Venture Capital Becoming Irrelevant to the Web?

I recently got my first venture capital investment request for this blog, which, of course, I turned down. Nothing wrong with VC, of course, other than it isn't a good fit for niche publishing. I generally hate meta blogging stuff, but these 3 quotes are generally all saying the same thing from slightly different angles, which is quite important when you consider the backgrounds of the different sources.

From a VC blog: The Economy of Abundance

The Economy of Abundance allows business owners to defer choices to the end users. What better way to find out what consumers want than to give them everything and see what they actually buy. That is the paradigm of abundance. Why get your news programmed by CNN.com when you can have your news bubble up from the collective wisdom of end users at Newsvine or Reddit? Why get your television programmed by CBS when you can leverage the collective wisdom of the web to find great shows like Lonelygirl15 or Ask a Ninja? No longer will the success or failure of content be dictated solely by the Economy of Scarcity (e.g. Walmart). Rather, it will be dictated by the will of the consumers, as empowered by the Economy of Abundance.

From an entrepreneur who grew a huge business without funding: My Vision of where the web is going.

I think that VC’s will start to wake up and realize that Ajax is a feature and not a product, at the same time how are 100-1000 or so VC funded companies going to compete with a couple of hundred thousand webmasters who have created sites wanting a piece of the action? Many of these webmasters would be perfectly happy with $100/month. But if even if 1 in a 1000 of those adsense driven sites is very successful your entire industry could be screwed. Just look at online dating.

From the owner of a leading tech publishing company: Search Startups Are Dead, Long Live Search Startups

In my talks on Web 2.0, I always end with the point that "a platform beats an application every time." We're entering the platform phase of Web 2.0, in which first generation applications are going to turn into platforms, followed by a stage in which the leaders use that platform strength to outperform their application rivals, eventually closing them out of the market. And that platform is not enforced by control over proprietary APIs, as it was in the Windows era, but by the operational infrastructure, and perhaps even more importantly, by the massive databases (with network effects creating increasing returns for the database leaders) that are at the heart of Web 2.0 platforms.

Platforms like Amazon's S3, Google AdSense, and Google's Custom Search Engine allow passionate people to keep costs low, automate business models, and fund the growth of accidental business models.

As...

the need for venture capital goes down daily for those who can create good passion based ideas. You are not going to build a Google without some funding, but as long as you consider your cost structure from the start you do not need to try to act like Google.

Each additional passion driven amature website makes search more relevant and cuts the publishing market into more pieces. Traditional media companies had to rely on their region based monopoly market position to have a large profit margin, but given the distributed nature of the web is the traditional business financing structure going to even remain relevant in many markets?

Examining Wikipedia's Bias

Some people are up in arms about the idea of Wikipedia adding ads to their site. The issue is not that ads are hated. The true issue with the Wikipedia and advertising is this:

The issue is not targeting or relevancy... the issue is that some will feel it is bait and switch. That something they thought was pure and easy to believe in now suddenly is part of the real world.

The truth is that the Wikipedia has always been chuck full of ads. I am not talking about the link spam that people sneak in, or when people promote their own brands, I am talking about the mindset with which Wikipedia articles are drafted. Lets look at the search engine optimization article.

Classification:

First of all, lets start with the classification and associated fields:
Wikipedia classifies SEO as spamming height=
Even Google's guidance on hiring an SEO, which is quite biased (and self serving) in nature, probably is not as biased as the Wikipedia's classification of SEO.

Now lets compare that frame of reference to the opinion of Google's lead engineer in charge of search quality. From my interview with Matt Cutts, where I asked Is all SEO spam? His response was:

Absolutely not--I need to do a post about this on my blog sometime. Lots and lots of search engine optimization is white-hat and not spam at all.

The way Wikipedia classifies SEO is an advertisement biased against the entire field of SEO, and thus acts as an ad for search engines and pay per click marketing.

Accepted Types of Information:

I knew that directly linking to my site or directly marketing myself on Wikipedia was not going to go to far with them generally hating the field of SEO so much. On the other hand, I knew their vile hatred of the field meant that me mentioning Traffic Power and linking to articles about Traffic Power that link to my site would stay in that article forever. And they have stuck thusfar.

Framing:

The Wikipedia states:

When discovered, search engines may take action against those found to be using unethical SEO methods.

Why is ethics even tied to SEO techniques? Machines can't have ethics. When their results are inaccurate that must be the fault of some external third party with low ethical standards? What is that?

Participation:

From Rough Type:

"Wikipedia hasn't been a real 'wiki' where anyone can write and edit for quite a while now." A few months ago, in the wake of controversies about the quality and reliability of the free encyclopedia's content, the Wikipedian powers-that-be - its "administrators" - abandoned the work's founding ideal of being the "ULTIMATE 'open' format" and tightened the restrictions on editing. In addition to banning some contributors from the site, the administrators adopted an "official policy" of what they called, in good Orwellian fashion, "semi-protection" to prevent "vandals" (also known as people) from messing with their open encyclopedia.

There is a bias toward those who want to talk down or shine a negative light on the field of SEO while true topical experts are driven off. Google founders Sergey Brin and Lawrence Page mentioned Danny Sullivan in some of their early research, and yet Wikipedians ran him out of the topic. Danny is probably the single most authoritative voice on search.

Incentive:

If I know my words are probably going to get edited out of the Wikipedia where is the incentive for me to put effort into editing there when my work is much more likely to be respected and profitable if I put it on my own site?

Staleness:

Not only does the classification and writing within Wikipedia reinforce the worldview pushed by the most powerful associated commercial entity (Google), but the types of things that are reference worthy are "famous" SEOs, which is going to be inherently biased toward people who established strong brands many years ago.

Which of the listed famous SEOs have entered the field this decade? None of them.
Famous SEOs Listed on Wikipedia.
I have no doubt in my mind that many people newer to the SEO market than I know far more than I do.

Also as fields and language itself evolve will the large cross referenced content base that is the Wikipedia even be able to keep up with rapidly changing markets or linguistic changes?

General Factual Errors:

The SEO article on Wikipedia also states

Yahoo! and MSN Search do not automatically punish entire websites for small amounts of hidden text. Google's market share of daily searches has fallen rapidly from 75% to 56% over the past few years, as other search engines find many web pages that Google has banned and cannot display due to Google's severely limited index.

One would have to live under a rock, having no access website referral logs, the news, or financial markets to believe that Google has been drastically losing market share to competing search companies.

The ease with which people can edit the Wikipedia creates a bias toward quickly adding incorrect factoids, while discouraging true topical experts from participating, especially if their opinion is likely to get edited out if it does not conform to the flavor of the day group-think.

One simple fact that must be accepted as the basis for any intellectual work is that truth "whatever definition of that word you may subscribe to" is not democratically determined. And another is that talent, whether for soccer or for exposition, is not equally distributed across the population, while a robust confidence is one's own views apparently is. If there is a systemic bias in Wikipedia, it is to have ignored so far these inescapable facts.

Conclusion:

I know one article is a small sample, and am not saying that I think the Wikipedia is a bad source for everything, just that in rapidly changing fields of commercial interests the Wikipedia is one of the last sources I would trust for an accurate view of the market. It is more representative of an advertisement that the most powerful sources in a market tell people that they should be thinking about.

Tactical SEO vs Strategic SEO

After talking with Andy Hagans and a few other friends I have got to thinking a lot more about tactical vs strategic SEO and marketing.

Many SEO tactics work well at achieving a certain goal, but to be wildly profitable you usually needs more than tactics, you need love from the strategic front. Many people who are great tactical SEOs do not build much equity because tactics without strategy have little value. Here are some examples:

Tactical:
Buy AdWords and AdSense ads to drive revenue.

Strategic:
If you are new to a fairly saturated market use AdWords and AdSense to roughly break even, hoping to increase your site exposure, link equity, and mindshare in the process...knowing that the real profits from an ad campaign can show up indirectly over time via organic search and product recommendation on other sites.

Tactical:
Get links.

Strategic:
Avoid actively seeking low quality links until your site has a significant history which includes many trusted backlinks.

Tactical:
Get quality links.

Strategic:
Create content, tools, or other packaged value systems which allow you to gain high quality viral links for a low aggregate cost. Create things that will make competitors want to talk about you.

Tactical:
Do anything to get links. Link bait link bait link bait.

Strategic:
Consider the potential outcome of your link bait if you are trying to cut others down to prop yourself up. As you build a trusted brand become more risk adverse.

Tactical:
Blog spam for links.

Strategic:
Talk about and become friends with the people you want links from.

Tactical:
Put everything on one exceptionally authoritative domain.

Strategic:
Own multiple brands that allow you to tap different market segments, or publish things that might not fuse too well with your main brand without hurting your brand. Design the brands so that they can extend in different directions.

Tactical:
Keep all your profits by doing almost everything yourself. Stick to what you know.

Strategic:
Admit your weaknesses and take on partners where neccessary. Find partners who add value where you are lacking.

Tactical:
Create high quality content.

Strategic:
Control content costs and make boatloads of average content. Build the authority of the site using exceptionally high quality content. Leverage that authority to profit from your boatloads of average content on that site. Segregate your high quality and high attention content from your lower value content, but after attention has passed ensure that the high quality content links trough to your lower quality content.

Tactical:
Use descriptive page titles to improve CTR and anchor text.

Strategic:
Title your pages such that the story spreads far. After the story has initially spread, consider changing the page title to something more descriptive.

Tactical:
Create a niche site in a low competition vertical.

Strategic:
If the vertical should be easy to dominate, make your core brand name broad enough that if you later want to expand you can.

Tactical:
Make as much money as you can right now.

Strategic:
Invest and reinvest. Make less upfront. Create passive income streams from properties that were designed around minimal customer service and growing into dominant self-reinforcing market positions.

Tactical:
Montize right away.

Strategic:
Limit initial monetization. Make the site look like a hobby or fan site made out of love for the topic so it is easy to link at. Program it such that it is easy to turn on monetization when the day to monetize comes.

Tactical:
Use consistant ad formats and layouts throughout your site.

Strategic:
On the home page and other high attention portions of your site use less ads to make your site more linkworthy.

Tactical:
Design for maximum ad clickthrough rate.

Strategic:
Consider linkability as a cost. Place ads in a slightly less aggressive position to make your content easier to link at.

Tactical:
Stay on topic to reinforce brand image.

Strategic:
Write some content for links, while writing other content for conversion. Occassionally drift off topic if there is a way to make a high link equity / high value / high authority idea relate to your site. If you are creative enough, everything in the universe belongs in a relational database that is tied to your content ;)

I am sure you probably have lots of other good examples about why strategy is important. What are your favorite SEO strategies?

Trusted vs Untrusted Links

About a year and a half ago I wrote an article called TrustRank and the Company You Keep which offered an image showing how many of the cheesy "buy PageRank here" type general directories were not well meshed into the web. That same image can be extended well beyond directories. Article submissions, reciprocal links, press releases, and other low effort low cost links put your site in a community of low trust sites. Even if the source originally had great trust, if they offer much greater value than cost, market forces such as:

  • other marketers using the same marketing techniques to promote low quality sites

  • improving relevancy algorithms

are going to neutralize the value. And then all you are left with is the risk.

Worse yet, a new site which is heavily co-cited alongside low quality sites may never be able to build enough quality votes to offset all of the votes of non-quality. So after you gain too many garbage votes, even when you decide to splash out to put the effort in or spend the money necessary to get quality votes it may not matter. The site status may be beyond repair.

And as long as you think of SEO as I need links I need links I need links then you are going to be more inclined to pick up a disproportionate volume of junky links, especially if you are not thinking of the web as a large social network. If you know your market well enough to read market demands then it is much easier to get editorial links that will hold value, and perhaps even increase in value as relevancy algorithms evolve.

Nothing is absolute of course, but it is all ratio driven. If the first thing you do with your site is put it in a community of low trusted sites then you are going to need to work much harder to develop a trusting relationship with Google. If you go for quality first then you have more room for error down the road.

Each engine has its own values which determine the quality of a link. Google is typically the best at scrubbing link quality, and Microsoft is generally no good at it. If the market seems so saturated that you think Google will be prettymuch out of reach no matter what you do, then it might make sense to concede Google rankings and be a bit more aggressive with getting bulk low quality links to dominate Yahoo! and MSN.

When I started with SEO I ranked for search engine marketing inside of 9 months on like $300 just by getting whatever spammy links I could that had PageRank, but Google's algorithms have long since evolved. The fact that many votes count as negative votes means that you can't just pick off the easiest links pointing at competing sites and catch up that way. You have to get some of their higher quality links right away to have a good enough of a trust-to-junk ratio for the bad stuff not to whack you.

Another Free $50 Google AdWords Coupon

Not sure how much it is for, but Google is giving out more free AdWords coupons at services.google.com/ads_inquiry/ecomxpo2006. Update: Barry says the AdWords coupons are $50 each, but unfortunately they are expired now. All is not lost though!

Here are some other coupons
AdWords Logo.
Google AdWords:

  • You can get a free $75 AdWords coupon here (or here or here or here) ... many options linked, as some of their coupon offers expire over time & we update this page periodically. The Google Partners Program also offers coupons to consultants managing AdWords accounts.

Microsoft is now offering coupons for free Bing Ads credit (formerly Microsoft adCenter).


Bing Ads: get a free Bing coupon today.

Bad Viral Marketing in Action... & Fixing It

So yesterday I mentioned that my friend Daniel announced our scholarship for bloggers...and the story went nowhere. It is quite humbling. The story would have likely made the Digg home page yesterday, but I think they pulled the submission from the upcoming stories for spamming, likely because some combination of the following:

  • many of the votes came from a button on this site instead of the site being voted for from that site

  • the domain name of our scholarship site generally sucks
  • our scholarship domain could likely use a bit of work on improving its trustworthiness
  • some editor may not have liked the story

Since I did absolutely no marketing outside of the Digg submission and a mention here, my marketing sucked...too risky, too stupid, and clearly not comprehensive enough.

I think I have been quite lucky and successful recently, to the point of becoming a bit lazy and arrogent...which totally showed in the lack of spreading of The Blogging Scholarship. My lack of focus on, and general apathy toward, the launch was apparent by the results. I phoned it in, thinking that my blog had enough reach to carry the story, just phoned in the idea, and failed brutally. We only got a couple applications yesterday, which is absurd considering how viral the market is, and how good the general idea is.

You know you are screwing something up quite bad if

  • your site has great reach

  • friends are hooking you up
  • you are giving away thousands of dollars
  • toward a cause many people care about
  • to a viral market
  • where many people share your interests
  • and many students are heavily in debt
  • and the story still goes nowhere

thus...we decided to change The Blogging Scholarship to make it more remarkable...

Change:
Instead of giving $1,000 quarterly we are going to give away $5,000 once a year.

Reasons:

  • $5,000 sounds much more remarkable than $1,000, and will help whoever gets it much more than $1,000 will help 4 people.

  • By doing it once a year it is rare enough that it is special. If we did it quarterly it is not going to be as much of an event, and would be harder to get coverage or community involvement.

Change:
Pinging a few friends to seed the story...hoping they can give it a bit of love. ;)

Reasons:

  • I know many of the big dogs in the blogging space.

  • Some of my friends have websites which are more relevant to the idea.

Another thing I could have done to make the story more popular would have been asking a few bloggers what they thought of the idea, or if I should change it at all BEFORE I launched it. But I was arrogant and lazy and did not listen to my own advice, thus we failed, and needed to reformat the scholarship to make it more appealing.

The good thing about really good or really bad viral marketing is that you usually have great feedback almost immediately after launch, and if you listen to it, you can change to help spread your ideas further.

We are still looking for lots of applications, so please apply yourself or nominate a friend today.

Killing Google PageRank: Making Relevancy Irrelevant

This is old news, but a while ago on TW I posted that UPI, a 100 year old company, was overtly selling PageRank, even mentioning PageRank on their advertisement pages. Search works so well because they measure relevancy using things that are hard to manipulate or things that people wouldn't generally think to manipulate. Thus, if a 100 year old slow moving company is doing something you know that the method of relevancy they aim to manipulate is generally likely already dead.

Google will likely filter out overt link buys like this
Link Spam.
especially when they are marketed this aggressively on Google's own ad network
Buy PageRank from UPI.
If a link buy is so overt that people would talk about it, then an engineer or algorithm has probably caught it already. But that sort of example can be seen as a proxy for the market as a whole, and Google have also significantly lowered the weighting on raw PageRank scores over the past few years, because too many people know about it and manipulate it. Just looking at PageRank is nearly as useless as a meta keywords tag.

The First Ever Blogging Scholarship

My friend Daniel recently announced that he was going to give away a $1,000 scholarship to bloggers from our scholarship website. I think it is the first ever college scholarship for bloggers. Please show some love by doing any of the following:

  • nominating a friend (or yourself) for the scholarship

  • blog about the scholarship
  • vote for the winner (coming in 1 week)
  • Digg it

Get a Top Ranking in Google in 1 Day for Free

Google recently launched their Google Customized Search Engine, which allows webmasters to easily integrate Google search results into their site while also giving webmasters editorial control to bias the results.

Webmasters can bias the results harnising the power of Topic Sensitive PageRank, tag relevant results, allow editors or users to tag relevant results, and select a seed set of sites to search against or bias the results toward (and sites to remove from the results).

Surely some shifty outfits will use this as a way to show their ranking success, but this also makes me wonder what the net effect on Google's brand will be if people see powered by Google on sites which provide terrible relevancy, or results that are obviously biased toward racism or other horrific parts of humanity. Will searchers learn to trust search less when they start seeing different Google results all over the web? Or will anyone even notice?

Will most people be willing to subscribe to relevancy which reinforces their current worldview?

This release essentially will make Google the default site search on millions of websites, which is great for Google given the volume of site level search. I still think Google's stock is priced ahead of itself trading on momentum and short covering, but this release gives Google a bunch more inventory and further establishes them as the default search platform.

By allowing webmasters to easily integrate results biased toward internal content, backfilling the results with other content when the site does not meet all of a searchers needs, and then allowing the delivery of profitable relevant ads near the content, Google is paying webmasters in numerous highly automated ways that build great value by being layered on top of one another.

I also have to think this is going to further place a dent in the business model of running directories, or other sites with thin content that do not add much editorial value to the subject they talk about. This blend of editorial and algorithms is invariably going to kill off many editorial only listing companies.

As an SEO, I think this customized tool can also be used to help further test the depth and authority of a site relative to others in its group by allowing you to bias the results to multiple similar seed sites and see which pages on those sites that Google promotes most. This could even be used as a tool to help you determine which domain is more valuable in terms of ranking potential if you are comparing a couple domains that you are thinking of buying.

Search Engine Marketing Glossary

I created a creative commons licensed search engine marketing glossary. Do whatever with it that you may want to. Also if I missed any definitions or did a poor job defining any term feel free to let me know in the comments of this page and I will try to fix up the error of my ways.

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