed stock for these centralized platforms isn’t particularly profitable:

despite a user base near the size of Instagram’s, Tumblr never quite figured out how to make money at the level Facebook has led managers and shareholders to expect … running a platform for culture creation is, increasingly, a charity operation undertaken by larger companies. Servers are expensive, and advertisers would rather just throw money at Facebook than take a chance

Those resting in the shadows of the giants will keep getting crushed: “They let big tech crawl, parse, and resell their IP, catalyzing an extraordinary transfer in wealth from the creators to the platforms.”

The. Problem. Everywhere. Is. Unaccountable. Monopoly. Power. That. Is. Why. Voters. Everywhere. Are. Angry.— Matt Stoller (@matthewstoller) September 24, 2017

They’ll take the influence & margins, but not the responsibility normally associated with such a position:

“Facebook has embraced the healthy gross margins and influence of a media firm but is allergic to the responsibilities of a media firm,” Mr. Galloway says. … For Facebook, a company with more than $14 billion in free cash flow in the past year, to say it is adding 250 people to its safety and security efforts is’pissing in the ocean,’ Mr. Galloway says.’They could add 25,000 people, spend $1 billion on AI technologies to help those 25,000 employees sort, filter and ID questionable content and advertisers, and their cash flow would decline 10% to 20%.’

It’s why there’s a management shake up at Pandora, Soundcloud laid off 40% of their staff & Vimeo canceled their subscription service before it was even launched.

Deregulation, as commonly understood, is actually just moving regulatory authority from democratic institutions to private ones.— Matt Stoller (@matthewstoller) September 23, 2017

With the winners of the web determined, it’s time to start locking down the ecosystem with DRM:

Practically speaking, bypassing DRM isn’t hard (Google’s version of DRM was broken for six years before anyone noticed), but that doesn’t matter. Even low-quality DRM gets the copyright owner the extremely profitable right to stop their customers and competitors from using their products except in the ways that the rightsholder specifies. … for a browser to support EME, it must also license a “Content Decryption Module” (CDM). Without a CDM, video just doesn’t work. All the big incumbents advocating for DRM have licenses for CDMs, but new entrants to the market will struggle to get these CDMs, and in order to get them, they have to make promises to restrict otherwise legal activities … We’re dismayed to see the W3C literally overrule the concerns of its public interest members, security experts, accessibility members and innovative startup members, putting the institution’s thumb on the scales for the large incumbents that dominate the web, ensuring that dominance lasts forever.

After years of loosey goosey privacy violations by the tech monopoly players, draconian privacy laws will block new competitors:

More significantly, the GDPR extends the concept of’personal data’ to bring it into line with the online world. The regulation stipulates, for example, that an online identifier, such as a device’s IP address, can now be personal data. So next year, a wide range of identifiers that had hitherto lain outside the law will be regarded as personal data, reflecting changes in technology and the way organisations collect information about people. … Facebook and Google should be OK, because they claim to have the’consent’ of their users. But the data-broking crowd do not have that consent.

GDRP is less than 8 months away.

If you can’t get the fat thumb accidental mobile ad clicks then you need to convert formerly free services to a paid version or sell video ads. Yahoo! shut down most their verticals, was acquired by Verizon, and is now part of Oath. Oath’s strategy is so sound Katie Couric left:

Oath’s video unit, however, had begun doubling down on the type of highly shareable,’snackable’ bites that people gobble up on their smartphones and Facebook feeds. … . What frustrates her like nothing else, two people close to Couric told me, is when she encounters fans and they ask her what she’s up to these days.

When content is atomized into the smallest bits & recycling is encouraged only the central network operators without editorial content costs win.

Even Reddit is pushing crappy autoplay videos for the sake of ads. There’s no chance of it working for them, but they’ll still try, as Google & Facebook have enviable market caps.

Mic laid off journalists and is pivoting to video.

It doesn’t work, but why not try.

The TV networks which focused on the sort of junk short-form video content that is failing online are also seeing low ratings.

Probably just a coincidence.

Some of the “innovative” upstart web publishers are recycling TV ads as video content to run pre-roll ads on. An ad inside an ad.

Some suggest the repackaging and reposting of ads highlights the’pivot to video’ mentality many publishers now demonstrate. The push to churn out video content to feed platforms and to attract potentially lucrative video advertising is increasingly viewed as a potential solution to an increasingly challenging business model problem.

Publishers might also get paid a commission on any sales they help drive by including affiliate links alongside the videos. If these links drive users to purchase the products, then the publisher gets a cut.

Is there any chance recycling low quality infomercial styled ads as placeholder auto-play video content to run prerolls on is a sustainable business practice?

If that counts as strategic thinking in online publishing, count me as a short.

For years whenever the Adobe Flash plugin for Firefox had a security update users who hit the page got a negative option install of Google Chrome as their default web browser. And Google constantly markets Chrome across their properties:

Google is aggressively using its monopoly position in Internet services such as Google Mail, Google Calendar and YouTube to advertise Chrome. Browsers are a mature product and its hard to compete in a mature market if your main competitor has access to billions of dollars worth of free marketing.

It only takes a single yes on any of those billions of ad impressions (or an accidental opt in on the negative option bundling with security updates) for the default web browser to change permanently.

There’s no way Mozilla can compete with Google on economics trying to buy back an audience.

Mozilla is willing to buy influence, too – particularly in mobile, where it’s so weak. One option is paying partners to distribute Firefox on their phones.’We’re going to have to put money toward it,’ Dixon says, but she expects it’ll pay off when Mozilla can share revenue from the resulting search traffic.

They have no chance of winning when they focus on wedge issues like fake news. Much like their mobile operating system, it is a distraction. And the core economics of paying for distribution won’t work either. How can Mozilla get a slice of an advertiser’s ad budget through Yahoo through Bing & compete against Google’s bid?

Google is willing to enter uneconomic deals to keep their monopoly power. Look no further than the $1 billion investment they made in AOL which they quickly wrote down by $726 million.

Google pays Apple $3 billion PER YEAR to be the default search provider in Safari. Verizon acquired Yahoo! for $4.48 billion. There’s no chance of Yahoo! outbidding Google for default Safari search placement & if Apple liked the idea they would have bought Yahoo!. It is hard to want to take a big risk & spend billions on something that might not back out when you get paid billions to not take any risk.

Even Microsoft would be taking a big risk in making a competitive bid for the Apple search placement. Microsoft recently disclosed “Search advertising revenue increased $124 million or 8%.” If $124 million is 8% then their quarterly search ad revenue is $1.674 billion. To outbid Google they would have to bid over half their total search revenues.

Regulatory Capture

“I have a foreboding of an America in which my children’s or grandchildren’s time – when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness. The dumbing down of america is most evident in the slow decay of substantive content in the enormously influential media, the 30-second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance.” – Carl Sagan, The Demon-haunted World, 1996

Fascinating. Obama felt he had zero authority even while President except to ask nicely. Zero will to govern. https://t.co/935OaRpV2X— Matt Stoller (@matthewstoller) September 25, 2017

The monopoly platforms have remained unscathed by government regulatory efforts in the U.S. Google got so good at lobbying they made Goldman Sachs look like amateurs. It never hurts to place your lawyers in the body that (should) regulate you: “Wright left the FTC in August 2015, returning to George Mason. Just five months later, he had a new position as’of counsel’ at Wilson Sonsini, Google’s primary outside law firm.”

…the 3rd former FTC commissioner in a row to join a firm that represents Google https://t.co/Zu92c5nILh— Luther Lowe (@lutherlowe) September 6, 2017

Remember how Google engineers repeatedly announced how people who bought or sold links without clear machine & human readable disclosure are scum? One way to take .edu link building to the next level is to sponsor academic research without disclosure:

Some researchers share their papers before publication and let Google give suggestions, according to thousands of pages of emails obtained by the Journal in public-records requests of more than a dozen university professors. The professors don’t always reveal Google’s backing in their research, and few disclosed the financial ties in subsequent articles on the same or similar topics, the Journal found. … Google officials in Washington compiled wish lists of academic papers that included working titles, abstracts and budgets for each proposed paper-then they searched for willing authors, according to a former employee and a former Google lobbyist. … Mr. Sokol, though, had extensive financial ties to Google, according to his emails obtained by the Journal. He was a part-time attorney at the Silicon Valley law firm of Wilson Sonsini Goodrich & Rosati, which has Google as a client. The 2016 paper’s co-author was also a partner at the law firm, which didn’t respond to requests for comment.

• Buy link without disclosure = potential influence ranking in search results = evil spammer SEO
• Buy academic research without disclosure (even if lack of disclosure is intentional & the person who didn’t disclose is willing to lie to hide the connection) = directly influence economic & political outcomes = saint Google

As bad as that is, Google has non profit think tanks fire ENTIRE TEAMS if they suggest regulatory action against Google is just:

“We are in the process of trying to expand our relationship with Google on some absolutely key points,’ Ms. Slaughter wrote in an email to Mr. Lynn, urging him to’just THINK about how you are imperiling funding for others.’

“What happened has little to do with New America, and everything to do with Google and monopoly power. One reason that American governance is dysfunctional is because of the capture of much academic and NGO infrastructure by power. That this happened obviously and clumsily at one think tank is not the point. The point is that this is a *system* of power. I have deep respect for the scholars at New America and the work done there. The point here is how *Google* and monopolies operate. I’ll make one other political point about monopoly power. Democracies all over the world are seeing an upsurge in anger. Why? Scholars have tended to look at political differences, like does a different social safety net have an impact on populism. But it makes more sense to understand what countries have in common. Multi-nationals stretch over… multiple nations. So if you think, we do, that corporations are part of our political system, then populism everywhere monopolies operate isn’t a surprise. Because these are the same monopolies. Google is part of the American political system, and the European one, and so on and so forth.” – Matt Stoller

Any dissent of Google is verboten:

in recent years, Google has become greedy about owning not just search capacities, video and maps, but also the shape of public discourse. As the Wall Street Journal recently reported, Google has recruited and cultivated law professors who support its views. And as the New York Times recently reported, it has become invested in building curriculum for our public schools, and has created political strategy to get schools to adopt its products. This year, Google is on track to spend more money than any company in America on lobbying.

“I just got off the phone with Eric Schmidt and he is pulling all of his money.” – Anne-Marie Slaughter

They not only directly control the think tanks, but also state who & what the think tanks may fund:

Google’s director of policy communications, Bob Boorstin, emailed the Rose Foundation (a major funder of Consumer Watchdog) complaining about Consumer Watchdog and asking the charity to consider “whether there might be better groups in which to place your trust and resources.”

They can also, you know, blackball your media organization or outright penalize you. The more aggressive you are with monetization the more leverage they have to arbitrarily hit you if you don’t play ball.

Six years ago, I was pressured to unpublish a critical piece about Google’s monopolistic practices after the company got upset about it. In my case, the post stayed unpublished. I was working for Forbes at the time, and was new to my job.
…
Google never challenged the accuracy of the reporting. Instead, a Google spokesperson told me that I needed to unpublish the story because the meeting had been confidential, and the information discussed there had been subject to a non-disclosure agreement between Google and Forbes. (I had signed no such agreement, hadn’t been told the meeting was confidential, and had identified myself as a journalist.)

Sometimes the threat is explicit:

“You’re already asking very difficult questions to Mr. Juncker,’ the YouTube employee said before Birbes’ interview in an exchange she captured on video.’You’re talking about corporate lobbies. You don’t want to get on the wrong side of YouTube and the European Commission… Well, except if you don’t care about having a long career on YouTube.’

Concentrated source of power manipulates the media. Not new, rather typical. Which is precisely why monopolies should be broken up once they have a track record of abusing the public trust:

As more and more of the economy become sown up by monopolistic corporations, there are fewer and fewer opportunities for entrepreneurship. … By design, the private business corporation is geared to pursue its own interests. It’s our job as citizens to structure a political economy that keeps corporations small enough to ensure that their actions never threaten the people’s sovereignty over our nation.

How much control can one entity get before it becomes excessive?

Google controls upwards of 80 percent of global search-and the capital to either acquire or crush any newcomers. They are bringing us a hardly gilded age of prosperity but depressed competition, economic stagnation, and, increasingly, a chilling desire to control the national conversation.

Google thinks their business is too complex to exist in a single organization. They restructured to minimize their legal risks:

The switch is partly related to Google’s transformation from a listed public company into a business owned by a holding company. The change helps keep potential challenges in one business from spreading to another, according to Dana Hobart, a litigator with the Buchalter law firm in Los Angeles.

Isn’t that an admission they should be broken up?

Early Xoogler Doug Edwards wrote: “[Larry Page] wondered how Google could become like a better version of the RIAA – not just a mediator of digital music licensing – but a marketplace for fair distribution of all forms of digitized content.”

A better version of the RIAA as a north star sure seems like an accurate analogy:

In an explosive new allegation, a renowned architect has accused Google of racketeering, saying in a lawsuit the company has a pattern of stealing trade secrets from people it first invites to collaborate. …’It’s cheaper to steal than to develop your own technology,’ Buether said.’You can take it from somebody else and you have a virtually unlimited budget to fight these things in court.’ …’It’s even worse than just using the proprietary information – they actually then claim ownership through patent applications,’ Buether said.

The following slide expresses Google’s views on premium content

No surprise the Content Creators Coalition called for Congressional Investigation into Google’s Distortion of Public Policy Debates:

Google’s efforts to monopolize civil society in support of the company’s balance-sheet-driven agenda is as dangerous as it is wrong. For years, we have watched as Google used its monopoly powers to hurt artists and music creators while profiting off stolen content. For years, we have warned about Google’s actions that stifle the views of anyone who disagrees with its business practices, while claiming to champion free speech.

In a world where monopolies are built with mission statements like’to organize the world’s information and make it universally accessible and useful’ it makes sense to seal court documents, bury regulatory findings, or else the slogan doesn’t fit as the consumer harm was obvious.

“The 160-page critique, which was supposed to remain private but was inadvertently disclosed in an open-records request, concluded that Google’s ‘conduct has resulted – and will result – in real harm to consumers.’ ” But Google was never penalized, because the political appointees overrode the staff recommendation, an action rarely taken by the FTC. The Journal pointed out that Google, whose executives donated more money to the Obama campaign than any company, had held scores of meetings at the White House between the time the staff filed its report and the ultimate decision to drop the enforcement action.

Some scrappy (& perhaps masochistic players) have been fighting the monopoly game for over a decade:

June 2006: Foundem’s Google search penalty begins. Foundem starts an arduous campaign to have the penalty lifted.
September 2007: Foundem is’whitelisted’ for AdWords (i.e. Google manually grants Foundem immunity from its AdWords penalty).
December 2009: Foundem is’whitelisted’ for Google natural search (i.e. Google manually grants Foundem immunity from its search penalty)

For many years Google has “manipulated search results to favor its own comparison-shopping service. … Google both demotes competitors’ offerings in search rankings and artificially inserts its own service in a box above all other search results, regardless of their relevance.”

After losing for over a decade, on the 27th of June a win was finally delivered when the European Commission issued a manual action to negate the spam, when they fined Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.” – Margrethe Vestager

That fine looks to be the first of multiple record-breaking fines as “Sources expect the Android fine to be substantially higher than the shopping penalty.”

That fine was well deserved:

Quoting internal Google documents and emails, the report shows that the company created a list of rival comparison shopping sites that it would artificially lower in the general search results, even though tests showed that Google users’liked the quality of the [rival] sites’ and gave negative feedback on the proposed changes. Google reworked its search algorithm at least four times, the documents show, and altered its established rating criteria before the proposed changes received’slightly positive’ user feedback. … Google’s displayed prices for everyday products, such as watches, anti-wrinkle cream and wireless routers, were roughly 50 percent higher – sometimes more – than those on rival sites. A subsequent study by a consumer protection group found similar results. A study by the Financial Times also documented the higher prices.

Nonetheless, Google is appealing it. The ease with which Google quickly crafted a response was telling.

The competitors who were slaughtered by monopolistic bundling won’t recover‘The damage has been done. The industry is on its knees, and this is not going to put it back,’ said Mr. Stables, who has decided to participate in Google’s new auctions despite misgivings.’I’m sort of shocked that they’ve come out with this,’ he added.

Google claims they’ll be running their EU shopping ads as a separate company with positive profit margins & that advertisers won’t be bidding against themselves if they are on multiple platforms. Anyone who believes that stuff hasn’t dropped a few thousand dollars on a Flash-only website after AdWords turned on Enhanced campaigns against their wishes – charging the advertisers dollars per click to send users to a blank page which would not load.

Hell may freeze over, causing the FTC to look into Google’s Android bundling similarly to how Microsoft’s OS bundling was looked at.

If hell doesn’t freeze over, it is likely because Google further ramped up their lobbying efforts, donating to political organizations they claim to be ideologically opposed to.

“Monopolists can improve their products to better serve their customers just like any other market participant” <– FTC Chair just said this— Matt Stoller (@matthewstoller) September 12, 2017

The Fight Against Rising (& Declining) Nationalism

As a global corporation above & beyond borders, Google has long been against nationalism. Eric Schmidt’s Hillary Clinton once wrote: “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.”

Apparently Google flacks did not get that memo (or they got the new memo about Eric Schmidt’s Donald Trump), because they were quick to denounce the European Commission’s move as anti-American:

We are writing to express our deep concerns about the European Union’s aggressive and heavy-handed antitrust enforcement action against American companies. It has become increasingly clear that, rather than being grounded in a transparent legal framework, these various investigations and complaints are being driven by politics and protectionist policies that harm open-competition practices, consumers, and unfairly target American companies,.

The above nonsense was in spite of Yelp carrying a heavy load.

The lion’s share of work on EU case was advanced by US companies who had to go to Europe after a politically captured FTC failed them. 6/x— Luther Lowe (@lutherlowe) June 26, 2017

Yelp celebrated the victory: “Google has been found guilty of engaging in illegal conduct with the aim of promoting its vertical search services. Although the decision addresses comparison shopping services, the European Commission has also recognized that the same illegal behavior applies to other verticals, including local search.”

It’s not a’grudge.’ Extractive platforms competing with their ecosystem is the Achilles heel of the entire economy https://t.co/uLKSLC6vQy— Tim O’Reilly (@timoreilly) July 2, 2017

The EU is also looking for an expert to monitor Google’s algorithm. It certainly isn’t hard to find areas where the home team wins.

Wait until the EU realizes #Google issue much bigger than paid listings; domains(.)google ranks ahead of #GoDaddy pic.twitter.com/nKLrzKNUAc— The Domains (@thedomains) June 27, 2017

Grist

Much like publishers, employees at the big tech monopolies can end up little more than grist.

Products & product categories come & go, but even if you build “the one” you still may lose everything in the process.

Imagine building the most successful consumer product of all time only to realize:’The iPhone is the reason I’m divorced,’ Andy Grignon, a senior iPhone engineer, tells me. I heard that sentiment more than once throughout my dozens of interviews with the iPhone’s key architects and engineers.’Yeah, the iPhone ruined more than a few marriages,’ says another.

Microsoft is laying off thousands of salespeople.

Google colluded with competitors to sign anti-employee agreements & now they are trying to hold down labor costs with modular housing built on leased government property. They can tout innovation they bring to Africa, but at their core the tech monopolies are still largely abusive. What’s telling is that these companies keep using their monopoly profits to buy more real estate near their corporate headquarters, keeping jobs there in spite of the extreme local living costs.

“There’s been essentially no dispersion of tech jobs,’ said Mr. Kolko, who conducted the research.’Which metro is the next Silicon Valley? The answer is none, at least for the foreseeable future. Silicon Valley still stands apart.’

Making $180,000 a year can price one out of the local real estate market, requiring living in a van or a two hour commute. An $81,000 salary can require a 3 hour commute.

If you are priced out of the market by the monopoly de jour, you can always pray!

The hype surrounding transformative technology that disintermediates geography & other legacy restraints only lasts so long: “The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.”

AI is often a man standing behind a curtain.

The big tech companies are all about equality, opportunity & innovation. At some point either the jobs move to China or China-like conditions have to move to the job. No benefits, insurance cost passed onto the temp worker, etc.

Google’s outsourced freelance workers have to figure out how to pay for their own health insurance:

A manager named LFEditorCat told the raters in chat that the pay cut had come at the behest of’Big G’s lawyers,’ referring to Google. Later, a rater asked Jackson,’If Google made this change, can Google reverse this change, in theory?’ Jackson replied,’The chances of this changing are less than zero IMO.’

That’s rather unfortunate, as the people who watch the beheading videos will likely need PTSD treatment.

The tech companies are also leveraging many “off the books” employees for last mile programs, where the wage is anything but livable after the cost of fuel, insurance & vehicle maintenance. They are accelerating the worst aspects of consolidated power:

America really is undergoing a radical change in the structure of our political economy. And yet this revolutionary shift of power, control, and wealth has remained all but unrecognized and unstudied … Since the 1990s, large companies have increasingly relied on temporary help to do work that formerly was performed by permanent salaried employees. These arrangements enable firms to hire and fire workers with far greater flexibility and free them from having to provide traditional benefits like unemployment insurance, health insurance, retirement plans, and paid vacations. The workers themselves go by many different names: temps, contingent workers, contractors, freelancers. But while some fit the traditional sense of what it means to be an entrepreneur or independent business owner, many, if not most, do not-precisely because they remain entirely dependent on a single power for their employment.

Dedication & devotion are important traits. Are you willing to do everything you can to go the last mile? “Lyft published a blog post praising a driver who kept picking up fares even after she went into labor and was driving to the hospital to give birth.”

Then again, the health industry is a great driver of consumption:

About 1.8 million workers were out of the labor force for “other” reasons at the beginning of this year, meaning they were not retired, in school, disabled or taking care of a loved one, according to Atlanta Federal Reserve data. Of those people, nearly half — roughly 881,000 workers — said in a survey that they had taken an opioid the day before, according to a study published last year by former White House economist Alan Krueger.”

Creating fake cancer patients is a practical way to make sales.

That is until they stop some of the scams & view those people as no longer worth the economic cost. Those people are only dying off at a rate of about 90 people a day. Long commutes are associated with depression. And enough people are taking anti-depressants that it shows up elsewhere in the food chain.

Rehabilitation is hard work:

After a few years of buildup, Obamacare kicked the scams into high gear. …. With exchange plans largely locked into paying for medically required tests, patients (and their urine) became gold mines. Some labs started offering kickbacks to treatment centers, who in turn began splitting the profits with halfway houses that would tempt clients with free rent and other services. … Street-level patient brokers and phone room lead generators stepped up to fill the beds with strategies across the ethical spectrum, including signing addicts up for Obamacare and paying their premiums.

Google made a lot of money from that scam until it got negative PR coverage.

The story says Wall Street is *unhappy* at the too low $475,000 price tag for this medicine. https://t.co/Fw4RXok2V1— Matt Stoller (@matthewstoller) September 4, 2017

At the company, we’re family. Once you are done washing the dishes, you can live in the garage. Just make sure you juice!

When platform monopolies dictate the roll-out of technology, there is less and less innovation, fewer places to invest, less to invent. Eventually, the rhetoric of innovation turns into DISRUPT, a quickly canceled show on MSNBC, and Juicero, a Google-backed punchline.

This moment of stagnating innovation and productivity is happening because Silicon Valley has turned its back on its most important political friend: antitrust. Instead, it’s embraced what it should understand as the enemy of innovation: monopoly.

And the snowflake narrative not only relies on the “off the books” marginalized freelance employees to maintain lush benefits for the core employees, but those core employees can easily end up thrown under the bus because accusation is guilt. Uniformity of political ideology is the zenith of a just world.

Some marketing/framing savvy pple figured out that the most effective way to build a fascist movement is to call it:antifascist.— NassimNicholasTaleb (@nntaleb) August 31, 2017

Celebrate diversity in all aspects of life – except thought^TM.

Identity politics 2.0 wars come to Google. Oh no. But mass spying is fine since its equal opportunity predation.https://t.co/BArOsWb1ho— Julian Assange (@JulianAssange) August 6, 2017

Free speech is now considered violence. Free speech has real cost. So if you disagree with someone, “people you might have to work with may simply punch you in the face” – former Google diversity expert Yonatan Zunger.

Anything but the facts!

Mob rule – with a splash of violence – for the win.

Social justice is the antithesis of justice.

It is the aspie guy getting fired for not understanding the full gender “spectrum.”

Google exploits the mental abilities of its aspie workers but lets them burn at the stake when its disability, too much honesty, manifests. pic.twitter.com/Sd1A0KJvc0— Julian Assange (@JulianAssange) August 15, 2017

It is the repression of truth: “Truth equals virtue equals happiness. You cannot solve serious social problems by telling lies or punishing people who tell truth.”

Most meetings at Google are recorded. Anyone at Google can watch it. We’re trying to be really open about everything…except for this. They don’t want any paper trail for any of these things. They were telling us about a lot of these potentially illegal practices that they’ve been doing to try to increase diversity. Basically treating people differently based on what their race or gender are. – James Damore

The recursive feedback loops & reactionary filtering are so bad that some sites promoting socialism are now being dragged to the Google gulag.

In a set of guidelines issued to Google evaluators in March, elaborated in April by Google VP of Engineering Ben Gomes, the company instructed its search evaluators to flag pages returning’conspiracy theories’ or’upsetting’ content unless’the query clearly indicates the user is seeking an alternative viewpoint.’ The changes to the search rankings of WSWS content are consistent with such a mechanism. Users of Google will be able to find the WSWS if they specifically include’World Socialist Web Site’ in their search request. But if their inquiry simply includes term such as’Trotsky,”Trotskyism,”Marxism,”socialism’ or’inequality,’ they will not find the site.

Every website which has a following & challenges power is considered “fake news” or “conspiracy theory” until many years later, when many of the prior “nutjob conspiracies” turn out to be accurate representations of reality.

Under its new so-called anti-fake-news program, Google algorithms have in the past few months moved socialist, anti-war, and progressive websites from previously prominent positions in Google searches to positions up to 50 search result pages from the first page, essentially removing them from the search results any searcher will see. Counterpunch, World Socialsit Website, Democracy Now, American Civil liberties Union, Wikileaks are just a few of the websites which have experienced severe reductions in their returns from Google searches.

In the meantime townhall meetings celebrating diversity will be canceled & differentiated voices will be marginalized to protect the mob from themselves.

What does the above say about tech monopolies wanting to alter the structure of society when their internal ideals are based on fundamental lies? They can’t hold an internal meeting addressing sacred cows because “ultimately the loudest voices on the fringes drive the perception and reaction” but why not let them distribute swarms of animals with bacteria & see what happens? Let’s make Earth a beta.

FANG

The more I study the macro picture the more concerned I get about the long term ramifications of a financially ever more divergent society. pic.twitter.com/KoY60fAfe2— Sven Henrich (@NorthmanTrader) August 9, 2017

Monopoly platforms are only growing more dominant by the day.

Over the past three decades, the U.S. government has permitted corporate giants to take over an ever-increasing share of the economy. Monopoly-the ultimate enemy of free-market competition-now pervades every corner of American life … Economic power, in fact, is more concentrated than ever: According to a study published earlier this year, half of all publicly traded companies have disappeared over the past four decades.

And you don’t have to subscribe to deep state conspiracy theory in order to see the impacts.

Nike selling on Amazon=media cos selling to Netflix=news orgs publishing straight to Facebook. https://t.co/3hpVIsymXD— Miriam Gottfried (@miriamgottfried) June 28, 2017

The revenue, value & profit transfer is overt:

It is no coincidence that from 2012 to 2016, Amazon, Google and Facebook’s revenues increased by $137 billion and the remaining Fortune 497 revenues contracted by $97 billion.

Netflix, Amazon, Apple, Google, Facebook … are all aggressively investing in video content as bandwidth is getting cheaper & they need differentiated content to drive subscription revenues. If the big players are bidding competitively to have differentiated video content that puts a bid under some premium content, but for ad-supported content the relatively high CPMs on video content might fall sharply in the years to come.

From a partner perspective, if you only get a percent of revenue that transfers all the risk onto you, how is the new Facebook video feature going to be any better than being a YouTube partner? As video becomes more widespread, won’t that lower CPMs?

No need to guess:

One publisher said its Facebook-monetized videos had an average CPM of 15 cents. A second publisher, which calculated ad rates based on video views that lasted long enough to reach the ad break, said the average CPM for its mid-rolls is 75 cents. A third publisher made roughly $500 from more than 20 million total video views on that page in September.

That’s how monopolies work. Whatever is hot at the moment gets pitched as the future, but underneath the hood all compliments get commoditized:

as a result of this increased market power, the big superstar companies have been raising their prices and cutting their wages. This has lifted profits and boosted the stock market, but it has also held down real wages, diverted more of the nation’s income to business owners, and increased inequality. It has also held back productivity, since raising prices restricts economic output.

The future of the web is closed, proprietary silos that mirror what existed before the web:

If in five years I’m just watching NFL-endorsed ESPN clips through a syndication deal with a messaging app, and Vice is just an age-skewed Viacom with better audience data, and I’m looking up the same trivia on Genius instead of Wikipedia, and’publications’ are just content agencies that solve temporary optimization issues for much larger platforms, what will have been point of the last twenty years of creating things for the web?

They’ve all won their respective markets & are now converging:

We’ve been in the celebration phase all year as Microsoft, Google, Amazon, Apple, Netflix and Facebook take their place in the pantheon of classic American monopolists. These firms and a few others, it is now widely acknowledged, dominate everything. There is no day-part in which they do not dominate the battle for consumers’ attention. There is no business safe from their ambitions. There are no industries in which their influence and encroachment are not currently being felt.

The web shifts information-based value chains to universal distribution at zero marginal cost, which shifts most of the value extraction to the attention merchants.

The raw feed stock for these centralized platforms isn’t particularly profitable:

despite a user base near the size of Instagram’s, Tumblr never quite figured out how to make money at the level Facebook has led managers and shareholders to expect … running a platform for culture creation is, increasingly, a charity operation undertaken by larger companies. Servers are expensive, and advertisers would rather just throw money at Facebook than take a chance

Those resting in the shadows of the giants will keep getting crushed: “They let big tech crawl, parse, and resell their IP, catalyzing an extraordinary transfer in wealth from the creators to the platforms.”

The. Problem. Everywhere. Is. Unaccountable. Monopoly. Power. That. Is. Why. Voters. Everywhere. Are. Angry.— Matt Stoller (@matthewstoller) September 24, 2017

They’ll take the influence & margins, but not the responsibility normally associated with such a position:

“Facebook has embraced the healthy gross margins and influence of a media firm but is allergic to the responsibilities of a media firm,” Mr. Galloway says. … For Facebook, a company with more than $14 billion in free cash flow in the past year, to say it is adding 250 people to its safety and security efforts is’pissing in the ocean,’ Mr. Galloway says.’They could add 25,000 people, spend $1 billion on AI technologies to help those 25,000 employees sort, filter and ID questionable content and advertisers, and their cash flow would decline 10% to 20%.’

It’s why there’s a management shake up at Pandora, Soundcloud laid off 40% of their staff & Vimeo canceled their subscription service before it was even launched.

Deregulation, as commonly understood, is actually just moving regulatory authority from democratic institutions to private ones.— Matt Stoller (@matthewstoller) September 23, 2017

With the winners of the web determined, it’s time to start locking down the ecosystem with DRM:

Practically speaking, bypassing DRM isn’t hard (Google’s version of DRM was broken for six years before anyone noticed), but that doesn’t matter. Even low-quality DRM gets the copyright owner the extremely profitable right to stop their customers and competitors from using their products except in the ways that the rightsholder specifies. … for a browser to support EME, it must also license a “Content Decryption Module” (CDM). Without a CDM, video just doesn’t work. All the big incumbents advocating for DRM have licenses for CDMs, but new entrants to the market will struggle to get these CDMs, and in order to get them, they have to make promises to restrict otherwise legal activities … We’re dismayed to see the W3C literally overrule the concerns of its public interest members, security experts, accessibility members and innovative startup members, putting the institution’s thumb on the scales for the large incumbents that dominate the web, ensuring that dominance lasts forever.

After years of loosey goosey privacy violations by the tech monopoly players, draconian privacy laws will block new competitors:

More significantly, the GDPR extends the concept of’personal data’ to bring it into line with the online world. The regulation stipulates, for example, that an online identifier, such as a device’s IP address, can now be personal data. So next year, a wide range of identifiers that had hitherto lain outside the law will be regarded as personal data, reflecting changes in technology and the way organisations collect information about people. … Facebook and Google should be OK, because they claim to have the’consent’ of their users. But the data-broking crowd do not have that consent.

GDRP is less than 8 months away.

If you can’t get the fat thumb accidental mobile ad clicks then you need to convert formerly free services to a paid version or sell video ads. Yahoo! shut down most their verticals, was acquired by Verizon, and is now part of Oath. Oath’s strategy is so sound Katie Couric left:

Oath’s video unit, however, had begun doubling down on the type of highly shareable,’snackable’ bites that people gobble up on their smartphones and Facebook feeds. … . What frustrates her like nothing else, two people close to Couric told me, is when she encounters fans and they ask her what she’s up to these days.

When content is atomized into the smallest bits & recycling is encouraged only the central network operators without editorial content costs win.

Even Reddit is pushing crappy autoplay videos for the sake of ads. There’s no chance of it working for them, but they’ll still try, as Google & Facebook have enviable market caps.

Video ads are good with everything!

Want to find a job? Watch some autoplay video ads on LinkedIn.

Mic laid off journalists and is pivoting to video.

It doesn’t work, but why not try.

The TV networks which focused on the sort of junk short-form video content that is failing online are also seeing low ratings.

Probably just a coincidence.

Some of the “innovative” upstart web publishers are recycling TV ads as video content to run pre-roll ads on. An ad inside an ad.

Some suggest the repackaging and reposting of ads highlights the’pivot to video’ mentality many publishers now demonstrate. The push to churn out video content to feed platforms and to attract potentially lucrative video advertising is increasingly viewed as a potential solution to an increasingly challenging business model problem.

Publishers might also get paid a commission on any sales they help drive by including affiliate links alongside the videos. If these links drive users to purchase the products, then the publisher gets a cut.

Is there any chance recycling low quality infomercial styled ads as placeholder auto-play video content to run prerolls on is a sustainable business practice?

If that counts as strategic thinking in online publishing, count me as a short.

For years whenever the Adobe Flash plugin for Firefox had a security update users who hit the page got a negative option install of Google Chrome as their default web browser. And Google constantly markets Chrome across their properties:

Google is aggressively using its monopoly position in Internet services such as Google Mail, Google Calendar and YouTube to advertise Chrome. Browsers are a mature product and its hard to compete in a mature market if your main competitor has access to billions of dollars worth of free marketing.

It only takes a single yes on any of those billions of ad impressions (or an accidental opt in on the negative option bundling with security updates) for the default web browser to change permanently.

There’s no way Mozilla can compete with Google on economics trying to buy back an audience.

Mozilla is willing to buy influence, too – particularly in mobile, where it’s so weak. One option is paying partners to distribute Firefox on their phones.’We’re going to have to put money toward it,’ Dixon says, but she expects it’ll pay off when Mozilla can share revenue from the resulting search traffic.

They have no chance of winning when they focus on wedge issues like fake news. Much like their mobile operating system, it is a distraction. And the core economics of paying for distribution won’t work either. How can Mozilla get a slice of an advertiser’s ad budget through Yahoo through Bing & compete against Google’s bid?

Google is willing to enter uneconomic deals to keep their monopoly power. Look no further than the $1 billion investment they made in AOL which they quickly wrote down by $726 million.

Google pays Apple $3 billion PER YEAR to be the default search provider in Safari. Verizon acquired Yahoo! for $4.48 billion. There’s no chance of Yahoo! outbidding Google for default Safari search placement & if Apple liked the idea they would have bought Yahoo!. It is hard to want to take a big risk & spend billions on something that might not back out when you get paid billions to not take any risk.

Even Microsoft would be taking a big risk in making a competitive bid for the Apple search placement. Microsoft recently disclosed “Search advertising revenue increased $124 million or 8%.” If $124 million is 8% then their quarterly search ad revenue is $1.674 billion. To outbid Google they would have to bid over half their total search revenues.

Regulatory Capture

“I have a foreboding of an America in which my children’s or grandchildren’s time – when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness. The dumbing down of america is most evident in the slow decay of substantive content in the enormously influential media, the 30-second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance.” – Carl Sagan, The Demon-haunted World, 1996

Fascinating. Obama felt he had zero authority even while President except to ask nicely. Zero will to govern. https://t.co/935OaRpV2X— Matt Stoller (@matthewstoller) September 25, 2017

The monopoly platforms have remained unscathed by government regulatory efforts in the U.S. Google got so good at lobbying they made Goldman Sachs look like amateurs. It never hurts to place your lawyers in the body that (should) regulate you: “Wright left the FTC in August 2015, returning to George Mason. Just five months later, he had a new position as’of counsel’ at Wilson Sonsini, Google’s primary outside law firm.”

…the 3rd former FTC commissioner in a row to join a firm that represents Google https://t.co/Zu92c5nILh— Luther Lowe (@lutherlowe) September 6, 2017

Remember how Google engineers repeatedly announced how people who bought or sold links without clear machine & human readable disclosure are scum? One way to take .edu link building to the next level is to sponsor academic research without disclosure:

Some researchers share their papers before publication and let Google give suggestions, according to thousands of pages of emails obtained by the Journal in public-records requests of more than a dozen university professors. The professors don’t always reveal Google’s backing in their research, and few disclosed the financial ties in subsequent articles on the same or similar topics, the Journal found. … Google officials in Washington compiled wish lists of academic papers that included working titles, abstracts and budgets for each proposed paper-then they searched for willing authors, according to a former employee and a former Google lobbyist. … Mr. Sokol, though, had extensive financial ties to Google, according to his emails obtained by the Journal. He was a part-time attorney at the Silicon Valley law firm of Wilson Sonsini Goodrich & Rosati, which has Google as a client. The 2016 paper’s co-author was also a partner at the law firm, which didn’t respond to requests for comment.

• Buy link without disclosure = potential influence ranking in search results = evil spammer SEO
• Buy academic research without disclosure (even if lack of disclosure is intentional & the person who didn’t disclose is willing to lie to hide the connection) = directly influence economic & political outcomes = saint Google

As bad as that is, Google has non profit think tanks fire ENTIRE TEAMS if they suggest regulatory action against Google is just:

“We are in the process of trying to expand our relationship with Google on some absolutely key points,’ Ms. Slaughter wrote in an email to Mr. Lynn, urging him to’just THINK about how you are imperiling funding for others.’

“What happened has little to do with New America, and everything to do with Google and monopoly power. One reason that American governance is dysfunctional is because of the capture of much academic and NGO infrastructure by power. That this happened obviously and clumsily at one think tank is not the point. The point is that this is a *system* of power. I have deep respect for the scholars at New America and the work done there. The point here is how *Google* and monopolies operate. I’ll make one other political point about monopoly power. Democracies all over the world are seeing an upsurge in anger. Why? Scholars have tended to look at political differences, like does a different social safety net have an impact on populism. But it makes more sense to understand what countries have in common. Multi-nationals stretch over… multiple nations. So if you think, we do, that corporations are part of our political system, then populism everywhere monopolies operate isn’t a surprise. Because these are the same monopolies. Google is part of the American political system, and the European one, and so on and so forth.” – Matt Stoller

Any dissent of Google is verboten:

in recent years, Google has become greedy about owning not just search capacities, video and maps, but also the shape of public discourse. As the Wall Street Journal recently reported, Google has recruited and cultivated law professors who support its views. And as the New York Times recently reported, it has become invested in building curriculum for our public schools, and has created political strategy to get schools to adopt its products. This year, Google is on track to spend more money than any company in America on lobbying.

“I just got off the phone with Eric Schmidt and he is pulling all of his money.” – Anne-Marie Slaughter

They not only directly control the think tanks, but also state who & what the think tanks may fund:

Google’s director of policy communications, Bob Boorstin, emailed the Rose Foundation (a major funder of Consumer Watchdog) complaining about Consumer Watchdog and asking the charity to consider “whether there might be better groups in which to place your trust and resources.”

They can also, you know, blackball your media organization or outright penalize you. The more aggressive you are with monetization the more leverage they have to arbitrarily hit you if you don’t play ball.

Six years ago, I was pressured to unpublish a critical piece about Google’s monopolistic practices after the company got upset about it. In my case, the post stayed unpublished. I was working for Forbes at the time, and was new to my job.
…
Google never challenged the accuracy of the reporting. Instead, a Google spokesperson told me that I needed to unpublish the story because the meeting had been confidential, and the information discussed there had been subject to a non-disclosure agreement between Google and Forbes. (I had signed no such agreement, hadn’t been told the meeting was confidential, and had identified myself as a journalist.)

Sometimes the threat is explicit:

“You’re already asking very difficult questions to Mr. Juncker,’ the YouTube employee said before Birbes’ interview in an exchange she captured on video.’You’re talking about corporate lobbies. You don’t want to get on the wrong side of YouTube and the European Commission… Well, except if you don’t care about having a long career on YouTube.’

Concentrated source of power manipulates the media. Not new, rather typical. Which is precisely why monopolies should be broken up once they have a track record of abusing the public trust:

As more and more of the economy become sown up by monopolistic corporations, there are fewer and fewer opportunities for entrepreneurship. … By design, the private business corporation is geared to pursue its own interests. It’s our job as citizens to structure a political economy that keeps corporations small enough to ensure that their actions never threaten the people’s sovereignty over our nation.

How much control can one entity get before it becomes excessive?

Google controls upwards of 80 percent of global search-and the capital to either acquire or crush any newcomers. They are bringing us a hardly gilded age of prosperity but depressed competition, economic stagnation, and, increasingly, a chilling desire to control the national conversation.

Google thinks their business is too complex to exist in a single organization. They restructured to minimize their legal risks:

The switch is partly related to Google’s transformation from a listed public company into a business owned by a holding company. The change helps keep potential challenges in one business from spreading to another, according to Dana Hobart, a litigator with the Buchalter law firm in Los Angeles.

Isn’t that an admission they should be broken up?

Early Xoogler Doug Edwards wrote: “[Larry Page] wondered how Google could become like a better version of the RIAA – not just a mediator of digital music licensing – but a marketplace for fair distribution of all forms of digitized content.”

A better version of the RIAA as a north star sure seems like an accurate analogy:

In an explosive new allegation, a renowned architect has accused Google of racketeering, saying in a lawsuit the company has a pattern of stealing trade secrets from people it first invites to collaborate. …’It’s cheaper to steal than to develop your own technology,’ Buether said.’You can take it from somebody else and you have a virtually unlimited budget to fight these things in court.’ …’It’s even worse than just using the proprietary information – they actually then claim ownership through patent applications,’ Buether said.

The following slide expresses Google’s views on premium content

No surprise the Content Creators Coalition called for Congressional Investigation into Google’s Distortion of Public Policy Debates:

Google’s efforts to monopolize civil society in support of the company’s balance-sheet-driven agenda is as dangerous as it is wrong. For years, we have watched as Google used its monopoly powers to hurt artists and music creators while profiting off stolen content. For years, we have warned about Google’s actions that stifle the views of anyone who disagrees with its business practices, while claiming to champion free speech.

In a world where monopolies are built with mission statements like ‘to organize the world’s information and make it universally accessible and useful’ it makes sense to seal court documents, bury regulatory findings, or else the slogan doesn’t fit as the consumer harm was obvious.

“The 160-page critique, which was supposed to remain private but was inadvertently disclosed in an open-records request, concluded that Google’s ‘conduct has resulted – and will result – in real harm to consumers.’ ” But Google was never penalized, because the political appointees overrode the staff recommendation, an action rarely taken by the FTC. The Journal pointed out that Google, whose executives donated more money to the Obama campaign than any company, had held scores of meetings at the White House between the time the staff filed its report and the ultimate decision to drop the enforcement action.

Some scrappy (& perhaps masochistic players) have been fighting the monopoly game for over a decade:

June 2006: Foundem’s Google search penalty begins. Foundem starts an arduous campaign to have the penalty lifted.
September 2007: Foundem is’whitelisted’ for AdWords (i.e. Google manually grants Foundem immunity from its AdWords penalty).
December 2009: Foundem is’whitelisted’ for Google natural search (i.e. Google manually grants Foundem immunity from its search penalty)

For many years Google has “manipulated search results to favor its own comparison-shopping service. … Google both demotes competitors’ offerings in search rankings and artificially inserts its own service in a box above all other search results, regardless of their relevance.”

After losing for over a decade, on the 27th of June a win was finally delivered when the European Commission issued a manual action to negate the spam, when they fined Google €2.42 billion for abusing dominance as search engine by giving illegal advantage to own comparison shopping service.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.” – Margrethe Vestager

That fine looks to be the first of multiple record-breaking fines as “Sources expect the Android fine to be substantially higher than the shopping penalty.”

That fine was well deserved:

Quoting internal Google documents and emails, the report shows that the company created a list of rival comparison shopping sites that it would artificially lower in the general search results, even though tests showed that Google users’liked the quality of the [rival] sites’ and gave negative feedback on the proposed changes. Google reworked its search algorithm at least four times, the documents show, and altered its established rating criteria before the proposed changes received’slightly positive’ user feedback. … Google’s displayed prices for everyday products, such as watches, anti-wrinkle cream and wireless routers, were roughly 50 percent higher – sometimes more – than those on rival sites. A subsequent study by a consumer protection group found similar results. A study by the Financial Times also documented the higher prices.

Nonetheless, Google is appealing it. The ease with which Google quickly crafted a response was telling.

The competitors who were slaughtered by monopolistic bundling won’t recover‘The damage has been done. The industry is on its knees, and this is not going to put it back,’ said Mr. Stables, who has decided to participate in Google’s new auctions despite misgivings.’I’m sort of shocked that they’ve come out with this,’ he added.

Google claims they’ll be running their EU shopping ads as a separate company with positive profit margins & that advertisers won’t be bidding against themselves if they are on multiple platforms. Anyone who believes that stuff hasn’t dropped a few thousand dollars on a Flash-only website after AdWords turned on Enhanced campaigns against their wishes – charging the advertisers dollars per click to send users to a blank page which would not load.

Hell may freeze over, causing the FTC to look into Google’s Android bundling similarly to how Microsoft’s OS bundling was looked at.

If hell doesn’t freeze over, it is likely because Google further ramped up their lobbying efforts, donating to political organizations they claim to be ideologically opposed to.

“Monopolists can improve their products to better serve their customers just like any other market participant” <– FTC Chair just said this— Matt Stoller (@matthewstoller) September 12, 2017

The Fight Against Rising (& Declining) Nationalism

As a global corporation above & beyond borders, Google has long been against nationalism. Eric Schmidt’s Hillary Clinton once wrote: “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.”

Apparently Google flacks did not get that memo (or they got the new memo about Eric Schmidt’s Donald Trump), because they were quick to denounce the European Commission’s move as anti-American:

We are writing to express our deep concerns about the European Union’s aggressive and heavy-handed antitrust enforcement action against American companies. It has become increasingly clear that, rather than being grounded in a transparent legal framework, these various investigations and complaints are being driven by politics and protectionist policies that harm open-competition practices, consumers, and unfairly target American companies,.

The above nonsense was in spite of Yelp carrying a heavy load.

The lion’s share of work on EU case was advanced by US companies who had to go to Europe after a politically captured FTC failed them. 6/x— Luther Lowe (@lutherlowe) June 26, 2017

Yelp celebrated the victory: “Google has been found guilty of engaging in illegal conduct with the aim of promoting its vertical search services. Although the decision addresses comparison shopping services, the European Commission has also recognized that the same illegal behavior applies to other verticals, including local search.”

It’s not a’grudge.’ Extractive platforms competing with their ecosystem is the Achilles heel of the entire economy https://t.co/uLKSLC6vQy— Tim O’Reilly (@timoreilly) July 2, 2017

The EU is also looking for an expert to monitor Google’s algorithm. It certainly isn’t hard to find areas where the home team wins.

Wait until the EU realizes #Google issue much bigger than paid listings; domains(.)google ranks ahead of #GoDaddy pic.twitter.com/nKLrzKNUAc— The Domains (@thedomains) June 27, 2017

Last August I wrote a blog post about how attention merchants were sucking the value out of online publishing. In it I noted how the Yahoo! Directory disappeared & how even DMOZ saw a sharp drop in traffic & rankings over the past few years.

The concept of a neutral web is dead. In its place is agenda-driven media.

• Politically charged misinformed snippets.
• Ads cloaked as content.
• Public relations propaganda.
• Mostly correct (but politically insensitive) articles being “fact checked” where a minor detail is disputed to label the entire piece as not credible.

As the tech oligarchs broadly defund publishing, the publishers still need to eat. Aggregate information quality declines to make the numbers work. Companies which see their ad revenues slide 20%, 30% or 40% year after year can’t justify maintaining the labor-intensive yet unmonetized side projects.

There is Wikipedia, but it is not without bias & beyond the value expressed in the hidden bias most of the remaining value from it flows on through to the attention merchant / audience aggregation / content scraper platforms.

Last month DMOZ announced they were closing on March 14th without much fanfare. And on March 17th the directory went offline.

A number of people have pushed to preserve & archive the DMOZ data. Some existing DMOZ editors are planning on launching a new directory under a different name but as of the 17th DMOZ editors put up a copy at dmoztools.net. Jim Boykin scraped DMOZ & uploaded a copy here. A couple other versions of DMOZ have been published at OpenDirectoryProject.org & Freemoz.org.

DMOZ was not without criticism or controversy,

Although site policies suggest that an individual site should be submitted to only one category, as of October 2007, Topix.com, a news aggregation site operated by DMOZ founder Rich Skrenta, has more than 17,000 listings.

Early in the history of DMOZ, its staff gave representatives of selected companies, such as Rolling Stone or CNN, editing access in order to list individual pages from their websites. Links to individual CNN articles were added until 2004, but were entirely removed from the directory in January 2008 due to the content being outdated and not considered worth the effort to maintain.

but by-and-large it added value to the structure of the web.

As search has advanced (algorithmic evolution, economic power, influence over publishers, enhanced bundling of distribution & user tracking) general web directories haven’t been able to keep pace. Ultimately the web is a web of links & pages rather than a web of sites. Many great sites span multiple categories. Every large quality site has some misinformation on it. Every well-known interactive site has some great user contributions & user generated spam on it. Search engines have better signals about what pages are important & which pages have maintained importance over time. As search engines have improved link filtering algorithms & better incorporated user tracking in rankings, broad-based manual web directories had no chance.

The web of pages vs web of sites concept can be easily observed in how some of the early successful content platforms have broken down their broad-based content portals into a variety of niche sites.

When links were (roughly) all that mattered, leveraging a website’s link authority meant it was far more profitable for a large entity to keep publishing more content on the one main site. That is how eHow became the core of a multi-billion Dollar company.

Demand Media showed other publishers the way. And if the other existing sites were to stay competitive, they also had to water down content quality to make the numbers back out. The problem with this was the glut of content was lower ad rates. And the decline in ad rates was coupled with a shift away from a links-only view of search relevancy to a model based on weighting link profiles against user engagement metrics.

Websites with lots of links, lots of thin content & terrible engagement metrics were hit.

Kristen Moore, vp of marketing for Demand Media, explained what drove the most egregious aspects of eHow’s editorial strategy: “There’s some not very bright people out there.”

eHow improved their site design, drastically reduced their ad density, removed millions of articles from their site, and waited. However nothing they did on that domain name was ever going to work. They dug too deep of a hole selling the growth story to pump a multi-billion Dollar valuation. And they generated so much animosity from journalists who felt overwork & underpaid that even when they did rank journalists would typically prefer to link to anything but them.

The flip side of that story is the newspaper chains, which rushed to partner with Demand Media to build eHow-inspired sections on their sites.

• traveltips.usatoday.com
• homeguides.sfgate.com
• smallbusiness.chron.com
• the Arizona Republic
• Even the bastion of left-wing thinking Salon couldn’t ignore the easy money opportunity.

Brands which enjoy the Google brand subsidy are also quite hip to work with Demand Media, which breathes new life into once retired content: “Sometimes Demand will even dust off old content that’s been published but is no longer live and repurpose it for a brand.”

As Facebook & Google grew more dominant in the online ad ecosystem they aggressively moved to suck in publisher content & shift advertiser spend onto their core properties. The rise of time spent on social sites only made it harder for websites to be sought out destination. Google also effectively cut off direct distribution by consolidating & de-monetizing the RSS reader space then shutting down a project they easily could have left run.

As the web got more competitive, bloggers & niche publications which were deeply specialized were able to steal marketshare in key verticals by leveraging a differentiated editorial opinion.

Even if they couldn’t necessarily afford to build strong brands via advertising, they were worthy of a follow on some social media channels & perhaps an email subscription. And the best niche editorial remains worthy of a direct visit:

Everything about Techmeme and its lingering success seems to defy the contemporary wisdom of building a popular website. It publishes zero original reporting and is not a social network. It doesn’t have a mobile app or a newsletter or even much of a social presence beyond its Twitter account, which posts dry commodity news with zero flair for clickability.

As a work around to the Panda hits, sites like eHow are now becoming collections of niche-focused sites (Cuteness.com, Techwalla.com, Sapling.com, Leaf.tv, etc will join Livestrong.com & eHow.com). It appears to be working so far…

…but they may only be 1 Panda update away from finding out the new model isn’t sustainable either.

About.com has done the same thing (TheSpruce.com, Verywell.com, Lifewire.com, TheBalance.com). Hundreds of millions of Dollars are riding on the hope that as the algorithms keep getting more granular they won’t discover moving the content to niche brands wasn’t enough.

As content moves around search engines with billions of Dollars in revenue can recalibrate rankings for each page & adjust rankings based on user experience. Did an influential “how to” guide become irrelevant after a software or hardware update? If so, they can see it didn’t solve the user’s problem and rank a more recent document which reflects the current software or hardware. Is a problem easy to solve with a short snippet of content? If so, that can get scraped into the search results.

Web directories which are built around sites rather than pages have no chance of competing against the billions of Dollars of monthly search ads & the full cycle user tracking search companies like Google & Bing can do with their integrated search engines, ad networks, web browsers & operating systems.

Arguably in most cases the idea of neutral-based publishing no longer works on the modern web. The shill gets exclusive stories. The political polemic gets automatic retweets from those who identify. The content which lacks agenda probably lacks the economics to pay for ads & buy distribution unless people can tell the creator loves what they do so much it influences them enough to repeatedly visit & perhaps pay for access.

Last August I wrote a blog post about how attention merchants were sucking the value out of online publishing. In it I noted how the Yahoo! Directory disappeared & how even DMOZ saw a sharp drop in traffic & rankings over the past few years.

The concept of a neutral web is dead. In its place is agenda-driven media.

• Politically charged misinformed snippets.
• Ads cloaked as content.
• Public relations propaganda.
• Mostly correct (but politically insensitive) articles being “fact checked” where a minor detail is disputed to label the entire piece as not credible.

As the tech oligarchs broadly defund publishing, the publishers still need to eat. Aggregate information quality declines to make the numbers work. Companies which see their ad revenues slide 20%, 30% or 40% year after year can’t justify maintaining the labor-intensive yet unmonetized side projects.

There is Wikipedia, but it is not without bias & beyond the value expressed in the hidden bias most of the remaining value from it flows on through to the attention merchant / audience aggregation / content scraper platforms.

Last month DMOZ announced they were closing on March 14th without much fanfare. And on March 17th the directory went offline.

A number of people have pushed to preserve & archive the DMOZ data. Some existing DMOZ editors are planning on launching a new directory under a different name but as of the 17th DMOZ editors put up a copy at dmoztools.net. Jim Boykin scraped DMOZ & uploaded a copy here. A couple other versions of DMOZ have been published at OpenDirectoryProject.org & Freemoz.org.

DMOZ was not without criticism or controversy,

Although site policies suggest that an individual site should be submitted to only one category, as of October 2007, Topix.com, a news aggregation site operated by DMOZ founder Rich Skrenta, has more than 17,000 listings.

Early in the history of DMOZ, its staff gave representatives of selected companies, such as Rolling Stone or CNN, editing access in order to list individual pages from their websites. Links to individual CNN articles were added until 2004, but were entirely removed from the directory in January 2008 due to the content being outdated and not considered worth the effort to maintain.

but by-and-large it added value to the structure of the web.

As search has advanced (algorithmic evolution, economic power, influence over publishers, enhanced bundling of distribution & user tracking) general web directories haven’t been able to keep pace. Ultimately the web is a web of links & pages rather than a web of sites. Many great sites span multiple categories. Every large quality site has some misinformation on it. Every well-known interactive site has some great user contributions & user generated spam on it. Search engines have better signals about what pages are important & which pages have maintained importance over time. As search engines have improved link filtering algorithms & better incorporated user tracking in rankings, broad-based manual web directories had no chance.

The web of pages vs web of sites concept can be easily observed in how some of the early successful content platforms have broken down their broad-based content portals into a variety of niche sites.

When links were (roughly) all that mattered, leveraging a website’s link authority meant it was far more profitable for a large entity to keep publishing more content on the one main site. That is how eHow became the core of a multi-billion Dollar company.

Demand Media showed other publishers the way. And if the other existing sites were to stay competitive, they also had to water down content quality to make the numbers back out. The problem with this was the glut of content was lower ad rates. And the decline in ad rates was coupled with a shift away from a links-only view of search relevancy to a model based on weighting link profiles against user engagement metrics.

Websites with lots of links, lots of thin content & terrible engagement metrics were hit.

Kristen Moore, vp of marketing for Demand Media, explained what drove the most egregious aspects of eHow’s editorial strategy: “There’s some not very bright people out there.”

eHow improved their site design, drastically reduced their ad density, removed millions of articles from their site, and waited. However nothing they did on that domain name was ever going to work. They dug too deep of a hole selling the growth story to pump a multi-billion Dollar valuation. And they generated so much animosity from journalists who felt overwork & underpaid that even when they did rank journalists would typically prefer to link to anything but them.

The flip side of that story is the newspaper chains, which rushed to partner with Demand Media to build eHow-inspired sections on their sites.

• traveltips.usatoday.com
• homeguides.sfgate.com
• smallbusiness.chron.com
• the Arizona Republic
• Even the bastion of left-wing thinking Salon couldn’t ignore the easy money opportunity.

Brands which enjoy the Google brand subsidy are also quite hip to work with Demand Media, which breathes new life into once retired content: “Sometimes Demand will even dust off old content that’s been published but is no longer live and repurpose it for a brand.”

As Facebook & Google grew more dominant in the online ad ecosystem they aggressively moved to suck in publisher content & shift advertiser spend onto their core properties. The rise of time spent on social sites only made it harder for websites to be sought out destination. Google also effectively cut off direct distribution by consolidating & de-monetizing the RSS reader space then shutting down a project they easily could have left run.

As the web got more competitive, bloggers & niche publications which were deeply specialized were able to steal marketshare in key verticals by leveraging a differentiated editorial opinion.

Even if they couldn’t necessarily afford to build strong brands via advertising, they were worthy of a follow on some social media channels & perhaps an email subscription. And the best niche editorial remains worthy of a direct visit:

Everything about Techmeme and its lingering success seems to defy the contemporary wisdom of building a popular website. It publishes zero original reporting and is not a social network. It doesn’t have a mobile app or a newsletter or even much of a social presence beyond its Twitter account, which posts dry commodity news with zero flair for clickability.

As a work around to the Panda hits, sites like eHow are now becoming collections of niche-focused sites (Cuteness.com, Techwalla.com, Sapling.com, Leaf.tv, etc will join Livestrong.com & eHow.com). It appears to be working so far…

…but they may only be 1 Panda update away from finding out the new model isn’t sustainable either.

About.com has done the same thing (TheSpruce.com, Verywell.com, Lifewire.com, TheBalance.com). Hundreds of millions of Dollars are riding on the hope that as the algorithms keep getting more granular they won’t discover moving the content to niche brands wasn’t enough.

As content moves around search engines with billions of Dollars in revenue can recalibrate rankings for each page & adjust rankings based on user experience. Did an influential “how to” guide become irrelevant after a software or hardware update? If so, they can see it didn’t solve the user’s problem and rank a more recent document which reflects the current software or hardware. Is a problem easy to solve with a short snippet of content? If so, that can get scraped into the search results.

Web directories which are built around sites rather than pages have no chance of competing against the billions of Dollars of monthly search ads & the full cycle user tracking search companies like Google & Bing can do with their integrated search engines, ad networks, web browsers & operating systems.

Arguably in most cases the idea of neutral-based publishing no longer works on the modern web. The shill gets exclusive stories. The political polemic gets automatic retweets from those who identify. The content which lacks agenda probably lacks the economics to pay for ads & buy distribution unless people can tell the creator loves what they do so much it influences them enough to repeatedly visit & perhaps pay for access.

There may be a couple exceptions which prove the rule, but new TLDs are generally an awful investment for everyone except the registry operator.

Here is the short version…

Imagine registering a domain for $10, building a business on it, and then learning the renewal fee will increase to hundreds of $ a year.— Elliot Silver (@DInvesting) March 7, 2017

And the long version…

Diminishing Returns

About a half-decade ago I wrote about how Google devalued domain names from an SEO perspective & there have been a number of leading “category killer” domains which have repeatedly been recycled from startup to acquisition to shut down to PPC park page to buy now for this once in a lifetime opportunity in an endless water cycle.

The central web platforms are becoming ad heavy, which in turn decreases the reach of anything which is not an advertisement. For the most valuable concepts / markets / keywords ads eat up the entire interface for the first screen full of results. Key markets like hotels might get a second round of vertical ads to further displace the concept of organic results.

Proprietary, Closed-Ecosystem Roach Motels

The tech monopolies can only make so much money by stuffing ads onto their own platform. To keep increasing their take they need to increase the types, varieties & formats of media they host and control & keep the attention on their platform.

Both Google & Facebook are promoting scams where they feed on desperate publishers & suck a copy of the publisher’s content into being hosted by the tech monopoly platform de jour & sprinkle a share of the revenues back to the content sources.

They may even pay a bit upfront for new content formats, but then after the market is primed the deal shifts to where (once again) almost nobody other than the tech monopoly platform wins.

The attempt to “own” the web & never let users go is so extreme both companies will make up bogus statistics to promote their proprietary / fake open / actually closed standards.

If you ignore how Google’s AMP double, triple, or quadruple counts visitors in Google Analytics the visit numbers look appealing.

But the flip side of those fake metrics is actual revenues do not flow.

My own experience with amp is greatly reduced ad revenue. @Topheratl admits that weather dot com may be an anomaly in having higher ad $.— Marie Haynes (@Marie_Haynes) February 22, 2017

Facebook has the same sort of issues, with frequently needing to restate various metrics while partners fly blind.

These companies are restructuring society & the race to the bottom to try to make the numbers work in an increasingly unstable & parasitic set of platform choices is destroying adjacent markets:

Have you tried Angry Birds lately? It’s a swamp of dark patterns. All extractive logic meant to trick you into another in-app payment. It’s the perfect example of what happens when product managers have to squeeze ever-more-growth out of ever-less-fertile lands to hit their targets year after year. … back to the incentives. It’s not just those infused by venture capital timelines and return requirements, but also the likes of tax incentives favoring capital gains over income. … that’s the truly insidious part of the tech lords solution to everything. This fantasy that they will be greeted as liberators. When the new boss is really a lot like the old boss, except the big stick is replaced with the big algorithm. Depersonalizing all punishment but doling it out just the same. … this new world order is being driven by a tiny cabal of monopolies. So commercial dissent is near impossible. … competition is for the little people. Pitting one individual contractor against another in a race to the bottom. Hoarding all the bargaining power at the top. Disparaging any attempts against those at the bottom to organize with unions or otherwise.

To be a success on the attention platforms you have to push toward the edges. But as you become successful you become a target.

And the dehumanized “algorithm” is not above politics & public relations.

Pewdiepie is the biggest success story on the YouTube platform. When he made a video showing some of the absurd aspects of Fiverr it led to a WSJ investigation which “uncovered” a pattern of anti-semitism. And yet one of the reporters who worked on that story wrote far more offensive and anti-semetic tweets. The hypocrisy of the hit job didn’t matter. They still were able to go after Pewdiepie’s ad relationships to cut him off from Disney’s Maker Studios & the premium tier of YouTube ads.

The fact that he is an individual with broad reach means he’ll still be fine economically, but many other publishers would quickly end up in a death spiral from the above sequence.

If it can happen to a leading player in a closed ecosystem then the risk to smaller players is even greater.

In some emerging markets Facebook effectively *is* the Internet.

The Decline of Exact Match Domains

Domains have been so devalued (from an SEO perspective) that some names like PaydayLoans.net sell for about $3,000 at auction.

$3,000 can sound like a lot to someone with no money, but names like that were going for 6 figures at their peak.

Professional domain sellers participate in the domain auctions on sites like NameJet & SnapNames. Big keywords like [payday loans] in core trusted extensions are not missed. So if the 98% decline in price were an anomaly, at least one of them would have bid more in that auction.

Why did exact match domains fall so hard? In part because Google shifted from scoring the web based on links to considering things like brand awareness in rankings. And it is very hard to run a large brand-oriented ad campaign promoting a generically descriptive domain name. Sure there are a few exceptions like Cars.com & Hotels.com, but if you watch much TV you’ll see a lot more ads associated with businesses that are not built on generically descriptive domain names.

Not all domains have fallen quite that hard in price, but the more into the tail you go the less the domain acts as a memorable differentiator. If the barrier to entry increases, then the justification for spending a lot on a domain name as part of a go to market strategy makes less sense.

Brandable Names Also Lose Value

Arguably EMDs have lost more value than brandable domain names, but even brandable names have sharply slid.

If you go back a decade or two tech startups would secure their name (say Snap.com or Monster.com or such) & then try to build a business on it.

But in the current marketplace with there being many paths to market, some startups don’t even have a domain name at launch, but begin as iPhone or Android apps.

Now people try to create success on a good enough, but cheap domain name & then as success comes they buy a better domain name.

Jelly was recently acquired by Pinterest. Rather than buying jelly.com they were still using AskJelly.com for their core site & Jelly.co for their blog.

As long as domain redirects work, there’s no reason to spend heavily on a domain name for a highly speculative new project.

Rather then spending 6 figures on a domain name & then seeing if there is market fit, it is far more common to launch a site on something like getapp.com, joinapp.com, app.io, app.co, businessnameapp.com, etc.

This in turn means that rather than 10,000s of startups all chasing their core .com domain name off the start, people test whatever is good enough & priced close to $10. Then only after they are successful do they try to upgrade to better, more memorable & far more expensive domain names.

Money isn’t spent on the domain names until the project has already shown market fit.

One in a thousand startups spending $1 million is less than one in three startups spending $100,000.

New TLDs Undifferentiated, Risky & Overpriced

No Actual Marketing Being Done

Some of the companies which are registries for new TLDs talk up investing in marketing & differentiation for the new TLDs, but very few of them are doing much on the marketing front.

You may see their banner ads on domainer blogs & they may even pay for placement with some of the registries, but there isn’t much going on in terms of cultivating a stable ecosystem.

When Google or Facebook try to enter & dominate a new vertical, the end destination may be extractive rent seeking by a monopoly BUT off the start they are at least willing to shoulder some of the risk & cost upfront to try to build awareness.

Where are the domain registries who have built successful new businesses on some of their new TLDs? Where are the subsidies offered to key talent to help drive awareness & promote the new strings?

As far as I know, none of that stuff exists.

In fact, what is prevalent is the exact opposite.

Greed-Based Anti-Marketing

So many of them are short sighted greed-based plays that they do the exact opposite of building an ecosystem … they hold back any domain which potentially might not be complete garbage so they can juice it for a premium ask price in the 10s of thousands of dollars.

While searching on GoDaddy Auctions for a client project I have seen new TLDs like .link listed for sale for MORE THAN the asking price of similar .org names.

If those prices had any sort of legitimate foundation then the person asking $30,000 for a .link would have bulk bought all the equivalent .net and .org names which are listed for cheaper prices.

But the prices are based on fantasy & almost nobody is dumb enough to pay those sorts of prices.

Anyone dumb enough to pay that would be better off buying their own registry rather than a single name.

The holding back of names is the exact opposite of savvy marketing investment. It means there’s no reason to use the new TLD if you either have to pay through the nose or use a really crappy name nobody will remember.

I didn’t buy more than 15 of Uniregistry’s domains because all names were reserved in the first place and I didn’t feel like buying 2nd tier domains … Domainers were angry when the first 2 Uniregistry’s New gTLDs (.sexy and .tattoo) came out and all remotely good names were reserved despite Frank saying that Uniregistry would not reserve any domains.

Who defeats the race to the bottom aspects of the web by starting off from a “we only sell shit” standpoint?

Nobody.

And that’s why these new TLDs are a zero.

Defaults Have Value

Many online verticals are driven by winner take most monopoly economics. There’s a clear dominant leader in each of these core markets: social, search, short-form video, long-form video, retail, auctions, real estate, job search, classifieds, etc. Some other core markets have consolidated down to 3 or 4 core players who among them own about 50 different brands that attack different parts of the market.

Almost all the category leading businesses which dominate aggregate usage are on .com domains.

Contrast the lack of marketing for new TLDs with all the marketing one sees for the .com domain name.

Local country code domain names & .com are not going anywhere. And both .org and .net are widely used & unlikely to face extreme price increases.

Hosing The Masses…

A decade ago domainers were frustrated Verisign increased the price of .com domains in ~ 5% increments:

Every mom, every pop, every company that holds a domain name had no say in the matter. ICANN basically said to Verisign: “We agree to let you hose the masses if you stop suing us”.

I don’t necessarily mind paying more for domains so much as I mind the money going to a monopolistic regulator which has historically had little regard for the registrants/registrars it should be serving

Those 5% or 10% shifts were considered “hosing the masses.”

Imagine what sort of blowback PIR would get from influential charities if they tried to increase the price of .org domains 30-fold overnight. It would be such a public relations disaster it would never be considered.

Domain registries are not particularly expensive to run. A person who has a number of them can run each of them for less than the cost of a full time employee – say $25,000 to $50,00 per year.

And yet, the very people who complained about Verisign’s benign price increases, monopolistic abuses & rent extraction are now pushing massive price hikes:

.Hosting and .juegos are going up from about $10-$20 retail to about $300. Other domains will also see price increases.
…
Here’s the thing with new TLD pricing: registry operators can increase prices as much as they want with just six months’ notice.
…
in its applications, Uniregistry said it planned to enter into a contractual agreement to not increase its prices for five years.

Why would anyone want to build a commercial enterprise (or anything they care about) on such a shoddy foundation?

If a person promises…

• no hold backs of premium domains, then reserves 10s of thousands of domains
• no price hikes for 5 years, then hikes prices
• the eventual price hikes being inline with inflation, then hikes prices 3,000%

That’s 3 strikes and the batter is out.

Doing the Math

The claim the new TLDs need more revenues to exist are untrue. Running an extension costs maybe $50,000 per year. If a registry operator wanted to build a vibrant & stable ecosystem the first step would be dumping the concept of premium domains to encourage wide usage & adoption.

There are hundreds of these new TLD extensions and almost none of them can be trusted to be a wise investment when compared against similar names in established extensions like .com, .net, .org & CCTLDs like .co.uk or .fr.

There’s no renewal price protection & there’s no need, especially as prices on the core TLDs have sharply come down.

Domain Pricing Trends

Aggregate stats are somewhat hard to come by as many deals are not reported publicly & many sites which aggregate sales data also list minimum prices.

However domains have lost value for many reasons

• declining SEO-related value due to the search results becoming over-run with ads (Google keeps increasing their ad clicks 20% to 30% year over year)
• broad market consolidation in key markets like travel, ecommerce, search & social
  • Google & Facebook are eating OVER 100% of online advertising growth – the rest of industry is shrinking in aggregate
  • are there any major news sites which haven’t struggled to monetize mobile?
  • there is a reason there are few great indy blogs compared to a decade ago
• rising technical costs in implementing independent websites (responsive design, HTTPS, AMP, etc.) “Closed platforms increase the chunk size of competition & increase the cost of market entry, so people who have good ideas, it is a lot more expensive for their productivity to be monetized. They also don’t like standardization … it looks like rent seeking behaviors on top of friction” – Gabe Newell
• harder to break into markets with brand-biased relevancy algorithms (increased chunk size of competition)
• less value in trying to build a brand on a generic name, which struggles to rank in a landscape of brand-biased algorithms (inability to differentiate while being generically descriptive)
• decline in PPC park page ad revenues
  • for many years Yahoo! hid the deterioration in their core business by relying heavily on partners for ad click volumes, but after they switched to leveraging Bing search, Microsoft was far more interested with click quality vs click quantity
  • absent the competitive bid from Yahoo!, Google drastically reduced partner payouts
  • most web browsers have replaced web address bars with dual function search boxes, drastically reducing direct navigation traffic

All the above are the mechanics of “why” prices have been dropping, but it is also worth noting many of the leading portfolios have been sold.

If the domain aftermarket is as vibrant as some people claim, there’s no way the Marchex portfolio of 200,000+ domains would have sold for only $28.1 million a couple years ago.

RegistrarStats shows .com registrations have stopped growing & other extensions like .net, .org, .biz & .info are now shrinking.

Both aftermarket domain prices & the pool of registered domains on established gTLDs are dropping.

I know I’ve dropped hundreds & hundreds of domains over the past year. That might be due to my cynical views of the market, but I did hold many names for a decade or more.

As barrier to entry increases, many of the legacy domains which could have one day been worth developing have lost much of their value.

And the picked over new TLDs are an even worse investment due to the near infinite downside potential of price hikes, registries outright folding, etc.

Into this face of declining value there is a rush of oversupply WITH irrational above-market pricing. And then the registries which spend next to nothing on marketing can’t understand why their great new namespaces went nowhere.

As much as I cringe at .biz & .info, I’d prefer either of them over just about any new TLD.

Any baggage they may carry is less than the risk of going with an unproven new extension without any protections whatsoever.

Losing Faith in the Zimbabwe Dollar

Who really loses is anyone who read what these domain registry operators wrote & trusted them.

Uniregistry does not believe that registry fees should rise when the costs of other technology services have uniformly trended downward, simply because a registry operator believes it can extract higher profit from its base of registrants.

How does one justify a 3000% price hike after stating “Our prices are fixed and only indexed to inflation after 5 years.”

Are they pricing these names in Zimbabwe Dollars? Or did they just change their minds in a way that hurt anyone who trusted them & invested in their ecosystem?

Frank Schilling warned about the dangers of lifting price controls

The combination of “presumptive renewal” and the “lifting of price controls on registry services” is incredibly dangerous.
Imagine buying a home, taking on a large mortgage, remodeling, moving in, only to be informed 6 months later that your property taxes will go up 10,000% with no better services offered by local government. The government doesn’t care if you can’t pay your tax/mortgage because they don’t really want you to pay your tax… they want you to abandon your home so they can take your property and resell it to a higher payer for more money, pocketing the difference themselves, leaving you with nothing.

This agreement as written leaves the door open to exactly that type of scenario

He didn’t believe the practice to be poor.

Rather he felt he would have been made poorer, unless he was the person doing it:

It would be the mother of all Internet tragedies and a crippling blow to ICANN’s relevance if millions of pioneering registrants were taxed out of their internet homes as a result of the greed of one registry and the benign neglect, apathy or tacit support of its master.

It is a highly nuanced position.

Imagine registering a domain for $10, building a business on it, and then learning the renewal fee will increase to hundreds of $ a year.— Elliot Silver (@DInvesting) March 7, 2017

There may be a couple exceptions which prove the rule, but new TLDs are generally an awful investment for everyone except the registry operator.

Here is the short version…

Imagine registering a domain for $10, building a business on it, and then learning the renewal fee will increase to hundreds of $ a year.— Elliot Silver (@DInvesting) March 7, 2017

And the long version…

Diminishing Returns

About a half-decade ago I wrote about how Google devalued domain names from an SEO perspective & there have been a number of leading “category killer” domains which have repeatedly been recycled from startup to acquisition to shut down to PPC park page to buy now for this once in a lifetime opportunity in an endless water cycle.

The central web platforms are becoming ad heavy, which in turn decreases the reach of anything which is not an advertisement. For the most valuable concepts / markets / keywords ads eat up the entire interface for the first screen full of results. Key markets like hotels might get a second round of vertical ads to further displace the concept of organic results.

It isn’t just gTLD’s that are stalled. ALL extensions are stalling. The demand by END USERS in 2017 is not what it was years ago. #Domains

— Rick Schwartz (@DomainKing) March 1, 2017

Proprietary, Closed-Ecosystem Roach Motels

The tech monopolies can only make so much money by stuffing ads onto their own platform. To keep increasing their take they need to increase the types, varieties & formats of media they host and control & keep the attention on their platform.

Both Google & Facebook are promoting scams where they feed on desperate publishers & suck a copy of the publisher’s content into being hosted by the tech monopoly platform de jour & sprinkle a share of the revenues back to the content sources.

They may even pay a bit upfront for new content formats, but then after the market is primed the deal shifts to where (once again) almost nobody other than the tech monopoly platform wins.

The attempt to “own” the web & never let users go is so extreme both companies will make up bogus statistics to promote their proprietary / fake open / actually closed standards.

If you ignore how Google’s AMP double, triple, or quadruple counts visitors in Google Analytics the visit numbers look appealing.

But the flip side of those fake metrics is actual revenues do not flow.

My own experience with amp is greatly reduced ad revenue. @Topheratl admits that weather dot com may be an anomaly in having higher ad $.— Marie Haynes (@Marie_Haynes) February 22, 2017

Facebook has the same sort of issues, with frequently needing to restate various metrics while partners fly blind.

These companies are restructuring society & the race to the bottom to try to make the numbers work in an increasingly unstable & parasitic set of platform choices is destroying adjacent markets:

Have you tried Angry Birds lately? It’s a swamp of dark patterns. All extractive logic meant to trick you into another in-app payment. It’s the perfect example of what happens when product managers have to squeeze ever-more-growth out of ever-less-fertile lands to hit their targets year after year. … back to the incentives. It’s not just those infused by venture capital timelines and return requirements, but also the likes of tax incentives favoring capital gains over income. … that’s the truly insidious part of the tech lords solution to everything. This fantasy that they will be greeted as liberators. When the new boss is really a lot like the old boss, except the big stick is replaced with the big algorithm. Depersonalizing all punishment but doling it out just the same. … this new world order is being driven by a tiny cabal of monopolies. So commercial dissent is near impossible. … competition is for the little people. Pitting one individual contractor against another in a race to the bottom. Hoarding all the bargaining power at the top. Disparaging any attempts against those at the bottom to organize with unions or otherwise.

To be a success on the attention platforms you have to push toward the edges. But as you become successful you become a target.

And the dehumanized “algorithm” is not above politics & public relations.

Pewdiepie is the biggest success story on the YouTube platform. When he made a video showing some of the absurd aspects of Fiverr it led to a WSJ investigation which “uncovered” a pattern of anti-semitism. And yet one of the reporters who worked on that story wrote far more offensive and anti-semetic tweets. The hypocrisy of the hit job didn’t matter. They still were able to go after Pewdiepie’s ad relationships to cut him off from Disney’s Maker Studios & the premium tier of YouTube ads.

The fact that he is an individual with broad reach means he’ll still be fine economically, but many other publishers would quickly end up in a death spiral from the above sequence.

If it can happen to a leading player in a closed ecosystem then the risk to smaller players is even greater.

In some emerging markets Facebook effectively *is* the Internet.

The Decline of Exact Match Domains

Domains have been so devalued (from an SEO perspective) that some names like PaydayLoans.net sell for about $3,000 at auction.

$3,000 can sound like a lot to someone with no money, but names like that were going for 6 figures at their peak.

Professional domain sellers participate in the domain auctions on sites like NameJet & SnapNames. Big keywords like [payday loans] in core trusted extensions are not missed. So if the 98% decline in price were an anomaly, at least one of them would have bid more in that auction.

Why did exact match domains fall so hard? In part because Google shifted from scoring the web based on links to considering things like brand awareness in rankings. And it is very hard to run a large brand-oriented ad campaign promoting a generically descriptive domain name. Sure there are a few exceptions like Cars.com & Hotels.com, but if you watch much TV you’ll see a lot more ads associated with businesses that are not built on generically descriptive domain names.

Not all domains have fallen quite that hard in price, but the more into the tail you go the less the domain acts as a memorable differentiator. If the barrier to entry increases, then the justification for spending a lot on a domain name as part of a go to market strategy makes less sense.

Brandable Names Also Lost Value

Arguably EMDs have lost more value than brandable domain names, but even brandable names have sharply slid.

If you go back a decade or two tech startups would secure their name (say Snap.com or Monster.com or such) & then try to build a business on it.

But in the current marketplace with there being many paths to market, some startups don’t even have a domain name at launch, but begin as iPhone or Android apps.

Now people try to create success on a good enough, but cheap domain name & then as success comes they buy a better domain name.

Jelly was recently acquired by Pinterest. Rather than buying jelly.com they were still using AskJelly.com for their core site & Jelly.co for their blog.

As long as domain redirects work, there’s no reason to spend heavily on a domain name for a highly speculative new project.

Rather than spending 6 figures on a domain name & then seeing if there is market fit, it is far more common to launch a site on something like getapp.com, joinapp.com, app.io, app.co, businessnameapp.com, etc.

This in turn means that rather than 10,000s of startups all chasing their core .com domain name off the start, people test whatever is good enough & priced close to $10. Then only after they are successful do they try to upgrade to better, more memorable & far more expensive domain names.

Money isn’t spent on the domain names until the project has already shown market fit.

One in a thousand startups spending $1 million is less than one in three startups spending $100,000.

New TLDs Undifferentiated, Risky & Overpriced

No Actual Marketing Being Done

Some of the companies which are registries for new TLDs talk up investing in marketing & differentiation for the new TLDs, but very few of them are doing much on the marketing front.

You may see their banner ads on domainer blogs & they may even pay for placement with some of the registries, but there isn’t much going on in terms of cultivating a stable ecosystem.

When Google or Facebook try to enter & dominate a new vertical, the end destination may be extractive rent seeking by a monopoly BUT off the start they are at least willing to shoulder some of the risk & cost upfront to try to build awareness.

Where are the domain registries who have built successful new businesses on some of their new TLDs? Where are the subsidies offered to key talent to help drive awareness & promote the new strings?

As far as I know, none of that stuff exists.

In fact, what is prevalent is the exact opposite.

Greed-Based Anti-Marketing

So many of them are short sighted greed-based plays that they do the exact opposite of building an ecosystem … they hold back any domain which potentially might not be complete garbage so they can juice it for a premium ask price in the 10s of thousands of dollars.

While searching on GoDaddy Auctions for a client project I have seen new TLDs like .link listed for sale for MORE THAN the asking price of similar .org names.

If those prices had any sort of legitimate foundation then the person asking $30,000 for a .link would have bulk bought all the equivalent .net and .org names which are listed for cheaper prices.

But the prices are based on fantasy & almost nobody is dumb enough to pay those sorts of prices.

Anyone dumb enough to pay that would be better off buying their own registry rather than a single name.

The holding back of names is the exact opposite of savvy marketing investment. It means there’s no reason to use the new TLD if you either have to pay through the nose or use a really crappy name nobody will remember.

I didn’t buy more than 15 of Uniregistry’s domains because all names were reserved in the first place and I didn’t feel like buying 2nd tier domains … Domainers were angry when the first 2 Uniregistry’s New gTLDs (.sexy and .tattoo) came out and all remotely good names were reserved despite Frank saying that Uniregistry would not reserve any domains.

Who defeats the race to the bottom aspects of the web by starting off from a “we only sell shit” standpoint?

Nobody.

And that’s why these new TLDs are a zero.

Defaults Have Value

Many online verticals are driven by winner take most monopoly economics. There’s a clear dominant leader in each of these core markets: social, search, short-form video, long-form video, e-commerce, auctions, real estate, job search, classifieds, etc. Some other core markets have consolidated down to 3 or 4 core players who among them own about 50 different brands that attack different parts of the market.

Almost all the category leading businesses which dominate aggregate usage are on .com domains.

Contrast the lack of marketing for new TLDs with all the marketing one sees for the .com domain name.

Local country code domain names & .com are not going anywhere. And both .org and .net are widely used & unlikely to face extreme price increases.

Hosing The Masses…

A decade ago domainers were frustrated Verisign increased the price of .com domains in ~ 5% increments:

Every mom, every pop, every company that holds a domain name had no say in the matter. ICANN basically said to Verisign: “We agree to let you hose the masses if you stop suing us”.

I don’t necessarily mind paying more for domains so much as I mind the money going to a monopolistic regulator which has historically had little regard for the registrants/registrars it should be serving

Those 5% or 10% shifts were considered “hosing the masses.”

Imagine what sort of blowback PIR would get from influential charities if they tried to increase the price of .org domains 30-fold overnight. It would be such a public relations disaster it would never be considered.

Domain registries are not particularly expensive to run. A person who has a number of them can run each of them for less than the cost of a full time employee – say $25,000 to $50,00 per year.

And yet, the very people who complained about Verisign’s benign price increases, monopolistic abuses & rent extraction are now pushing massive price hikes:

.Hosting and .juegos are going up from about $10-$20 retail to about $300. Other domains will also see price increases.
…
Here’s the thing with new TLD pricing: registry operators can increase prices as much as they want with just six months’ notice.
…
in its applications, Uniregistry said it planned to enter into a contractual agreement to not increase its prices for five years.

Why would anyone want to build a commercial enterprise (or anything they care about) on such a shoddy foundation?

If a person promises…

• no hold backs of premium domains, then reserves 10s of thousands of domains
• no price hikes for 5 years, then hikes prices
• the eventual price hikes being inline with inflation, then hikes prices 3,000%

That’s 3 strikes and the batter is out.

Doing the Math

The claim the new TLDs need more revenues to exist are untrue. Running an extension costs maybe $50,000 per year. If a registry operator wanted to build a vibrant & stable ecosystem the first step would be dumping the concept of premium domains to encourage wide usage & adoption.

There are hundreds of these new TLD extensions and almost none of them can be trusted to be a wise investment when compared against similar names in established extensions like .com, .net, .org & CCTLDs like .co.uk or .fr.

There’s no renewal price protection & there’s no need, especially as secondary market prices on the core TLDs have sharply come down.

Domain Pricing Trends

Aggregate stats are somewhat hard to come by as many deals are not reported publicly & many sites which aggregate sales data also list minimum prices.

However domains have lost value for many reasons

• declining SEO-related value due to the search results becoming over-run with ads (Google keeps increasing their ad clicks 20% to 30% year over year)
• broad market consolidation in key markets like travel, ecommerce, search & social
  • Google & Facebook are eating OVER 100% of online advertising growth – the rest of industry is shrinking in aggregate
  • are there any major news sites which haven’t struggled to monetize mobile?
  • there is a reason there are few great indy blogs compared to a decade ago
• rising technical costs in implementing independent websites (responsive design, HTTPS, AMP, etc.) “Closed platforms increase the chunk size of competition & increase the cost of market entry, so people who have good ideas, it is a lot more expensive for their productivity to be monetized. They also don’t like standardization … it looks like rent seeking behaviors on top of friction” – Gabe Newell
• harder to break into markets with brand-biased relevancy algorithms (increased chunk size of competition)
• less value in trying to build a brand on a generic name, which struggles to rank in a landscape of brand-biased algorithms (inability to differentiate while being generically descriptive)
• decline in PPC park page ad revenues
  • for many years Yahoo! hid the deterioration in their core business by relying heavily on partners for ad click volumes, but after they switched to leveraging Bing search, Microsoft was far more interested with click quality vs click quantity
  • absent the competitive bid from Yahoo!, Google drastically reduced partner payouts
  • most web browsers have replaced web address bars with dual function search boxes, drastically reducing direct navigation traffic

All the above are the mechanics of “why” prices have been dropping, but it is also worth noting many of the leading portfolios have been sold.

If the domain aftermarket is as vibrant as some people claim, there’s no way the Marchex portfolio of 200,000+ domains would have sold for only $28.1 million a couple years ago.

RegistrarStats shows .com registrations have stopped growing & other extensions like .net, .org, .biz & .info are now shrinking.

Both aftermarket domain prices & the pool of registered domains on established gTLDs are dropping.

I know I’ve dropped hundreds & hundreds of domains over the past year. That might be due to my cynical views of the market, but I did hold many names for a decade or more.

As barrier to entry increases, many of the legacy domains which could have one day been worth developing have lost much of their value.

And the picked over new TLDs are an even worse investment due to the near infinite downside potential of price hikes, registries outright folding, etc.

Most of the registration graphs for new TLDs are far uglier than the one posted above. China will not save the new gTLDs.

Looking at the chart as we have from over 300K to 65K red is the appropriate color; over 90% registered in China https://t.co/eJMHSwoTVV https://t.co/JlrJ7sMPc5

— The Domains (@thedomains) March 14, 2017

Into this face of declining value there is a rush of oversupply WITH irrational above-market pricing. And then the registries which spend next to nothing on marketing can’t understand why their great new namespaces went nowhere.

As much as I cringe at .biz & .info, I’d prefer either of them over just about any new TLD.

Any baggage they may carry is less than the risk of going with an unproven new extension without any protections whatsoever.

Losing Faith in the Zimbabwe Dollar

Who really loses is anyone who read what these domain registry operators wrote & trusted them.

Uniregistry does not believe that registry fees should rise when the costs of other technology services have uniformly trended downward, simply because a registry operator believes it can extract higher profit from its base of registrants.

How does one justify a 3000% price hike after stating “Our prices are fixed and only indexed to inflation after 5 years.”

Are they pricing these names in Zimbabwe Dollars? Or did they just change their minds in a way that hurt anyone who trusted them & invested in their ecosystem?

Frank Schilling warned about the dangers of lifting price controls

The combination of “presumptive renewal” and the “lifting of price controls on registry services” is incredibly dangerous.
Imagine buying a home, taking on a large mortgage, remodeling, moving in, only to be informed 6 months later that your property taxes will go up 10,000% with no better services offered by local government. The government doesn’t care if you can’t pay your tax/mortgage because they don’t really want you to pay your tax… they want you to abandon your home so they can take your property and resell it to a higher payer for more money, pocketing the difference themselves, leaving you with nothing.

This agreement as written leaves the door open to exactly that type of scenario

He didn’t believe the practice to be poor.

Rather he felt he would have been made poorer, unless he was the person doing it:

It would be the mother of all Internet tragedies and a crippling blow to ICANN’s relevance if millions of pioneering registrants were taxed out of their internet homes as a result of the greed of one registry and the benign neglect, apathy or tacit support of its master.

It is a highly nuanced position.

Imagine registering a domain for $10, building a business on it, and then learning the renewal fee will increase to hundreds of $ a year.— Elliot Silver (@DInvesting) March 7, 2017

Update: Shortly after the sharp pricing increases were announced GoDaddy dropped Uniregistry domain names.

When Compete.com launched with credits-based pricing well over a decade ago I felt like a kid in a candy store using their competitive research tool. Recently Compete.com announced they were shutting down, but many of the link analysis & competitive research tools which leverage scraping have also started licensing clickstream data from sources like Clickstre.am & JumpShot.

These sorts of features add a lot of value to traditional keyword tools, as they can highlight the CTR on ads vs organic results & show if people click on anything after they search for a particular term.

When I read Ahref’s recent blog post about integrating clickstream data I got that same kid in a candy store feeling I got when I first used Compete. Some highlights…

• their keyword database contains over 3 billion keywords
• they offer localized search volumes
• searches with clicks vs searches without clicks
• clicks per search
• repeat searches metric
• organic vs ad clicks

As an example of how the searches with clicks feature is helpful, consider Google’s recently announced RGB conversion feature

In that image you can see how the feature displaces the result set.

What’s cool about the Ahrefs feature is you can also see what sort of impact that feature has on click volumes.

After 1 month, 20% of the searches for [RGB to HEX] no longer had any clicks to an external website.

On the second month it looks like the “no click” rate was closer to 7%, so perhaps some of the initial additional search volume was driven by people searching for the related keywords after blogs covered the new feature.

But the nice thing about the feature is you can see how the click rate changes over time as the feature evolves.

In some areas like weather Google ends up dominating most the user behavior with their in-SERP feature.

About half of all weather keyword searches do not click on any listings. And then of those which do click, about 20% of people click on an ad.

That means the potential organic click volume for that keyword is only about 40% of the initial search volume estimates.

Search results keep getting more interactive features & some of them appear to be click black holes. Literally…

You guys, I’ve discovered a SERP black hole! I’m on #200 suggested PAA for this SERP?! Has anyone else seen an infinite PAA SERP before? pic.twitter.com/YgZDVWdWJ9— Britney Muller (@BritneyMuller) November 23, 2016

Here is a new item comparison feature table.

Has anyone ever seen this giant ‘vs’ featured snippet before? @STATrob @glenngabe @jenstar pic.twitter.com/qaKToKm5C4— Jesse Semchuck (@jessesem) November 22, 2016

As more of the value chain appears in the search results, more of the value chain which formerly appeared on websites disappears. This is true from a wide range of aspects including ad sales, content hosting, ad blocking & brand value.

General Ad Sales

No click into the publisher’s site means no ad revenue for the publisher. Voice search will only accelerate the declines seen from mobile, which shifted user attention away from large screens with many listings to smaller screens with fewer listings & a far higher ad ratio in the search results.

Facebook Instant Articles & Google AMP

Google has already pushed hard to make hotel searches a pay-to-play vertical & yet some publishers are adopting AMP formatting in that vertical. Google is also forcing AMP down publisher’s throats in other verticals like recipes.

@rustybrick New? pic.twitter.com/91TzKfS7tn— Jon Hogg (@ItsHogg) November 24, 2016

If central ad networks host your content then they get better user data for your content than you do as a publisher.

User Tracking, in Aggregate

Increased user tracking depresses premium ad sales & moves value from niche players to broad networks “Whether it’s a third party like Facebook or Google tracking across the web or an ISP leveraging its distribution arm, this is outside of consumer expectations. Importantly to the digital media industry, it also devalues the context and relationship of consumer trust which drives the businesses of premium publishers.”

Ad Blocking

Some large sites like Google or Facebook either pay ad blockers or technically work around them within their apps. By funding ad blockers exempting the search result page from having their ads blocked, Google is ultimately defunding competing ad networks.

Brand Value

As search results get noisier & more ad heavy, Google is trying to coerce brands into re-buying their pre-existing brand equity. These efforts are effective, as on some branded & navigational searches over half the click volume goes to the ads. Here are a few examples from Ahrefs. The orange bar shows what percent of the SERP clicks are on ads.

And the above doesn’t even account for…

• Google Maps being an ad-heavy search engine.
• the Google Trips app which prevent searches from happening on Google.
• The mid-tail of travel search on mobile where Google does away with the concept of organic search results.
• Direct booking features complementing traditional AdWords ads & hotel price ads.
• Google buying ITA Software to dominate flight search. Notice the most popular term is Google’s branded term & for the generic term [flights] 72% of people don’t click on any external site while 37% of the remaining 28% of searches click on an AdWords ad.
  
  And almost everyone else in that industry is stuck licensing flight data from Google, as they own ITA Software.

So Google is eating the generic terms, the brand terms, and the search query pool more broadly.

There’s a reason Google’s online travel business is over twice the size of anyone else & has their biggest advertisers seeking more sustainable & more legitimate alternatives.

The biggest travel players are accustomed to Google’s moves and trying their best to adjust and work around them. Missing from this story is the fact that Google’s latest moves are making it nearly impossible for all but the smallest number of consumer travel startups to succeed. — Dennis Schaal

And some of the aggressive stuff carries over into other lines of business outside of travel. Google is also testing large image extensions on AdWords ads on cell phones that don’t leave room for even a second AdWords listing on the screen. When one invests in brand they have to start thinking about how much they are willing to pay Google as an ongoing tithing for their success. Look at the following ads where a competitor bidding on a competing brand drives the brand owner’s official site below the fold.

Google is willing to make their results worse (to the point they would consider something that looked like their search result page as an ad-heavy doorway redirect page of spam if hosted by anyone other than themselves) in order to monetize navigational searches.

What’s more, you can’t just opt out & ignore. When brands make agreements to not cross-bid Google has the FTC sue them.

On some high end fashion brands Google lists shopping ads which lead to third party sellers who sell used goods. Quite often counterfeits will also be in the mix. When the counterfeits are destroyed in the first wash, it is the brand owner who was took to the cleaners.

But there’s a solution to that… they can pay Google ever-increasing protection.

@seobook sadly true. I work in the luxury fashion and CTR<15% for nav queries especially w/ sales, forced to buy own brand kw @andrealpar— Giuseppe Pastore (@Zen2Seo) November 26, 2016

Sections

• Just Make Great Content…
• Search Engine Engineering Fear
• Ignore The Eye Candy, It’s Poisoned
• Below The Fold = Out Of Mind
• Coercion Which Failed
• Embrace, Extend, Extinguish
• Dumb Pipes, Dumb Partnerships
• “User” Friendly
• The Numbers Can’t Work
• Mobile Search Index
• Tracking Users

Just Make Great Content…

Remember the whole shtick about good, legitimate, high-quality content being created for readers without concern for search engines – even as though search engines do not exist?

Whatever happened to that?

We quickly shifted from the above “ideology” to this:

The red triangle/exclamation point icon was arrived at after the Chrome team commissioned research around the world to figure out which symbols alarmed users the most.

Search Engine Engineering Fear

Google is explicitly spreading the message that they are doing testing on how to create maximum fear to try to manipulate & coerce the ecosystem to suit their needs & wants.

At the same time, the Google AMP project is being used as the foundation of effective phishing campaigns.

Scare users off of using HTTP sites AND host phishing campaigns.

Killer job Google.

Someone deserves a raise & some stock options. Unfortunately that person is in the PR team, not the product team.

Ignore The Eye Candy, It’s Poisoned

I’d like to tell you that I was preparing the launch of https://amp.secured.mobile.seobook.com but awareness of past ecosystem shifts makes me unwilling to make that move.

I see it as arbitrary hoop jumping not worth the pain.

If you are an undifferentiated publisher without much in the way of original thought, then jumping through the hoops make sense. But if you deeply care about a topic and put a lot of effort into knowing it well, there’s no reason to do the arbitrary hoop jumping.

Remember how mobilegeddon was going to be the biggest thing ever? Well I never updated our site layout here & we still outrank a company which raised & spent 10s of millions of dollars for core industry terms like [seo tools].

Though it is also worth noting that after factoring in increased ad load with small screen sizes & the scrape graph featured answer stuff, a #1 ranking no longer gets it done, as we are well below the fold on mobile.

   

Below the Fold = Out of Mind

In the above example I am not complaining about ranking #5 and wishing I ranked #2, but rather stating that ranking #1 organically has little to no actual value when it is a couple screens down the page.

Google indicated their interstitial penalty might apply to pop ups that appear on scroll, yet Google welcomes itself to installing a toxic enhanced version of the Diggbar at the top of AMP pages, which persistently eats 15% of the screen & can’t be dismissed. An attempt to dismiss the bar leads the person back to Google to click on another listing other than your site.

As bad as I may have made mobile search results appear earlier, I was perhaps being a little too kind. Google doesn’t even have mass adoption of AMP yet & they already have 4 AdWords ads in their mobile search results AND when you scroll down the page they are testing an ugly “back to top” button which outright blocks a user’s view of the organic search results.

What happens when Google suggests what people should read next as an overlay on your content & sells that as an ad unit where if you’re lucky you get a tiny taste of the revenues?

Is it worth doing anything that makes your desktop website worse in an attempt to try to rank a little higher on mobile devices?

Given the small screen size of phones & the heavy ad load, the answer is no.

I realize that optimizing a site design for mobile or desktop is not mutually exclusive. But it is an issue we will revisit later on in this post.

Coercion Which Failed

Many people new to SEO likely don’t remember the importance of using Google Checkout integration to lower AdWords ad pricing.

You either supported Google Checkout & got about a 10% CTR lift (& thus 10% reduction in click cost) or you failed to adopt it and got priced out of the market on the margin difference.

And if you chose to adopt it, the bad news was you were then spending yet again to undo it when the service was no longer worth running for Google.

How about when Google first started hyping HTTPS & publishers using AdSense saw their ad revenue crash because the ads were no longer anywhere near as relevant.

Oops.

Not like Google cared much, as it is their goal to shift as much of the ad spend as they can onto Google.com & YouTube.

Google is now testing product ads on YouTube.

It is not an accident that Google funds an ad blocker which allows ads to stream through on Google.com while leaving ads blocked across the rest of the web.

Android Pay might be worth integrating. But then it also might go away.

It could be like Google’s authorship. Hugely important & yet utterly trivial.
Faces help people trust the content.
Then they are distracting visual clutter that need expunged.
Then they once again re-appear but ONLY on the Google Home Service ad units.
They were once again good for users!!!

Neat how that works.

Embrace, Extend, Extinguish

Or it could be like Google Reader. A free service which defunded all competing products & then was shut down because it didn’t have a legitimate business model due to it being built explicitly to prevent competition. With the death of Google reader many blogs also slid into irrelevancy.

Their FeedBurner acquisition was icing on the cake.

Techdirt is known for generally being pro-Google & they recently summed up FeedBurner nicely:

Thanks, Google, For Fucking Over A Bunch Of Media Websites – Mike Masnick

Ultimately Google is a horrible business partner.

And they are an even worse one if there is no formal contract.

Dumb Pipes, Dumb Partnerships

They tried their best to force broadband providers to be dumb pipes. At the same time they promoted regulation which will prevent broadband providers from tracking their own users the way that Google does, all the while broadening out Google’s privacy policy to allow personally identifiable web tracking across their network. Once Google knew they would retain an indefinite tracking advantage over broadband providers they were free to rescind their (heavily marketed) free tier of Google Fiber & they halted the Google Fiber build out.

When Google routinely acts so anti-competitive & abusive it is no surprise that some of the “standards” they propose go nowhere.

You can only get screwed so many times before you adopt a spirit of ambivalence to the avarice.

Google is the type of “partner” that conducts security opposition research on their leading distribution partner, while conveniently ignoring nearly a billion OTHER Android phones with existing security issues that Google can’t be bothered with patching.

Deliberately screwing direct business partners is far worse than coding algorithms which belligerently penalize some competing services all the while ignoring that the payday loan shop funded by Google leverages doorway pages.

“User” Friendly

BackChannel recently published an article foaming at the mouth promoting the excitement of Google’s AI:

This 2016-to-2017 Transition is going to move us from systems that are explicitly taught to ones that implicitly learn.” … the engineers might make up a rule to test against—for instance, that “usual” might mean a place within a 10-minute drive that you visited three times in the last six months. “It almost doesn’t matter what it is — just make up some rule,” says Huffman. “The machine learning starts after that.

The part of the article I found most interesting was the following bit:

After three years, Google had a sufficient supply of phonemes that it could begin doing things like voice dictation. So it discontinued the [phone information] service.

Google launches “free” services with an ulterior data motive & then when it suits their needs, they’ll shut it off and leave users in the cold.

As Google keeps advancing their AI, what do you think happens to your AMP content they are hosting? How much do they squeeze down on your payout percentage on those pages? How long until the AI is used to recap / rewrite content? What ad revenue do you get when Google offers voice answers pulled from your content but sends you no visitor?

The Numbers Can’t Work

A recent Wall Street Journal article highlighting the fast ad revenue growth at Google & Facebook also mentioned how the broader online advertising ecosystem was doing:

Facebook and Google together garnered 68% of spending on U.S. online advertising in the second quarter—accounting for all the growth, Mr. Wieser said. When excluding those two companies, revenue generated by other players in the U.S. digital ad market shrank 5%

The issue is NOT that online advertising has stalled, but rather that Google & Facebook have choked off their partners from tasting any of the revenue growth. This problem will only get worse as mobile grows to a larger share of total online advertising:

By 2018, nearly three-quarters of Google’s net ad revenues worldwide will come from mobile internet ad placements. – eMarketer

Media companies keep trusting these platforms with greater influence over their business & these platforms keep screwing those same businesses repeatedly.

You pay to get likes, but that is no longer enough as edgerank declines. Thanks for adopting Instant Articles, but users would rather see live videos & read posts from their friends. You are welcome to pay once again to advertise to the following you already built. The bigger your audience, the more we will charge you! Oh, and your direct competitors can use people liking your business as an ad targeting group.

Worse yet, Facebook & Google are even partnering on core Internet infrastructure.

In his interview with Obama tonight, @billmaher suggested the news business should be not-for-profit. Mission accomplished, thank Facebook.— Downtown Josh Brown (@ReformedBroker) November 5, 2016

Any hope of AMP turning the corner on the revenue front is a “no go”:

“We want to drive the ecosystem forward, but obviously these things don’t happen overnight,” Mr. Gingras said. “The objective of AMP is to have it drive more revenue for publishers than non-AMP pages. We’re not there yet”.

Publishers who are critical of AMP were reluctant to speak publicly about their frustrations, or to remove their AMP content. One executive said he would not comment on the record for fear that Google might “turn some knob that hurts the company.”

Look at that.

Leadership through fear once again.

At least they are consistent.

As more publishers adopt AMP, each publisher in the program will get a smaller share of the overall pie.

Just look at Google’s quarterly results for their current partners. They keep showing Google growing their ad clicks at 20% to 40% while partners oscillate between -15% and +5% quarter after quarter, year after year.

In the past quarter Google grew their ad clicks 42% YoY by pushing a bunch of YouTube auto play video ads, faster search growth in third world markets with cheaper ad prices, driving a bunch of lower quality mobile search ad clicks (with 3 then 4 ads on mobile) & increasing the percent of ad clicks on “own brand” terms (while sending the FTC after anyone who agrees to not cross bid on competitor’s brands).

The lower quality video ads & mobile ads in turn drove their average CPC on their sites down 13% YoY.

The partner network is relatively squeezed out on mobile, which makes it shocking to see the partner CPC off more than core Google, with a 14% YoY decline.

What ends up happening is eventually the media outlets get sufficiently defunded to where they are sold for a song to a tech company or an executive at a tech company. Alibaba buying SCMP is akin to Jeff Bezos buying The Washington Post.

The Wall Street Journal recently laid off reporters. The New York Times announced they were cutting back local cultural & crime coverage.

If news organizations of that caliber can’t get the numbers to work then the system has failed.

The Guardian is literally incinerating over 5 million pounds per month. ABC is staging fake crime scenes (that’s one way to get an exclusive).

The Tribune Company, already through bankruptcy & perhaps the dumbest of the lot, plans to publish thousands of AI assisted auto-play videos in their articles every day. That will guarantee their user experience on their owned & operated sites is worse than just about anywhere else their content gets distributed to, which in turn means they are not only competing against themselves but they are making their own site absolutely redundant & a chore to use.

That the Denver Guardian (an utterly fake paper running fearmongering false stories) goes viral is just icing on the cake.

Look at this brazen, amazing garbage. Facebook has become the world’s leading distributor of lies.https://t.co/oueWUiydJO— Matt Pearce (@mattdpearce) November 6, 2016

many Facebook users wish to connect with people and things that confirm their pre-existing opinions, whether or not they are true. … Giving people what they want to see will always draw more attention than making them work for it, in rather the same way that making up news is cheaper and more profitable than actually reporting the truth. – Ben Thompson

These tech companies are literally reshaping society & are sucking the life out of the economy, destroying adjacent markets & bulldozing regulatory concerns, all while offloading costs onto everyone else around them.

The crumbling of the American dream is a purple problem, obscured by solely red or solely blue lenses. Its economic and cultural roots are entangled, a mixture of government, private sector, community and personal failings. But the deepest root is our radically shriveled sense of “we.” … Until we treat the millions of kids across America as our own kids, we will pay a major economic price, and talk of the American dream will increasingly seem cynical historical fiction.

And the solution to killing the middle class, is, of course, to kill the middle class:

“We are going to raise taxes on the middle class” -Hillary Clinton #NeverHilla… (Vine by @USAforTrump2016) https://t.co/veEiZnfbkH— JKO (@jko417) November 6, 2016

An FTC report recommended suing Google for their anti-competitive practices, but no suit was brought. The US Copyright Office Register was relieved of her job after she went against Google’s views on set top boxes. Years ago many people saw where this was headed:

“This is a major affront to copyright,” said songwriter and music publisher Dean Kay. “Google seems to be taking over the world – and politics … Their major position is to allow themselves to use copyright material without remuneration. If the Copyright Office head is towing the Google line, creators are going to get hurt.”
…
Singer Don Henley said Pallante’s ouster was “an enormous blow” to artists. “She was a champion of copyright and stood up for the creative community, which is one of the things that got her fired,” he said. … [Pallante’s replacement] Hayden “has a long track record of being an activist librarian who is anti-copyright and a librarian who worked at places funded by Google.”

And in spite of the growing importance of tech media coverage of the industry is a trainwreck:

This is what it’s like to be a technology reporter in 2016. Freebies are everywhere, but real access is scant. Powerful companies like Facebook and Google are major distributors of journalistic work, meaning newsrooms increasingly rely on tech giants to reach readers, a relationship that’s awkward at best and potentially disastrous at worst.

Being a conduit breeds exclusives. Challenging the grand narrative gets one blackballed.

Mobile Search Index

Google announced they are releasing a mobile first search index:

Although our search index will continue to be a single index of websites and apps, our algorithms will eventually primarily use the mobile version of a site’s content to rank pages from that site, to understand structured data, and to show snippets from those pages in our results. Of course, while our index will be built from mobile documents, we’re going to continue to build a great search experience for all users, whether they come from mobile or desktop devices.

There are some forms of content that simply don’t work well on a 350 pixel wide screen, unless they use a pinch to zoom format. But using that format is seen as not being mobile friendly.

Imagine you have an auto part database which lists alternate part numbers, price, stock status, nearest store with part in stock, time to delivery, etc. … it is exceptionally hard to get that information to look good on a mobile device. And good luck if you want to add sorting features on such a table.

The theory that using the desktop version of a page to rank mobile results is flawed because users might find something which is only available on the desktop version of a site is a valid point. BUT, at the same time, a publisher may need to simplify the mobile site & hide data to improve usability on small screens & then only allow certain data to become visible through user interactions. Not showing those automotive part databases to desktop users would ultimately make desktop search results worse for users by leaving huge gaps in the search results. And a search engine choosing to not index the desktop version of a site because there is a mobile version is equally short sighted. Desktop users would no longer be able to find & compare information from those automotive parts databases.

Once again money drives search “relevancy” signals.

Since Google will soon make 3/4 of their ad revenues on mobile that should be the primary view of the web for everyone else & alternate versions of sites which are not mobile friendly should be disappeared from the search index if a crappier lite mobile-friendly version of the page is available.

Amazon converts well on mobile in part because people already trust Amazon & already have an account registered with them. Most other merchants won’t be able to convert at anywhere near as well of a rate on mobile as they do on desktop, so if you have to choose between having a mobile friendly version that leaves differentiated aspects hidden or a destkop friendly version that is differentiated & establishes a relationship with the consumer, the deeper & more engaging desktop version is the way to go.

The heavy ad load on mobile search results only further combine with the low conversion rates on mobile to make building a relationship on desktop that much more important.

Even TripAdvisor is struggling to monetize mobile traffic, monetizing it at only about 30% to 33% the rate they monetize desktop & tablet traffic. Google already owns most the profits from that market.

Webmasters are better off NOT going mobile friendly than going mobile friendly in a way that compromises the ability of their desktop site.

Mobile-first: with ONLY a desktop site you’ll still be in the results & be findable. Recall how mobilegeddon didn’t send anyone to oblivion?— Gary Illyes (@methode) November 6, 2016

I am not the only one suggesting an over-simplified mobile design that carries over to a desktop site is a losing proposition. Consider Nielsen Norman Group’s take:

in the current world of responsive design, we’ve seen a trend towards insufficient information density and simplifying sites so that they work well on small screens but suboptimally on big screens.

Tracking Users

Publishers are getting squeezed to subsidize the primary web ad networks. But the narrative is that as cross-device tracking improves some of those benefits will eventually spill back out into the partner network.

I am rather skeptical of that theory.

Facebook already makes 84% of their ad revenue from mobile devices where they have great user data.

They are paying to bring new types of content onto their platform, but they are only just now beginning to get around to test pricing their Audience Network traffic based on quality.

Priorities are based on business goals and objectives.

Both Google & Facebook paid fines & faced public backlash for how they track users. Those tracking programs were considered high priority.

When these ad networks are strong & growing quickly they may be able to take a stand, but when growth slows the stock prices crumble, data security becomes less important during downsizing when morale is shattered & talent flees. Further, creating alternative revenue streams becomes vital “to save the company” even if it means selling user data to dangerous dictators.

The other big risk of such tracking is how data can be used by other parties.

Spooks preferred to use the Google cookie to spy on users. And now Google allows personally identifiable web tracking.

Data is being used in all sorts of crazy ways the central ad networks are utterly unaware of. These crazy policies are not limited to other countries. Buying dog food with your credit card can lead to pet licensing fees. Even cheerful “wellness” programs may come with surprises.

Want to see what the future looks like?

For starters…

About 2 months ago I saw a Facebook post done on behalf of a friend of mine. Gofundme was the plea. Her insurance wouldn’t cover her treatment for a recurring breast cancer and doctors wouldn’t start the treatment unless the full payment was secured in a advance. Really? Really. She was gainfully employed, had a full time, well paying job. But guess what? It wasn’t enough although hundreds of people donated.

This last week she died. She was 38 years old. She died not getting access to a treatment that may or may not have saved her life. She died having to hustle folks for funds to just have a chance to get access to another treatment option and she died while worrying about being financially ruined by her illness. Just horrid.

Is this the society we want? People forced to beg friends on gofundme for help so they can get access to medical treatment? Is this the society we are? Is this truly the best we can do?

Click here to read more.

Sections

• Just Make Great Content…
• Search Engine Engineering Fear
• Ignore The Eye Candy, It’s Poisoned
• Below The Fold = Out Of Mind
• Coercion Which Failed
• Embrace, Extend, Extinguish
• Dumb Pipes, Dumb Partnerships
• “User” Friendly
• The Numbers Can’t Work
• Mobile Search Index
• Tracking Users

Just Make Great Content…

Remember the whole shtick about good, legitimate, high-quality content being created for readers without concern for search engines – even as though search engines do not exist?

Whatever happened to that?

We quickly shifted from the above “ideology” to this:

The red triangle/exclamation point icon was arrived at after the Chrome team commissioned research around the world to figure out which symbols alarmed users the most.

Search Engine Engineering Fear

Google is explicitly spreading the message that they are doing testing on how to create maximum fear to try to manipulate & coerce the ecosystem to suit their needs & wants.

At the same time, the Google AMP project is being used as the foundation of effective phishing campaigns.

Scare users off of using HTTP sites AND host phishing campaigns.

Killer job Google.

Someone deserves a raise & some stock options. Unfortunately that person is in the PR team, not the product team.

Ignore The Eye Candy, It’s Poisoned

I’d like to tell you that I was preparing the launch of https://amp.secured.mobile.seobook.com but awareness of past ecosystem shifts makes me unwilling to make that move.

I see it as arbitrary hoop jumping not worth the pain.

If you are an undifferentiated publisher without much in the way of original thought, then jumping through the hoops make sense. But if you deeply care about a topic and put a lot of effort into knowing it well, there’s no reason to do the arbitrary hoop jumping.

Remember how mobilegeddon was going to be the biggest thing ever? Well I never updated our site layout here & we still outrank a company which raised & spent 10s of millions of dollars for core industry terms like [seo tools].

Though it is also worth noting that after factoring in increased ad load with small screen sizes & the scrape graph featured answer stuff, a #1 ranking no longer gets it done, as we are well below the fold on mobile.

   

Below the Fold = Out of Mind

In the above example I am not complaining about ranking #5 and wishing I ranked #2, but rather stating that ranking #1 organically has little to no actual value when it is a couple screens down the page.

Google indicated their interstitial penalty might apply to pop ups that appear on scroll, yet Google welcomes itself to installing a toxic enhanced version of the Diggbar at the top of AMP pages, which persistently eats 15% of the screen & can’t be dismissed. An attempt to dismiss the bar leads the person back to Google to click on another listing other than your site.

As bad as I may have made mobile search results appear earlier, I was perhaps being a little to kind. Google doesn’t even have mass adoption of AMP yet & they already have 4 AdWords ads in their mobile search results AND when you scroll down the page they are testing an ugly “back to top” button which outright blocks a user’s view of the organic search results.

What happens when Google suggests what people should read next as an overlay on your content & sells that as an ad unit where if you’re lucky you get a tiny taste of the revenues?

Is it worth doing anything that makes your desktop website worse in an attempt to try to rank a little higher on mobile devices?

Given the small screen size of phones & the heavy ad load, the answer is no.

I realize that optimizing a site design for mobile or desktop is not mutually exclusive. But it is an issue we will revisit later on in this post.

Coercion Which Failed

Many people new to SEO likely don’t remember the importance of using Google Checkout integration to lower AdWords ad pricing.

You either supported Google Checkout & got about a 10% CTR lift (& thus 10% reduction in click cost) or you failed to adopt it and got priced out of the market on the margin difference.

And if you chose to adopt it, the bad news was you were then spending yet again to undo it when the service was no longer worth running for Google.

How about when Google first started hyping HTTPS & publishers using AdSense saw their ad revenue crash because the ads were no longer anywhere near as relevant.

Oops.

Not like Google cared much, as it is their goal to shift as much of the ad spend as they can onto Google.com & YouTube.

Google is now testing product ads on YouTube.

It is not an accident that Google funds an ad blocker which allows ads to stream through on Google.com while leaving ads blocked across the rest of the web.

Android Pay might be worth integrating. But then it also might go away.

It could be like Google’s authorship. Hugely important & yet utterly trivial.
Faces help people trust the content.
Then they are distracting visual clutter that need expunged.
Then they once again re-appear but ONLY on the Google Home Service ad units.
They were once again good for users!!!

Neat how that works.

Embrace, Extend, Extinguish

Or it could be like Google Reader. A free service which defunded all competing products & then was shut down because it didn’t have a legitimate business model due to it being built explicitly to prevent competition. With the death of Google reader many blogs also slid into irrelevancy.

Their FeedBurner acquisition was icing on the cake.

Techdirt is known for generally being pro-Google & they recently summed up FeedBurner nicely:

Thanks, Google, For Fucking Over A Bunch Of Media Websites – Mike Masnick

Ultimately Google is a horrible business partner.

And they are an even worse one if there is no formal contract.

Dumb Pipes, Dumb Partnerships

They tried their best to force broadband providers to be dumb pipes. At the same time they promoted regulation which will prevent broadband providers from tracking their own users the way that Google does, all the while broadening out Google’s privacy policy to allow personally identifiable web tracking across their network. Once Google knew they would retain an indefinite tracking advantage over broadband providers they were free to rescind their (heavily marketed) free tier of Google Fiber & they halted the Google Fiber build out.

When Google routinely acts so anti-competitive & abusive it is no surprise that some of the “standards” they propose go nowhere.

You can only get screwed so many times before you adopt a spirit of ambivalence to the avarice.

Google is the type of “partner” that conducts security opposition research on their leading distribution partner, while conveniently ignoring nearly a billion OTHER Android phones with existing security issues that Google can’t be bothered with patching.

Deliberately screwing direct business partners is far worse than coding algorithms which belligerently penalize some competing services all the while ignoring that the payday loan shop funded by Google leverages doorway pages.

“User” Friendly

BackChannel recently published an article foaming at the mouth promoting the excitement of Google’s AI:

This 2016-to-2017 Transition is going to move us from systems that are explicitly taught to ones that implicitly learn.” … the engineers might make up a rule to test against—for instance, that “usual” might mean a place within a 10-minute drive that you visited three times in the last six months. “It almost doesn’t matter what it is — just make up some rule,” says Huffman. “The machine learning starts after that.

The part of the article I found most interesting was the following bit:

After three years, Google had a sufficient supply of phonemes that it could begin doing things like voice dictation. So it discontinued the [phone information] service.

Google launches “free” services with an ulterior data motive & then when it suits their needs, they’ll shut it off and leave users in the cold.

As Google keeps advancing their AI, what do you think happens to your AMP content they are hosting? How much do they squeeze down on your payout percentage on those pages? How long until the AI is used to recap / rewrite content? What ad revenue do you get when Google offers voice answers pulled from your content but sends you no visitor?

The Numbers Can’t Work

A recent Wall Street Journal article highlighting the fast ad revenue growth at Google & Facebook also mentioned how the broader online advertising ecosystem was doing:

Facebook and Google together garnered 68% of spending on U.S. online advertising in the second quarter—accounting for all the growth, Mr. Wieser said. When excluding those two companies, revenue generated by other players in the U.S. digital ad market shrank 5%

The issue is NOT that online advertising has stalled, but rather that Google & Facebook have choked off their partners from tasting any of the revenue growth. This problem will only get worse as mobile grows to a larger share of total online advertising:

By 2018, nearly three-quarters of Google’s net ad revenues worldwide will come from mobile internet ad placements. – eMarketer

Media companies keep trusting these platforms with greater influence over their business & these platforms keep screwing those same businesses repeatedly.

You pay to get likes, but that is no longer enough as edgerank declines. Thanks for adopting Instant Articles, but users would rather see live videos & read posts from their friends. You are welcome to pay once again to advertise to the following you already built. The bigger your audience, the more we will charge you! Oh, and your direct competitors can use people liking your business as an ad targeting group.

Worse yet, Facebook & Google are even partnering on core Internet infrastructure.

In his interview with Obama tonight, @billmaher suggested the news business should be not-for-profit. Mission accomplished, thank Facebook.— Downtown Josh Brown (@ReformedBroker) November 5, 2016

Any hope of AMP turning the corner on the revenue front is a “no go”:

“We want to drive the ecosystem forward, but obviously these things don’t happen overnight,” Mr. Gingras said. “The objective of AMP is to have it drive more revenue for publishers than non-AMP pages. We’re not there yet”.

Publishers who are critical of AMP were reluctant to speak publicly about their frustrations, or to remove their AMP content. One executive said he would not comment on the record for fear that Google might “turn some knob that hurts the company.”

Look at that.

Leadership through fear once again.

At least they are consistent.

As more publishers adopt AMP, each publisher in the program will get a smaller share of the overall pie.

Just look at Google’s quarterly results for their current partners. They keep showing Google growing their ad clicks at 20% to 40% while partners oscillate between -15% and +5% quarter after quarter, year after year.

In the past quarter Google grew their ad clicks 42% YoY by pushing a bunch of YouTube auto play video ads, faster search growth in third world markets with cheaper ad prices, driving a bunch of lower quality mobile search ad clicks (with 3 then 4 ads on mobile) & increasing the percent of ad clicks on “own brand” terms (while sending the FTC after anyone who agrees to not cross bid on competitor’s brands).

The lower quality video ads & mobile ads in turn drove their average CPC on their sites down 13% YoY.

The partner network is relatively squeezed out on mobile, which makes it shocking to see the partner CPC off more than core Google, with a 14% YoY decline.

What ends up happening is eventually the media outlets get sufficiently defunded to where they are sold for a song to a tech company or an executive at a tech company. Alibaba buying SCMP is akin to Jeff Bezos buying The Washington Post.

The Wall Street Journal recently laid off reporters. The New York Times announced they were cutting back local cultural & crime coverage.

If news organizations of that caliber can’t get the numbers to work then the system has failed.

The Guardian is literally incinerating over 5 million pounds per month. ABC is staging fake crime scenes (that’s one way to get an exclusive).

The Tribune Company, already through bankruptcy & perhaps the dumbest of the lot, plans to publish thousands of AI assisted auto-play videos in their articles every day. That will guarantee their user experience on their owned & operated sites is worse than just about anywhere else their content gets distributed to, which in turn means they are not only competing against themselves but they are making their own site absolutely redundant & a chore to use.

That the Denver Guardian (an utterly fake paper running fearmongering false stories) goes viral is just icing on the cake.

Look at this brazen, amazing garbage. Facebook has become the world’s leading distributor of lies.https://t.co/oueWUiydJO— Matt Pearce (@mattdpearce) November 6, 2016

These tech companies are literally reshaping society & are sucking the life out of the economy, destroying adjacent markets & bulldozing regulatory concerns, all while offloading costs onto everyone else around them.

“We are going to raise taxes on the middle class” -Hillary Clinton #NeverHilla… (Vine by @USAforTrump2016) https://t.co/veEiZnfbkH— JKO (@jko417) November 6, 2016

An FTC report recommended suing Google for their anti-competitive practices, but no suit was brought. The US Copyright Office Register was relieved of her job after she went against Google’s views on set top boxes.

And in spite of the growing importance of tech media coverage of the industry is a trainwreck:

This is what it’s like to be a technology reporter in 2016. Freebies are everywhere, but real access is scant. Powerful companies like Facebook and Google are major distributors of journalistic work, meaning newsrooms increasingly rely on tech giants to reach readers, a relationship that’s awkward at best and potentially disastrous at worst.

Being a conduit breeds exclusives. Challenging the grand narrative gets one blackballed.

Mobile Search Index

Google announced they are releasing a mobile first search index:

Although our search index will continue to be a single index of websites and apps, our algorithms will eventually primarily use the mobile version of a site’s content to rank pages from that site, to understand structured data, and to show snippets from those pages in our results. Of course, while our index will be built from mobile documents, we’re going to continue to build a great search experience for all users, whether they come from mobile or desktop devices.

There are some forms of content that simply don’t work well on a 350 pixel wide screen, unless they use a pinch to zoom format. But using that format is seen as not being mobile friendly.

Imagine you have an auto part database which lists alternate part numbers, price, stock status, nearest store with part in stock, time to delivery, etc. … it is exceptionally hard to get that information to look good on a mobile device. And good luck if you want to add sorting features on such a table.

The theory that using the desktop version of a page to rank mobile results is flawed because users might find something which is only available on the desktop version of a site is a valid point. BUT, at the same time, a publisher may need to simplify the mobile site & hide data to improve usability on small screens & then only allow certain data to become visible through user interactions. Not showing those automotive part databases to desktop users would ultimately make desktop search results worse for users by leaving huge gaps in the search results. And a search engine choosing to not index the desktop version of a site because there is a mobile version is equally short sighted. Desktop users would no longer be able to find & compare information from those automotive parts databases.

Once again money drives search “relevancy” signals.

Since Google will soon make 3/4 of their ad revenues on mobile that should be the primary view of the web for everyone else & alternate versions of sites which are not mobile friendly should be disappeared from the search index if a crappier lite mobile-friendly version of the page is available.

Amazon converts well on mobile in part because people already trust Amazon & already have an account registered with them. Most other merchants won’t be able to convert at anywhere near as well of a rate on mobile as they do on desktop, so if you have to choose between having a mobile friendly version that leaves differentiated aspects hidden or a destkop friendly version that is differentiated & establishes a relationship with the consumer, the deeper & more engaging desktop version is the way to go.

The heavy ad load on mobile search results only further combine with the low conversion rates on mobile to make building a relationship on desktop that much more important.

Even TripAdvisor is struggling to monetize mobile traffic, monetizing it at only about 30% to 33% the rate they monetize desktop & tablet traffic. Google already owns most the profits from that market.

Webmasters are better off NOT going mobile friendly than going mobile friendly in a way that compromises the ability of their desktop site.

Mobile-first: with ONLY a desktop site you’ll still be in the results & be findable. Recall how mobilegeddon didn’t send anyone to oblivion?— Gary Illyes (@methode) November 6, 2016

I am not the only one suggesting an over-simplified mobile design that carries over to a desktop site is a losing proposition. Consider Nielsen Norman Group’s take:

in the current world of responsive design, we’ve seen a trend towards insufficient information density and simplifying sites so that they work well on small screens but suboptimally on big screens.

Tracking Users

Publishers are getting squeezed to subsidize the primary web ad networks. But the narrative is that as cross-device tracking improves some of those benefits will eventually spill back out into the partner network.

I am rather skeptical of that theory.

Facebook already makes 84% of their ad revenue from mobile devices where they have great user data.

They are paying to bring new types of content onto their platform, but they are only just now beginning to get around to test pricing their Audience Network traffic based on quality.

Priorities are based on business goals and objectives.

Both Google & Facebook paid fines & faced public backlash for how they track users. Those tracking programs were considered high priority.

When these ad networks are strong & growing quickly they may be able to take a stand, but when growth slows the stock prices crumble, data security becomes less important during downsizing when morale is shattered & talent flees. Further, creating alternative revenue streams becomes vital “to save the company” even if it means selling user data to dangerous dictators.

The other big risk of such tracking is how data can be used by other parties.

Spooks preferred to use the Google cookie to spy on users. And now Google allows personally identifiable web tracking.

Data is being used in all sorts of crazy ways the central ad networks are utterly unaware of. These crazy policies are not limited to other countries. Buying dog food with your credit card can lead to pet licensing fees. Even cheerful “wellness” programs may come with surprises.