"All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth." - Friedrich Nietzsche

Everyone Except Me Should be Open

Being labeled as open or transparent is a great public relations strategy. Executed effectively it gets ditto heads to feel like they are part of a movement and spread your propaganda.

However actually being transparent is often a poor business strategy.

When WordAds opened up someone in the comments suggested that they should win by being open like Google. I read that and laughed. Where Google is losing you can count on them pushing the open label in order to build momentum & destroy the asymmetrical information advantages of existing market leaders. But where Google leads non-transparency is the norm.

A few examples & comparisons:

• Claiming to run an open auction, while running obfuscated quality metrics that price gouge advertisers.
• At the same time Google is trying to push social sites to offer transparent data, they decided to block some Google search referral data (unless you are paying for the clicks, then you get that data).
• When planning some of the features behind Google+ one of their employees wrote a book about the social circles concept with Google's blessings. Then, after he wrote the book, Google revoked permission to publish it!
• Nuking affiliate links of some websites & then investing in Viglink, a network that automatically turns links into affiliate links.
• Burning some networks of websites for being doorway pages & then investing in the Whaleshark Media roll up & launching Google Places.
• Nuking some UK financial comparison sites for link buying & then buying BeatThatQuote.
• Suggesting 60 or 90 days of penalty is a reasonable penalty for sketchy links & allowing BeatThatQuote to rank 2 weeks after penalizing it without cleaning up any of the paid links.
• Android is open but internal Google emails revealed that carriers were getting wise to Google using compatibility as a club.
• Not sharing revenue share stats with AdSense partners for a half-decade.
• When websites are nuked they are frequently given no explanation. Worse yet, their content often re-appears in the search results on some other domain that stole it, in many cases while being wrapped in AdSense ads.
• Arbitrarily making it hard to export AdWords campaigns to other services (& making it against the TOS to do same via the API).
• The Panda update was needed to rid the web of garbage content. And yet Google is pre-paying Demand Media to post videos on YouTube. Since the Panda update downstream Google traffic to YouTube has more than doubled & YouTube is serving over a trillion streams per year!
• In spite of not having permission to do so, Google has been scanning books for nearly a decade now. Yet whenever Google goes to court they try to get the court documents sealed so that their statements couldn't be used against them.

Judge, Jury, Executioner

Calls for "transparency" in SEO may sound great on their face, but once you peal back the covers the absurdity is laughable. If Google didn't discriminate against certain types of players & if Google didn't compete in the very markets that it judges then perhaps transparency would be a good idea.

However Google is perhaps the single biggest direct competitor in many markets, so to be fully transparent with them when they are the opposite with you is a naive business strategy:

I also disagree that outing each other would make the industry less like a mafia, because SEOs aren't the mafia. SEO is a symbiotic marketing channel reliant on Google, until the next big search engine/method comes along. In a mafioso analogy, Google would be the mafia - as they control the market. Removing all webspam wouldn't necessarily create better search results or a fairer market, as Google still decides who wins and who loses. The biggest winner being Google itself, the next level being their friends.

Secrecy is also the cornerstone of all marketing channels. Social Media for instance works in a similar way to SEO, except they have secret voting methods rather than secret linking methods. You don't see major social media companies outing a rival's voting methods, as it would shine a torch on their own methods. Even outside of marketing, McDonalds probably worked out KFC's magic blend of herbs and spices decades ago, but it's not in their best interest to tell everybody.

Outing webspam helps an SEO blog to keep their UVs up and their VCs happy. It helps a failing newspaper to appear modern and edgy, whilst allowing the contributor to launch a protection racket off the back of another company's misery.

Do You Want SEOs to Seem More Professional?

How often do you see tier-1 public relations firms marketing themselves by smearing other PR firms?

You don't.

You might see a company like Google hire a PR firm to push a bogus study to smear the security of a competitor, but you rarely (if ever) will see one PR firm smear another in the media.

While some of the more intellectually challenged members of the SEO industry associate search spam with molesting children (talk to Google about that after their recent Chrome fiasco), those with a bit of intelligence and/or experience realize that many of the issues are gray and murky. What one person considers as spam one day they later sell as "advanced" months or years down the road. The ecosystem isn't some static black & white code:

The question is less whether black hat and webspam are a good thing or not, but if Google is the unbiased and benevolent instance who shall make the rules. Google is a business and persuits its very own interestes, since it is aware of its market power with a lot of arrogance, aggresivity and obviously double standards. That was also Aaron's point, but seomoz has been missing the point completly in the last time.

I expect an SEO portal/community to focus on how stuff actually works/can work, not to propagate how the monopolist does it want to work. It is their risk of doing business if they decide for an algorithm, not ours. It is our risk however, to decide whether to stick to the rules or not. And it's not only about ethics but has several practical implications...

Full Disclosure Required, Except From Us

On paid links Google claims to require machine AND human readable disclosure. Then on their own site they use an ad color background that literally fades to white on many monitors. Maybe it is legitimate that they are only able to fool some of the users some of the time. But some of their ad initiatives have 0 disclosure at all. None.

That is now part of the "organic" search results, but is that a paid ad?

You wouldn't know by looking at it, but according to the WSJ it is: "Google lists booking links to the airlines as advertisements, but the company declined to comment on how much money it makes from the arrangement."

There is no disclosure that you are in a paid ad funnel until the very last click. And those who fail to pay are either unlisted, listed last, or have a broken booking process where their brand is arbitraged in an attempt to flip the click to somewhere else. According to Leocha, “Google and the airlines have a sweetheart deal with each other, and the consumers are getting screwed.”

In the hotel market Google is also testing comparison ads & price ads.

Notice how little they care about relevancy so long as they keep the click on Google or are paid for the referral. They rank the car rental company Avis as a top Las Vegas hotel! And even the ad links that are sold off of that do not line up. Priceline pushes the Plazzo Luxury Suites & Booking.com pushes the Venitian.

Retarding Investment in the Search Ecosystem

What do you suppose the above behavior does to cash flow & multiples of websites in that vertical? Of course it contracts them & retards investment. Who wants to start a new hotel website at this point? What other verticals have investment held back by the fear of Google's eventual entry?

If you only had to manage competing against other market competitors & staying inside Google's editorial guidelines then investment isn't that difficult, but if you have to stay within Google's guidelines in the short term yet try to build a business that is sustainable even after Google enters & destroys the market it is far more difficult.

Skimming the Cream

At any time Google can enter any market and skim off the cream: "An independent study from Leads360 showed consumers using Google’s comparison ads converted better than any other lead provider."

Other affiliate networks which do not own the search channel have to fight through quality issues if they try to build similar scale.

A Self-serving Bias You Can Count On

When Google enters a market it might buy out a competitor, buy out a supplier, bundle, use predatory pricing, grant themselves superior search placement, adjust the relevancy algorithms and/or editorial guidelines, violate IP, scrape 3rd party content, work with sketchy advertisers & publishers to undermine competing business models, or any combination of the above.

They are rarely transparent with their interests when they enter a market. Almost everything is labeled as "a beta" and "just a test." They promise to "act appropriately" & you may not be aware of the steamroller until you are under it.

Web Scrape Plus+ (Now With More Scraping)

When the +1 button & Google+ launched, Google highlighted how they would use the + button usage as a "relevancy" signal. Google recently started inserting + pages directly into the search results for brands & right from the very start they were using it as a scraper website that would outrank the original content source.

Google used the buy in from their promised relevancy signal to create a badge-based incentivized system which acts as a glorified PageRank funnel to further juice the rankings of these new pages on a domain name that already had a PageRank 10.

I recently read a blog post about how anyone could do the above & the opportunity is open to everyone. But the truth is, I can't state that something will become a relevancy signal that manipulates the search results in order to get buy in. Or, if I did something which actually had the same net effect, Google would likely chop my legs off for promoting a link scheme.

Recently the topic of Google+ as a scraper site came up yet again via Read Write Web & on Hacker News a Googler stated that it was "childish" to place any of the blame on Google!!!!!!

Google determines how much information is shown near each listing & can create "relevancy" signals in ways that things tied to Google get over-represented (look at the +1 count here). When they do that & it destroys other business models *of course* Google deserves 100% of the blame.

It may be more profitable for Google to squeeze out some of the players, but if Google's quest for free content manages to destroy business models & the ecosystem as a whole, then they are not "doing what is best for the user."

Things We Do Not Approve...

Google can bundle themselves into markets, but when others do the same it is a big no no:

A Google spokesman said "applications that are installed without clear disclosure, that are hard to remove and that modify users' experiences in unexpected ways are bad for users and the Web as a whole."

Google's founding research highlighted how bad ad-driven search engines were & then Google's core revenue engine of paid search was built on their violation of Overture's patent. They keep buying swaths of patents to protect against their other violations.

The business model of "violate & then buy protection" has helped lead to a protection-racket styled marketplace in patents that makes the risk of innovation for smaller players so expensive that it drives them under.

Where Google has gained a dominant position in a marketplace they can begin misdirecting for profit. Let's say you link to your own location on Google Maps to drive traffic to Google & help your users locate your office. Well in some cases they then reciprocate by confusing users by putting an ad in your location bubble.

Once again, you are forced to buy your own brand unless you teach your customers (and prospective customers) to avoid Google products.

Sure I May Have Failed, But at Least That Failure Was Transparent...

If you are fully transparent against an arbitrary set of guidelines when the company that judges you also competes against you & brushes up against the limits of the DOJ & FTC then you might lose for no reason other than being transparent. And not only are you competing directly against Google, but the algorithms are biased toward certain players.

Creating a Two-tier Web

In 2006 Google's Eric Schmidt admonished others for attempting to create a 2-tier web:

Today the Internet is an information highway where anybody — no matter how large or small, how traditional or unconventional — has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can’t pay.

But when Google launched their Panda algorithm they did the same thing.

Their "quality content" thesis could have come across as being honest if they weren't still pre-paying Demand Media to upload "content" to YouTube.

You might get smoked by a Panda update or have your accounts arbitrarily frozen while operating at a 7 out of 10 level, and then you see Ask is Google's biggest advertiser, their arbitrage gets a pass, & that feed even monetizes misspelled searches for Google's brand. ;)

Risks

Risk is needed for adaptation, so some amount of risk is good, but...

• If you invest in ultra-high quality content & then someone else scrapes you and outranks you then your business model might not be sustainable.
• Google's approach to patents has helped feed into a side current of risk for independent developers.
• For many businesses the unknown Panda risk is every bit as damaging as the great firewall of China. Each additional unknown kills x% of small new online businesses. If unemployment is high, companies are not hiring & the bar for self-employment is too high then the web stagnates.

If the old established corporate competition needs to be as good as you to compete then there is little risk to being transparent if the competition is doing nothing beyond following you around. But if the playing field is tilted and the competition only needs to be 5% as good as you are to beat you (and can easily come from behind to copy any success you have) then full on transparency brings much more risk than potential profits.

You Are the Ad

We are moving into a media world where the content becomes ads & even how people interact with the ads and content becomes a part of the ad.

Further Google uses their data advantage to create other asymmetrical advantages. While credit card companies sell personalized ads in network, Google is creating a marketplace to buy and sell user data.

Every time you view a page and click an ad (or even don't click an ad) you are feeding highly personal data back to Google. And they will use it as they wish. Here they are saying thousands of people like eBay, which is of course plenty reasonable, except for the fact they claim the people voted for that specific page rather than the site as a whole.

What's worse is that sometimes they will put your picture next to a listing and claim that YOU PERSONALLY voted for a specific page & use that to market that item to your friends and contacts. The problem with this is that:

• even after you remove the vote for a site they still keep showing it
• you may vote for site A & they will show your image as voting for site B
• when they show your picture they claim you voted specifically for the page being advertised (even if that page is promoting a scam or something else you wouldn't endorse)

Once again, I will highlight that they use the votes against the wrong sites & pages and that they keep showing the votes even weeks after you remove them.

Where is the transparency in that deceptive crap?

Others Are Just as Bad, But Are Not Monopolies

But Aaron, you are just being hard on Google, why don't you ever mention Ask or Yahoo! or Bing?

I did mention Ask above. ;)

Bing has done numerous self-serving things, including some that are flat out sketchy.

Yahoo! offers a useless "buying guide" for fish tanks that is nothing more than a paid pointer to Overstock.com.

If you click on their coupons tab on that fish tanks search Yahoo! shows you coupons for tank tops, which is pretty idiotic.

Why is this Yahoo! Shopping & Yahoo! Deals product so ugly? They outsourced it years ago. So it is a non-product & thus the integration can't be anything but crappy.

Why do Yahoo! & Bing typically get a pass? They own a fairly low search marketshare. Missing traffic from either or both of those is certainly significant enough to be felt, however even when they are combined it is still less than half of what Google controls in most markets. Market leaders are expected to operate in less conflicted & less self-serving ways than also ran players in their market do. If Microsoft would have had 10% or 15% marketshare for their operating system then it is unlikely their browser bundling would have come under such scrutiny.

Transparency in The Real World

In the past I highlighted how every form of media is manipulated in Why Outing is Bad, but I thought it would be fun to run through some other markets and highlight how transparency often exists only as an illusion (to lure in punters so they can be rooked).

TrueCar aimed to make that market more transparent by giving consumers pricing data online to remove some of the asymmetrical advantage dealers have & makes the sales process smoother for consumers. How does the automotive market respond? Honda issued threats to their dealers & now TrueCar has a hate video ranking for their brand.

This nontransparency is not something new, but rather the way it has always been.

It exists at every level of society. Countries spy on one another & companies may chose to show different views of the world to different markets.

And what they do internally doesn't match the story they share publicly. Look no further than the News of the World's hacking scandal:

News International’s leading profit centre, the News of the World, was dependent on a very ugly culture of lawbreaking, hacking and impunity. This freewheeling, ask-no-questions attitude spread to other parts of the organisation, such as the Times and the Sunday Times, both of which used have used illegal or unethical techniques. Even more troubling, when senior News International management were confronted with evidence of wrongdoing, the company made false statements and took actions which prevented key evidence from reaching the public domain.

The same company has not only been accused of hacking at some of its other news outlets (by its own employees no less) but was also accused of similar in other lines of business:

Both cases involve News America Marketing, an obscure but lucrative division of the News Corporation that is a big player in the business of retail marketing, including newspaper coupon inserts and in-store promotions. The company has come under scrutiny for a pattern of conduct that includes below-cost pricing, paying customers not to do business with competitors and accusations of computer hacking.

Were The Robber Barons Transparent?

Going back into history it is sort of hard to pick a starting point (one can go to the spice trade & orders that are unsealed at sea, or likely earlier than that) but to pick a somewhat recent starting point, we could look at the railroads:

So how did unnecessary, inefficient railroads get built? Because of government subsidies. In short, the federal government paid to build the railroads through massive financing subsidies and also gave them ample land grants. The trick to building a railroad was not knowing anything about railroads or even about business; it was having friends in Washington who could give you the right financing and land subsidies.

Even then, the railroads lost money. Not only was there insufficient demand for their services, but they were run by people who were generally incompetent. (For one thing, they didn’t even know their own costs of doing business.) Yet the people who owned the railroads made fabulous amounts of money (of which Stanford University is one symbol). The main way to do this was simple. The people who controlled a railroad (generally by putting up very little of their own money, thanks to the government subsidies) would also wholly own a construction company. They would cause the railroad to overpay the construction company to build the railroad—in effect transferring wealth from railroad stockholders and creditors into their own pockets

What did the Robber Barons invest in? In large part government, media & educational institutions so that they could help "educate" society on how to behave much more civilly than they have.

Corporate Advocacy

There are tons of marketing campaigns designed to "educate" society about the impacts of various companies. BP now markets the gulf coast economy they plundered.

AT&T's astroturfing campaign to acquire T-Mobile was so over the top that it actually backfired.

"Get the facts" styled campaigns are rarely about promoting a complete worldview.

Remember the $500 million fine for Google from them pushing ads selling overseas Viagra in the US? Now they promote scaremongering ads against fakes from filthy labs.

Coca-cola runs The Beverage Institute & has "doctors" highlight how healthy soda is.

At the same time, when Pepsi was sued over an alleged rat being in a can of Mountain Dew. Pepsi's defense claimed: "the mouse would have dissolved in the soda had it been in the can from the time of its bottling until the day the plaintiff drank it" turning the mouse into a 'jelly-like' substance. But don't worry folks, it's healthy. :D

At least we still have water.

When they are not busy making it illegal to collect rainwater, Bechtel wants you to follow them on Twitter.

It is hard to know what is in our food & those who label things as organic have to fill out more paperwork than those who manufacture frankenfood. Then there are the baseline chemicals sold as biodegradable which are not. ;)

Oh well, at least we have insurance.

State Farm is the #1 ranked bad faith insurance company, but at least they upload & advertise irrelevant funny videos to YouTube to create brand signal for Google.

Transparency in Everyday Life

Of course some of the worst affiliate offers, the most aggressive sales calls & other scams are designed to prey on ignorance of small print & rebilling, but even generally good businesses practice in asymmetrical skimming.

A few recent examples:

• You are reading this on a computer monitor right now, right? LCD manufacturers recently had to pay over a $553 million price fixing fine.
• See this review about spam mail (the physical kind) from National Geographic.
• Cell phone companies bill you for services you don't even use and then there is a tax added to subsidize handing out free cell phones.
• One of the largest religious institutions was found to be associated with illegally selling off hundreds of thousands of babies (after telling the single mother that their newborn child died). This process was going on through the late 1980's!
• Medtronic surgeons which were paid over $60 million held back nasty side effects.
• Online poker was made illegal in the US a few years back. The thesis for why it was made illegal was reinterpreted internally by the DOJ in September, but that wasn't announced publicly until just after one of the Absolute Poker co-owner admitted his guilt. The public announcement increased the stock price of numerous gaming companies, as Nevada gets ready for online poker.
• This past holiday season Best Buy not only sold products they didn't have, but in many cases when they did have them they charged a rate higher than the one advertised unless you caught it & forced them to charge you the advertised price.
• When looking at my credit card bill I saw a scammy $22.99 charge on it for a credit report I have never ordered. I looked up information about the "company" offering that service & the #1 result (with sitelinks) was my darn credit card company's website! They had to conduct a block on themselves, but if you don't notice it they will steal $23 a month until you die. ;)

Is Our Financial System Transparent?

When one looks at the field of finance it is story after story of deception, nontransparency & lawlessness. It is a constant reminder that there is no such thing as business ethics.

• Wachovia laundered $378.4 billion in drug money for violent drug cartels. As if that wasn't bad enough, we also sold them weapons that wound up at murder scenes with our own border patrol dead & the Koch brothers sold weapons to states that we brand as "rogue."
• Bank of New York Mellon ripped off their clients with unsavory Forex rates: "As investigators sought to determine whether the bank overcharged clients to execute their currency trades, a senior BNY Mellon executive nicknamed "Rambo" urged traders not to tell clients how much money they made on trading, according to the informant."
• A former Federal Reserve member writes about the Fed: "No matter the legalistic interpretation, the Fed is, working through the ECB, bailing out European banks and, indirectly, spendthrift European governments. It is difficult to count the number of things wrong with this arrangement."
• Bank of America recently had to pay $335 million to settle a discrimination lawsuit against minorities, due to Countrywide (who is NOT on your side) charging juiced interest rates. Bank of America had to pay an $8.5 billion settlement to investors who bought some of the junk mortgages out the other end.
• "What’s happened is that, almost overnight, we’ve switched from democracy in real-property recording to oligarchy in real-property recording. There was no court case behind this, no statute from Congress or the state legislatures. It was accomplished in a private corporate decision. The banks just did it." - Christopher Peterson
• The financial markets are becoming glorified crack houses: "Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums. What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth. By preventing the natural discipline of the markets to impose losses on poor stewards of capital, and to impose interest rates high enough to force debtors to allocate the capital usefully, the world's policy makers are increasingly wrecking the prospects for long-term economic growth."
• Companies are often brought private, leveraged up on debt & have their pension programs destroyed to make "profits" for private equity investors: "Nowadays private-equity firms often spend hundreds of millions of their own money on an acquisition (BW -- Feb. 27). Just as often, though, they load up the companies with debt and use the money to pay themselves special dividends and other fees that allow them to profit even if the company itself struggles. Then the backers take the company public, often pocketing the lion's share of the offering."
• Individuals who put in extra hours of work because they are sold on the promise of their options may also find those disappear: "Taking away the value of options that are vested means that the concept of vesting becomes bogus. It doesn't matter whether the employee understood if this was the deal or not, it's a scummy practice, and it's ultimately self-defeating (both for the company and the industry as a whole). Who would go to work for Skype (or any PE-backed company) in the future? "
• Limitless fraud before the courts & dancing on the graves of the newly homeless: "Court records show that the firm angered state court judges for alleged false statements and filing suspect documents. Arthur Schack, a state court judge in Brooklyn, in a 2010 ruling said that pleadings by the Baum firm on behalf of HSBC Bank, a unit of London-based HSBC Holdings, in a foreclosure case were "so incredible, outrageous, ludicrous and disingenuous that they should have been authorized by the late Rod Serling, creator of the famous science-fiction television series, The Twilight Zone."
  ...
  The law firm said it would shut down after New York Times columnist Joe Nocera in November published photographs of a 2010 Baum firm Halloween party in which employees dressed up as homeless people. Another showed part of Baum's office decorated to look like a row of foreclosed houses."
• That theft of physical property is ongoing: "Also announced over the weekend was the jaw-dropping, yet illuminating fact that the MF Global bankruptcy was fraudulently, nefariously and illegally drawn up as a Chapter 7 BK for a SECURITIES DEALER and NOT a commodity brokerage as it should have been. Look, MF Global was the second-largest non-bank FCM in the United States next to NewEdge which is the old FIMAT. If MF Global wasn’t an FCM, then there are no FCMs. Of course it was an FCM. It had $7.2 billion in customer seg funds as of August 31, 2011. And yet MF Global was immediately, from the get-go, put into Chapter 7 BK as a SECURITIES FIRM. This is fraud. MF Global’s BK should have OBVIOUSLY been established under Subchapter IV of the Chapter 7 code as a COMMODITY BROKERAGE."
• And as banking criminals literally steal money, destroy lives & undermine the rule of law to grow their "profits" sleazeballs like Jamie Dimon think that the reason people hate them is envy.

The above makes no mention of helping Greece hide governmental debt, bid-rigging bribes in Jefferson County, robosigning bogus foreclosure documents, and a host of other crimes. But one thing in common with all the above crimes is this: no jailtime for the banksters.

Since there is nothing stopping those criminals they keep up their crimes:

Big banks represent the ultimate in concentrated economic power in today’s economies. They are able to resist all meaningful reform that could really change their compensation schemes. Their executives want to get all the upside while facing none of the true downside.

But capitalism without the prospect of failure is not any kind of market economy. We are running a large-scale, nontransparent, and dangerous government subsidy scheme for the benefit primarily of a very few, extremely wealthy people.

The actions of the financial cartel are both obvious & predictable. And the damage they do is felt worldwide:

Credit-financed economic booms, by turns in private then public credit as one ratchets up the other over a series of booms and busts, are as irresistible to politicians as hookers and maids.
...
The failures of American FIRE Economy policies are behind the movements in Libya, Yemen, and Syria, as reflation measures, from quantitative easing to currency depreciation, steal purchasing power from low income families world wide, acting as the most regressive tax imaginable. Simmering hatreds are exacerbated by the developing global crisis over oil supplies and costs.
...
The so-called debate about debt ceilings, spending cuts, and entitlements reductions is a red herring. The public debt crisis arose from the 2007 - 2008 private credit market crisis, not the government liabilities that have been building for decades. The mistake of both the left and the right is thinking that we can escape an output gap without facing up to the politically unpopular task of demanding that creditors take a loss on loans taken out during the credit bubble era.

A creditor that makes bad loans deserves to go out of business. Their outsized compensation can't be justified unless they are also made to eat their losses. But rather than holding them accountable for their own actions, societies the world over absorb that pain.

"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power"- Benito Mussolini

Slavery, Debt & Freedom

There are currently more slaves alive than at any point in history. And many people who are not slaves are still being enslaved by crushing debt:

Money is a human construct. The fact that our money is now backed by nothing more than our collective future ability to "produce" relegates us to that of slaves.

Money=paper=blood hours.

Blood hours are a finite measure. Heartbeats.

What's in your wallet? Is it the new debt slavery card: "A personal bankruptcy is supposed to cut borrowers loose from lenders and debt collectors, but Capital One Financial Corp.—one of the nation's largest credit-card issuers—sometimes doesn't want to let go."

Citigroup has an "effective" strategy they employ in some 3rd world countries to deal with those who can't pay:

After dropping his younger daughter at school, Octa walked into Citibank’s credit card collection department on the fifth floor of the Jamsostek tower just after 10 a.m. Four hours later, he left the 25-story building slumped motionless in a wheelchair -- a victim of what police allege was a violent assault by debt collectors. Driven to a nearby hospital in a Citibank car, Octa was pronounced dead on arrival.

Unfortunately, even if you stay out of debt, you are forced to support banking scams:

before being bailed out by governments, banks had never made any return in their history, assuming that their assets are properly marked to market. Nor should they produce any return in the long run, as their business model remains identical to what it was before, with only cosmetic modifications concerning trading risks.

So the facts are clear. But, as individual taxpayers, we are helpless, because we do not control outcomes, owing to the concerted efforts of lobbyists, or, worse, economic policymakers. Our subsidizing of bank managers and executives is completely involuntary.

In the US the reason the government debt outlook is so bad is in part due to overpaying for "assets" owned by the likes of Citibank:

The way the banks make money now is by hiding their losers off balance-sheet, or by forcing them on the taxpayers, and after having themselves declared "systemically important," adjusting their on balance-sheet exposures accordingly, crashing the system and cashing out on their leveraged derivative bets, also at the taxpayers' expense.

In real life, if there is such a thing anymore, all of the major banks are arguably insolvent. So, in reality, they're not making any money at all, they are merely having it transferred to them by their political operatives in Congress and the Federal Reserve Bank. This, after all, is the modern purpose of the Congress, and has always been the purpose of the Federal Reserve System.

Even as they destroy savings, kill jobs & undermine the competitiveness of the economy, why does the government continue to support such scams? Without the scams & cost-shifting those in government wouldn't have as much wealth, power & influence. It is debt & cost-shifting that fuels them:

government and banks are stuck together like a couple of dogs screwing and we don't know which is on top. Here, Republicans need government to finance war and Democrats need it to finance social programs. Both need it to finance both, as that is how government attempts to maintain power and influence over the people this day and time.

The congress literally sells insider tips to hedge funds:

When Senate Democrats finally brokered a compromise over the proposed health-care law, a group of hedge funds were let in on the deal, learning details hours before a public announcement on Dec. 8, 2009.

The news was potentially worth millions of dollars to the investors, though none would publicly divulge how they used the information. They belong to a select group who pay for early, firsthand reports on Capitol Hill.

Since most money comes into circulation as debt (and due to the compounding nature of debt interest), if those at the top are not allowed to fail then those at the bottom will fall hard:

In the past, periods dominated by virtual credit money have also been periods where there have been social protections for debtors. Once you recognize that money is just a social construct, a credit, an IOU, then first of all what is to stop people from generating it endlessly? And how do you prevent the poor from falling into debt traps and becoming effectively enslaved to the rich? That’s why you had Mesopotamian clean slates, Biblical Jubilees, Medieval laws against usury in both Christianity and Islam and so on and so forth.

Since antiquity the worst-case scenario that everyone felt would lead to total social breakdown was a major debt crisis; ordinary people would become so indebted to the top one or two percent of the population that they would start selling family members into slavery, or eventually, even themselves.

Well, what happened this time around? Instead of creating some sort of overarching institution to protect debtors, they create these grandiose, world-scale institutions like the IMF or S&P to protect creditors. They essentially declare (in defiance of all traditional economic logic) that no debtor should ever be allowed to default. Needless to say the result is catastrophic. We are experiencing something that to me, at least, looks exactly like what the ancients were most afraid of: a population of debtors skating at the edge of disaster.

And, I might add, if Aristotle were around today, I very much doubt he would think that the distinction between renting yourself or members of your family out to work and selling yourself or members of your family to work was more than a legal nicety. He’d probably conclude that most Americans were, for all intents and purposes, slaves.
...
Clearly any pretence that markets maintain themselves, that debts always have to be honored, went by the boards in 2008. That’s one of the reasons I think you see the beginnings of a reaction in a remarkably similar form to what we saw during the heyday of the ‘Third World debt crisis’ – what got called, rather weirdly, the ‘anti-globalization movement’. This movement called for genuine democracy and actually tried to practice forms of direct, horizontal democracy. In the face of this there was the insidious alliance between financial elites and global bureaucrats (whether the IMF, World Bank, WTO, now EU, or what-have-you).

Those who have the least often give the most. Excessive income inequality (especially when driven by fraud) leads to a moral and cultural rot. Financial cartels & governments can only enslave people in so much debt & hand out so much soma before they either revolt or simply lose faith.

(On a related note, December saw record gun sales.)

State actors have repeatedly use violence to try to encourage a similar response. Instead they created a viral meme & the movement lives on.

Of course there are "opposition research" hacks willing to dig up dirt on anyone with wide reach who opposes the state-sponsored fraud: "It will be vital,” the memo says, “to understand who is funding it and what their backgrounds and motives are. If we can show that they have the same cynical motivation as a political opponent it will undermine their credibility in a profound way.”

The state has long manipulated mainstream media and has tools for spying on social networks, hacking accounts & astroturfing online, but sock puppets can only go so far against reality.

Who Does 100% Marketing Transparency Help & Who Does it Hurt?

We have an SEC that shreds over a decade of evidence (and engages in other illegal behaviors), a government that bails out the criminal enterprises & a court system that broadly makes it nearly impossible to win a financial fraud lawsuit.

The biggest companies & the biggest people in business at this point are simply above the rule of law & are not held accountable for their actions. Worse yet, the corrupt system has global influence.

• In 2004 the FBI warned that there was an "epidemic" of mortgage fraud and that it would create a crisis.
• "My administration is the only thing between you and the pitchforks," the president told them.
• And, in spite of the FBI highlighting the massive mortgage fraud, and the above quote, the president (who is a horrible human being) aims to keep the population misinformed & ignorant, publicly stating that what Wall St did wasn't illegal!

Henry Kissinger has a famous quote about power: "Before the Freedom of Information Act, I used to say at meetings, ‘The illegal we do immediately; the unconstitutional takes a little longer.’ [laughter] But since the Freedom of Information Act, I’m afraid to say things like that." Since then government officials have become much more evasive & smooth talking. Unfortunately, freedom of the press only goes so far:

this is how the much-lauded "freedom of the press" myth in the US actually works. If you perform the job of an actual journalist, telling truth to power, forget about attending press conferences at the White House, Pentagon or State Department. You won't even be admitted in the building.

When you ask for total market transparency it changes nothing with the criminality at the top, but it does create a juicy data source for criminals while harming personal civil liberties & unpeople with limited power:

The people who most heavily rely on pseudonyms in online spaces are those who are most marginalized by systems of power. “Real names” policies aren’t empowering; they’re an authoritarian assertion of power over vulnerable people.

Affiliates Are a Dying Breed

Being an ecommerce affiliate keeps getting harder & harder unless you have a strong brand and/or are selling things with a complex sales cycle.

Portable air conditioners is a pretty niche category, but when I look at it I simply don't see any opportunity on the SEO front unless you take on the significant risk of carrying inventory & drop hundreds of thousands to millions of Dollars on branding.

The Corporate, The Bad & The Ugly

Head keyword: note the brand navigation, the extended AdWords ads & the product search results that drive the traditional search results below the fold

Tail keywords are every bit as ugly, with Google product ads sometimes coming in inline, further driving down the organic search results.

And it is nastier when Google Instant is still extended. 10% of browsers can see a single organic search result!

Corporate, Corporate, Corporate

As ugly as that looks, not only do the larger merchants have an advantage in AdWords (getting their product ads on a CPA basis while smaller merchants have to pay on a CPC basis), Google product search (more reviews), inline search navigation options (featuring the same brands yet again), but most of the organic results (that are generally below the fold) are also the same big brands after the Panda update gave them a boost while torching their smaller competitors.

The Chicken vs Egg Problem of Scale

For online pure-plays (outside of Amazon.com, eBay & a few others) the "no opportunity anywhere" problem in search also harms the ability to be competitive on pricing because without the ability to rank you don't have the leverage over the supply chain the way that the big box stores do from winning everywhere in the SERP & having offline distribution. There is little opportunity to organically grow to scale over time unless you enter the market with some point of leverage (like going so far as creating the product right on through to marketing it to consumers), sell something totally different than what is already available in the market (and hope it doesn't get cloned), buy out an existing company that went bankrupt, and/or build significant non-search distribution channels first.

I suppose the last option on that front would be to promote your stuff on a large platform that is already doing well in Google (say eBay, Amazon, or Facebook), but doing that gives you limited control over the customer experience & forces you to keep chasing new one-off sales rather than building & deepening relationships with customers.

Killing Off Diversity

As Google collects more usage date (mobile is already 12% of search) these big box stores will have an even bigger moat between them & smaller competitors.

The "big box stores only" search results also create an experience that is bland & uniform. At first glance things may look different, but it is the same type of sites again and again: a lot of the brands cross hire, have similar "politically correct" cultures & have roughly similar customer experience sets. When you buy from Walmart you are not going to get that caring email from a founder offering hands on tips & advice. Scale requires homoginization, which generally kills of personality & differentiation.

Killing Off Innovation

The problem with the "be huge or die" approach to search is that most legitimate economic innovation comes from smaller players that challenge the existing power structure. Set the barrier to entry too high and you might have less spam to fight, but you certainly will have less economic innovation & more of the would-be innovators will be stuck working dead end job at dysfunctional corporations.

Now You See it, Now You Don't

Most people can't see what they are missing out on so they won't know, but (as Tim Wu put it so eloquently in The Master Switch) the same was true for AT&T when it held back innovations like the answering machine & what ultimately came to be the WWW. What sort of price do you put on email taking a decade longer to launch? How many other disruptive changes built off of incremental improvements will never appear because they simply weren't large & corporate enough to compete on Google's web?

The web was great because it offered something different. Unfortunately you have to search using something other than Google to find it.

We would all like to sell more, be it SEO services, leads, or goods and services. Here are a few ideas for prospering in a down market, by increasing sales.

Review Your Pricing

When times are tough, everyone is under pressure to cut spending. Most of your customers will likely fall into this camp. What do you do if your customers are using price as a means to pick your competitors over you?

One way is to cut your pricing, too.

Whilst this may work in the short term, it is likely to be a poor long term strategy for a small business. It's a poor long term strategy because there will always be someone else prepared to undercut you. Your margins shrink, and only the most ruthlessly efficient or largest operator, who can scale on tight margins, is going to survive.

Another way of looking at this problem is to increase value. Think about ways you can offer your customers more whilst retaining your cost structure. If the customer is made aware of your extra value, then you price may look cheap compared to your competitors, even though you haven't been forced to drop it.

Deliver

Delivery is everything. Say what you'll do, then do it, then tell them you've done it. It's probably one of the most effective sales methods there is, as it invariably leads to repeat business. Getting repeat business is much cheaper than getting new business, as you already have an open line of communication.

By delivering what you said you would do, your value to the customer has increased. They no longer have to spend time comparing and contrasting the offers made by your competitors. Even if they do, the customer still faces the risk of dealing with someone with an unknown track record. That risk is an added cost.

Partner Up

To extend your customer base, you often have to advertise and market. Expensive, obviously.

However, you could "acquire" someone else's customer base simply by partnering up. For example, if you sell SEO Services, it might be a good idea to partner with web designer agencies. You get access to their client base, and they get access to to an add-on service they can sell. They may even sell your services for you, giving you more time to focus on SEO, rather than selling.

Hire Sales People

Are you good at sales? Good at closing deals? Personally, I hate doing it.

Sales is a bit of an art. The people who are good at it tend to have a mix of qualities that take a long time to develop. They have built up a reputation, a network and trust. They work on deals all the time, knowing how to handle objections, and make the deal.

Given we're in a down-market, there will be a lot of good salespeople looking for work.

Why not look into hiring one? Are there sales people available who will work on commission for you?

Network

The next best thing is to build your own personal network.

Someone knows someone who needs what you've got. It's easier to sell to them if they are already aware of you. Hustle. Social media, conferences, speaking at conferences, meeting up with people, attending events indirectly related to your field of business, etc.

All good.

Good business people also tend to be good networkers. Business really is mostly about who, not what, you know.

Guarantee It

A friend of mine uses the following guarantee.

He says if the customer is not happy with what he does, they can walk. At any point, no questions asked. They don't owe him anything.

This may sound generous, until you realize this is merely a reflection of what would happen anyway. He operates a small business, and he works with large government clients. If the clients think his work is unsuitable, after they've signed, they would likely view it as a breach of contract, and put their lawyers onto him. He knows he would be unlikely to win such a legal fight, nor could he afford it.

His guarantee sounds very reassuring to the client, however. It sounds to the client like there is no risk for them.

This is why guarantees work wonders. At the back of every clients mind is the fear they'll be ripped off, or fear they will look foolish if they buy from you. A guarantee helps eliminate this universal objection, and close the sale.

* If you think otherwise, do you care to debate the following video?

"Perhaps the only lessons learned by the banks in the crisis is that the rules don't apply to them." Ain't that the truth. The video is completely accurate:

Richard M. Bowen, former chief underwriter for Citigroup’s consumer-lending group, said he warned his superiors of concerns that some types of loans in securities didn’t conform with representations and warranties in 2006 and 2007.

“In mid-2006, I discovered that over 60 percent of these mortgages purchased and sold were defective,” Bowen testified on April 7 before the Financial Crisis Inquiry Commission created by Congress. “Defective mortgages increased during 2007 to over 80 percent of production.”

Read that bold sentence again.

The bankers KNEW they were committing fraud that would create trillions of Dollars in losses.

Rather than suing them for the appraisal fraud, accounting control fraud, securities fraud, mortgage fraud & foreclosure fraud, instead we have a government that assists them in the fraud by papering over their mistakes and forcing other institutions to waive the right to sue over the fraud.

Everyone else is forced to eat the socialized losses that mirror the "profits" generated by the banks in years past. We have a central bank holding rates at 0 while running the printing presses in overdrive. That is destroying pension accounts and the living standard of the elderly as their life savings is literally stolen from them to prop up a bunch of criminal thugs on Wall Street.

The goal is not to create value or stability, but rather to engineer instability, with sharp market moves which can be profited from on the way up AND on the way down:

Bubble, Crash, Bubble, Crash, Bubble ...

We will continue this cycle until we catch on. The problem isn't only that the Fed is treating the symptoms instead of the disease. Rather, by irresponsibly promoting reckless speculation, misallocation of capital, moral hazard (careless lending without repercussions), and illusory "wealth effects," the Fed has become the disease.

The average person is fed backwards looking misinformation by the media, which is sponsored by those selling the bag to others.

If you are in debt for consumption driven reasons it is worth noting that the game is rigged. These people have done, are doing, and will continue to act as criminals to rip you off. There is no reason to go out of your way to make yourself easy prey.

Are you anti-American? Do you have an axe to grind? Did you somehow fail at life? These are questions we are trained to think when anyone complains about scams embedded in the political economy.

Speaking for myself, I have never been as successful as I am today, and much of that success comes from the free market ideals that have been preached (and meeting my wonderful wife). The issue I have right now is that we still preach those free market ideals, but are doing nothing to follow them (and are actively undermining them). If I was born 5 years or 10 years later I might be a street beggar, simply because my opportunity to succeed had been marginalized by the market corruption of the bankers. Maybe I still would have done ok, but a lot of people are being driven to the margins and off a cliff. Many of them are even sadly conned into believing it is their own fault.

Certainly consumers are to blame for some stuff, but they had no idea how much fraud was embedded in the financial engineering going on beyond the headlines. They didn't know that the central banker believed that there was no reason police fraud. Most people are too busy to be macro-economic experts on the side, and yet if you made the mistake of trusting the bankers in some cases they may have destroyed your life savings or left you living a meager life as a debt serf.

Back when the FBI warned that there was an epidemic of mortgage fraud (in 2004), the US federal government shifted some of those resources to policing other areas like homeland "security." When states tried to protect their citizens against predatory loans the federal government used preemption to block them, allowing the fraud to continue. As Alan Greenspan states: there was fraud, it was intentional, and it was indeed a series of criminal acts.

None of that is a matter of debate.

And none of the banking executives are in jail.

The federal government sided with the criminals on the way up. And it is siding with the criminals on the way down. They would rather debase the currency and steal your savings than let their criminal buddies on Wall Street go bankrupt.

Society is nothing more than a system of laws and the culture they promote. Betray someone's trust and they become less trusting toward everyone else. That creates friction in the marketplace which shrinks the economy and living standards. Make heroes out of criminals & at some people a lot of people are going to say "screw it, the laws do not apply to me either." When that happens (as it will) then at some point there will be a sharp increase in violence.

This is not about promoting communism, or some other such label. What we have now in the capital markets is far worse than communism, as they have privatized profits AND socialized losses. If you believe in capitalism OR communism then what is happening now is broken.

And yet the people who just privatized the profits and socialized the losses are to be worshiped and followed. You should be thankful that the government bailed them out & you should just suck it up. The role of government is to protect the wealth of the opulent from the stupid majority. It has always been.

The stupid thing about it is that all (or at least most) of that pain & suffering is easily avoidable by letting the people who preach free market values to eat their losses and fail. By pushing those off onto everyone else, ultimately the government just creates uncertainty and makes people less trusting. And as society breaks down, the government won't be able to sort out the issues, as they already gave away all the money to a bunch of brigands on Wall Street.

They will dance while your family starves.

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

When you think of labor day what comes to mind? For me it is these 2 thoughts

• lower earnings because few people are online today
• since almost nobody is online, any hours worked today are me getting ahead of the market ;)

Working hard & working long hours can almost be a disease...the web makes it easy to be addicted.

But for every person who is putting in hard work trying to help people there is another person selling image.

The big issue with the image game is the risks. As the lies pile up they corner people into a bad situation, to where they can (and do) lose everything.

If I had to take a single point of reference to help a stranger judge the difference between a hack and someone who wants to honestly help people, I would say it is this: do they encourage you to take on debt.

• If they do then there is a good chance they are the type of person who will go out of their way to screw you.
• If they do not then they are likely not a maximizer type (because if they were then they would be encouraging you to go into debt to sell you more stuff).

It is not that all debt is evil (when I got started online I was naive enough to start on a credit card), but life and markets are unpredictable. If I wasn't smart enough to get a job to cover my 6 or so months of education before going full time online who knows where I would now be. What seems like a short term gain can lead to longterm failure. We are human, and so we are flawed. Wen you have debt/leverage you have no spare parts. So if something goes wrong you are done. Nassim Taleb spoke about the importance of savings and diversity of revenues as keys to survival, while noting that the very structure of our public markets encourages risk + leverage (options encourage short term performance & volatility rather than sustained growth, and you hope the guy on the next watch is stuck holding the Madoff ponzi bag).

The falls of past empires have typically been preceded by rapid inflation in food costs. Our food supply, like most other aspects of modern day life, has been so extended as to be poisonous. Fishes soaked in chemicals literally change sex back and forth, and shrimp in the ocean (with traces of Prozac) swim toward the light - where they get ate.

Its not about fixing the conversation. Its about filling in the blanks. If people are prone to click on something that is exactly what they will get, even if it is not something they want.

We misinform kids about sex in a way that can screw up the rest of their lives. Against the will of people data is collected so that they may be stalked and harassed. If you once thought you were fat in the past, long after becoming anorexic there will still be ads reminding you how fat you are, following you around the web.

When bits of culture die the life lessons wrapped in it fade as well. Sure there may be HTML codes for emotions, but (beyond ad targeting) it is hard to reduce people to number.

Is the push toward homoginization to increase yield and chasing the lowest common denominator making people happier or more miserable?

I realize that reading the above can quickly make me sound like some ultra left-winged hippie, but the point of this post is not a political one ... rather one on the basic rule of law.

We justify (or downplay) harming ourselves, our environments, and the environments of other animals so we can have more and better. But to do this we often take on debt and leverage and put ourselves in precarious situations. Worse yet, we often have *others* decide to take on leverage for us, without our desire or permission.

Why is it that the government is giving Google tax credits to build more low income housing while the Federal Reserve is sitting on over $1 trillion in bad mortgage paper? How can the government want to make housing cheaper / more affordable while simultaneously propping up (and thus ensuring overvaluation of) virtually the whole of the market? How can the government taking both sides of the same bet lead to anything but waste, fraud & abuse?

If you believe in efficient market theory then banking should represent a small portion of the profit pool (since banks are all dealing in the same commodity of cash). And yet the banking class keeps representing a growing portion of the profits, while the bad sides of their trades (the losses) are passed on to tax payers.

I don't mind someone else levering up with risk so long as they have to pay the consequences of their failures. But capitalism without failure is like religion without sin.

These banks threatened tanks in the street if they didn't get their bailouts.

They went so far as to say even auditing the Federal Reserve would threaten the financial system. Sorry, um, but that is exactly what the banking class did. If they are not punished for committing crimes then the lawlessness will only grow more extreme, as it has.

When the bubble popped some of these scammers, charlatans, shysters, swindlers, and tricksters claimed that "nobody saw it coming," but in fact as things started to go wrong these folks leaned into it and made it worse.

Rather than having CDOs go unsold they engaged in self-dealing & kept mixing the bad chunks in, sorta like making new sausage out of old sausage. They knew what they were doing. They intended to commit fraud:

"On paper, the risky stuff was gone, held by new independent CDOs. In reality, however, the banks were buying their own otherwise unsellable assets."
...
"One rival investment banker says Merrill treated CDO managers the way Henry Ford treated his Model T customers: You can have any color you want, as long as it's black."

Its labor day. The criminal bankers who ripped you off in the past, who are currently ripping you off with more crimes, and who will rip your children off are stealing your labor. And since neither political party cares to stop it its up to you how much you want to give...there is no end to how much they would love to take. Time for me to take a break. ;)