Yahoo! Tells Microsoft to Bid $40 a Share

Yahoo! shares were trading in the $19 range before Microsoft offered to buy the company for $31 a share. People inside of Yahoo! talked to the NYT and WSJ stating that Monday they will reject the offer and request at least $40 a share. Unless Yahoo! accepts this deal their shares will likely fall, which will lead to lawsuits from shareholders. The one thing that could help Yahoo! unlock greater short term value would be partnering with Google on search. But if they did that, it would suck for SEOs and web publishers...90% of the search market would be controlled by Google, which would give Google even more leverage over content providers.

For Yahoo! to give Google control of search they would need to curb their ad network, which not only has syndicated search and ad partners, but also powers a lot of arbitrage and direct navigation domain traffic. Yahoo!, being far more desperate for traffic and revenues, likely pays partners a bigger cut than Google does. Yahoo! being in play cuts the value of many thin arbitrage models (like Marchex) because

  • Yahoo! going to Microsoft would make Microsoft /Yahoo a more efficient marketplace and make it hard to arbitrage one through the other
  • Yahoo! Search being outsourced to Google would allow Google to pay publishing partners a smaller piece of the pie and have a tighter control of the ad market. Google recently killed Ask's sub-syndication deal.

Marchex posts Q4 results on the 14th. If they underperform they may have to start layoffs, cut their dividend, or start selling off some of their domain portfolio. Assuming names were sold one at a time, in a BuyDomains.com like format, more clean domains on the market would present a great opportunity for SEOs and smaller independent publishers, but they may sell off names in large blocks.

A side shoot of this Yahoo! in play even is a great blog post by Henry Blodget on how Microsoft's forward vision on ad supported software is failing to realize the full potential of subscription based software:

Corporations are shifting to cloud-computing platforms--Software as a Service vendors like Salesforce.com and NetSuite, Google Apps, etc--but, for the most part, they are not shifting to "free software supported by advertising." On the contrary, they continue to pay fat, per-employee license fees. Even some corporations running Google Apps pay license fees. The fees are lower than the per-seat costs charged by Microsoft, but they're in the same same ballpark (according to the NYT, big companies pay about $75 per Office seat per year vs. $50 for Google Apps).

In the current web 2.0 market, far too many start ups are focused on being ad supported rather than adding enough value to be able to sell a service. The easiest way to protect yourself from Google is to create something worth paying for.

How to Determine the Effectiveness of Your Internal Link Structure

Question: How do I determine how I am best utilizing my PageRank? How do I know if my navigation is successful?

Answer:

  • Google Webmaster Tools shows your internal link counts to different pages. You can use that to show which pages are being emphasized on a crude level.
  • Optispider ($129) shows on site link structure and compares link text to page titles
  • SEO4Fun has a free PageRankBot tool which shows internal link flow. I think it is a bit complex to set up, but is cool when you get it set up.
  • If you have pages of limited importance but link to them frequently (like sitewide links to your privacy policy, shipping, or about us page) consider using nofollow on those links.
  • Track a few pages of your site with a tool like CrazyEgg to see what links users are clicking on and if you are drawing enough attention to the most important assets on your site.
  • Use data from your web analytics tools to focus more link equity on your most important (highest traffic and best converting) pages

A few more advanced ideas

  • If your site is large and you keep producing new content, use Google's date based filters to look for new pages that are of low quality / noisy (like a page dedicated to a photo but with no text on it, or other common duplicate content issues)
  • Use analytics to track how many pages (and which pages) are pulling in traffic. Compare those pages with all the pages on your site to see if you can free up some dead weight, or if you have a valuable section of your site that is not well linked to. You can use Xenu Link Sleuth, a sitemap generator, or data from Google Webmaster Tools to see what pages are linked to (and perhaps getting indexed).
  • If a particular page works well for you consider adding more content to that page to pick up a broader basket of related keywords. If a particular query works well for you consider creating a second page to target that query.
  • If you have a high authority page that links out to many other websites consider adding more internal links to that page to keep more of the link flow internal.

Why I Think CJ.com (aka Commission Junction) is a Garbage Affiliate Network

I run a good number of websites in a variety of verticals. One of my sites that does exceptionally well in the search engines monetizes poorly with contextual ads and does not yet have the scale to sell direct ads, so I tried integrating affiliate ads on it.

When I initially applied for CJ with this site, the advertiser I wanted to partner with rejected my site (I am guessing because there was a new account associated with that site). The traffic quality and relevancy are as high as you can get though. About 3 months later that same advertiser contacted me asking me to join their affiliate program with my search-marketing.info website, which is wildly off topic. I joined the affiliate program and also added my relevant site to the account about two weeks ago. I integrated the offer and waited for the money to roll in. But did it?

This particular affiliate program was a lead generation program, which I figured had a delay in reporting while the leads were classified and approved. This site is a high traffic site in a big money vertical. The advertiser's ad was integrated similarly to how it is integrated on other sites still in their program today, and their ad was seen by about 100,000 people.

I logged in today and still no conversion. Odd. Weeks for an approval? Hmmmm.

I looked at my invalid clicks report and it said my offer from this advertiser was disapproved. I was not told why, and was not even informed of this disapproval (from the advertiser who approached me) until after I searched out the information.

Meanwhile that same company is paying search engines thousands of dollars to buy similar traffic to the stream they rejected from me. I know someone in upper management in the marketing department at that advertiser, so I will ping them to see what is up with their affiliate manager, but how many publishers get scammed like this every day? Sleazy workflow their CJ.

The value add for publishers going through an affiliate network (vs going direct) are

  • having fewer accounts
  • independent reporting (for if you don't trust the advertiser)
  • the offer data on top performing offers

But on the down side,

  • many other marketers are looking over the same offers you are
  • some networks (like CJ) require tracking images or other footprints that identify your site as an affiliate site to search engines (and search engines do have algorithms to detect and demote certain types of affiliate sites)
  • communications channels are generally worthless when you add a bulky affiliate network to the mix

I have had a number of affiliate networks come to me asking me to join them, often offering reduced rates, but I still don't see their value add, especially after this experience.

Google to Give Away MP3 in China

The semi-legal and illegal spread of copyright information keeps driving value toward the aggregators. Google, which already has a music search service and owns YouTube, is looking to give away licensend music to win marketshare in China.

From the WSJ

Vivendi SA's Universal Music and about 100 other foreign and domestic record labels have been working with Top100.cn, a Beijing-based Web site that currently sells licensed music downloads for 1 yuan (about 14 cents) each, and Google. Together, Top100.cn and Google would provide free MP3 downloads with value added services, people familiar with the plans say. The new search options, for example, promise to give users free access to a database of information about their favorite artists -- from concert listings to links to special ring tones.

If Google licenses lyrics and allows user feedback on songs, they prettymuch aggregated the entire value stream in that marketplace, at least outside of experiencing live music. Fierce competition for attention will drive virtually all publishing models in that direction. What do you offer that is live or that aggregators can't take from you?

Makeshift Anchor Text... Link Title Attribute vs Image Alt Tags: Which is Better?

One of the reasons I was so motivated to change the tagline of this site recently was because the new site design contained the site's logo as a background image. The logo link was a regular static link, but it had no anchor text, only a link title to describe the link. If you do not look at the source code, the link title attribute can seem like an image alt tag when you scroll over it, but to a search engine they do not look that same. A link title is not weighted anywhere near as aggressively as an image alt tag is.

The old link title on the header link for this site was search engine optimization book. While this site ranks #6 and #8 for that query in Google, neither of the ranking pages are the homepage (the tools page and sales letter rank). That shows that Google currently places negligible, if any, weight on link titles.

I have ranked other sites for more competitive queries based exclusively on internal links (without thousands of links from other sites, like those pointing at the SEO Book home page).

Does the image alt text carry more weight? In a word, yes. Here is now I proved that to myself through yet another site error. :)

One of my hobby sites has a fairly flat file structure, and some of the internal pages are somewhat linkworthy. The site was not marketed aggressively and the only sitewide link to the homepage was the logo, which I forgot to put an image alt tag on. Google ranked 2 pages on the site well for the core keyword, but neither of those pages were the homepage. I noticed the lacking image alt tag, fixed it, and within a week my homepage was outranking the other pages.

If the only link to your homepage is a logo check the source code to verify you are using descriptive image alt text.

How Long Does it Take to Rank in Google? How Many Hours do I Have to Work Each Day?

Question: How long does it take to rank a website? How many hour of work do I have to do each day to compete and rank my website at the top of the search results?

Answer: I get this question almost every day, and it is one of my least favorite questions to answer. So I figured I would answer it as best I can once here, then point people to this page when I get asked again. To compete in competitive marketplaces you have to out-think the competition or invest more than they do. When you start from how little or how quickly you have the wrong mindset. Ask not what your search results can do for you, but what you can do for your search results. :)

Keep launching quality original content, keep working at brand building, keep making social connections, and watch the traction build. When you are new, can you predict what one idea is going to make the difference? For most people I don't think so. Some types of success are deliberate, but for most independent webmasters, I think they accidentally step into success by working hard, being ignored, and then watching something blossom that they did not realize the importance of when they first launched it.

After you have some success then you can engineer further success, but for many it starts out as an accident or a byproduct of constant motion.

How long does it take to rank?

If the search results are uncompetitive (use SEO for Firefox to survey the competitive landscape) you might be able to rank in a month even if your site is brand new.

Is your site brand new? If so, how old are the top ranked competing sites. If they are a number of years old then it is probably going to take at least a year to catch up unless they are bad at marketing and link building or you have a great marketing idea that will help you build many organic links. If the companies that are ranking are multi-billion dollar corporations then you can't outrank them with a one man website unless your site is integrated into the conversation of that marketplace and/or your site offers valuable tools and/or original linkworthy content.

If your site is brand new, you probably want to develop links over time in a fairly consistent manner. If you grow x links this month then you want to create x or more the next month. And that number sets the baseline for the following month. Months where you have no viral marketing ideas try to list your site in a few quality directories, join trade organizations, and get other clean links.

If you are sitting on an older site you may be able to grow links a bit more aggressively, and you may be able to get away with being a bit more aggressive with the anchor text you use in the inbound links.

In many regional search markets outside of the US the competition is much less fierce than it is in the US, and it is easy to rank for some fairly competitive keywords.

An exact match domain name may also provide ranking benefits in some search relevancy algorithms, which allows you to rank quicker without needing to build up as much link authority.

How many hours of work will it take?
I have ranked sites on 5 hours of work, and I have put hundreds of hours of work into sites that do not rank as well as I want them to.

  • How hard are your competitors working? If you are unsure track their current link count and their link growth. Also look for signs of public relation and the quality level of their inbound links.
  • How big is their head start?
  • How much are they investing?
  • Are there ideas they forgot to focus on?
  • Is your brand more focused than their brand?
  • How much risk are you willing to take?
  • Are competitors weighed down by bureaucracy?
  • Are you more passionate about your topic than the leading websites? Eventually people will discover that, especially if you are not afraid to market yourself.

Ask not what your search results can do for you, but what you can do for your search results. :)

Survey Says... Please Help Make SEO Book Better :)

Hello kind reader of SEO Book. I am trying to add some new features to the site and wanted your feedback to help make the site better. Please fill out the following survey to help make this site better reflect what you want from it. 15 quick questions including name and email (and both of those are optional). [Update: Survey closed. Thank you.]

Why AdSense Earnings Are Sharply Dropping

WebmasterWorld has another thread about lowering AdSense prices.

When the economy is good and advertisers have robust ad budgets, an ad network might be willing to sell them whatever they are willing to buy. If the advertiser wants to overpay for some ads and associate that spend with branding then so be it. But when the economy slows down, the ad marketplace needs to separate the best ad inventory from the weakest ad inventory to protect the rates of their best ads.

From Google's perspective, search is the golden goose tied directly with conversions. Syndicated ads, which can lead to conversions, may often carry a premium price based on branding value. Here are some of the forces that might be lowering AdSense earnings

  • Some brand advertisers cutting their ad budgets, trimming brand related ads before they cut direct response ads.
  • Those brand ads being replaced by less trustworthy ads from smaller advertisers who bid less and are less likely to get clicked on.
  • Google changing the clickable region of AdSense ad units.
  • Google lowering the estimated value of content clicks to help protect the value of search clicks and shift more of their network spend toward search.

Given Google's market dominance over the contextual ad market there is virtually no floor to how low they can price AdSense ads on non-premium publishing partner websites.

I have one site where the ads are AGGRESSIVELY integrated into the content, where that site gets thousands of search driven visitors per day in a big money vertical. That site has a CPM rate which is roughly equal to what one to two clicks would cost if I had to buy that traffic from Google directly (rather than me arbitraging their organic search results then selling that traffic). Clearly there has to be a better way to monetize that site. The ad prices are so cheap that I would be the buyer if I had a higher value model in that space.

If you have been using AdSense as a business model now is a great time to create new revenue streams and test shifting from an AdSense ad seller to an AdSense ad buyer.

Selling Ads Without a Precise Brand = Bad Business Model

JP Morgan Chase published a research on internet companies titled Nothing But Net [PDF], hyping the future of web ad growth.

Yahoo!, a leading internet brand (a brand that means nothing) is up for grabs. The NYT, a generalist news company, is also seeing their stock tank, in spite of a market leading position in their vertical.

As large media sites open up to user generated content they are going to keep losing brand and value to niche channels owned and operated by people who are so passionate about their subject that their brands have purpose and lasting value.

What a Microsoft Acquisition of Yahoo Means to Webmasters & Web Publishing Business Models

As a person who has studied search for many years I thought I would analyze how I thought a Microsoft acquisition of Yahoo could change online publishing and internet marketing strategy and business models. This post assumes that the purchase goes through with Yahoo's board and regulators, and that the underlying search architecture and ad platform of Microsoft is used rather than Yahoo's current mess.

Organic Search

  • Yahoo! Search is stale. They place way too much on user generated content and worthless tag pages located on sites with a high authority score. Microsoft Search makes it much easier to rank pages on lower authority sites so long as they have fresh inbound links.
  • Like Google, but unlike Yahoo, Microsoft places significant weighting on domain names in their relevancy algorithms.
  • Microsoft closed their small business directory. Many of Yahoo's regional directories no longer accept paid submissions. It is uncertain what parts of Yahoo might get killed off in staff cuts before and after the acquisition. Submit to the Yahoo Directory while you can.
  • Yahoo Shopping and Microsoft Shopping are two of the bigger shopping sites clogging up Google's search results for many queries. A potential merger of these could help the top one rank better while freeing up space for other competitors.
  • Yahoo places 4 ads above the fold for commercial searches, driving down organic search results. If Microsoft buys them and runs fewer ads to win marketshare that allows more of the organic search results to receive a solid stream of traffic.
  • Yahoo offers a paid inclusion program to sell rankings in their organic search results. If Microsoft buys Yahoo I believe that program will be phased out as it is hard to image that it makes as much profit as it costs in public relations damage, especially if Microsoft intends to catch Google in search.
  • Yahoo! News is the leading news site on the web. If Microsoft combines that asset with default installed desktop widgets on Vista they can further enhance that market position.
  • Microsoft is bad at following 301 redirects, but they have had that problem for a while, and one would hope they would get that fixed prior to powering Yahoo! Search.

SEO Recommendations

  1. Spend some time tracking rankings in Microsoft to better learn their relevancy algorithms if you have not yet studied them.
  2. Ensure your website has a fresh content strategy or reason to keep picking up new links.
  3. If possible, when starting new projects, try to build them on domain names that match your primary keywords.
  4. Submit to the Yahoo Directory while you can. If the Yahoo Directory dies off it may create a hole in the market leaving a profitable business model for another directory or even a site like Mahalo to take its place as a leading generalist editorial catalog of websites.
  5. If domain authority (i.e.: running few large sites) was a big piece of your search strategy creating numerous smaller niche sites once again became a profitable strategy.
  6. If you were reliant on paid inclusion for traffic that traffic stream may dry up, so your best off learning about Microsoft's ranking algorithms ASAP.
  7. Check to see if your site meets the requirements to be included in Yahoo News.

PPC Ads / Paid Search Advertising

  • Yahoo! Search's ad platform is still exceptionally clunky. In spite of being recently upgraded they still do not have a public facing keyword tool and only let most advertisers use their keyword tool while they are in the middle of creating a search campaign. Microsoft, is much more open and innovative with their ad platform and advertiser tool set.
  • Google has been hoarding data for years without giving much of it back to prospective advertisers. When Yahoo upgraded to Panama they followed Google's path. Microsoft recently launched an Excel ad plugin that shares a ton of useful data with advertisers. If Microsoft buys Yahoo! their data will become more accurate and likely force Google to show more aggregate advertiser data.
  • Ad campaign management gets easier because advertisers only need to maintain two ad accounts, which might make self-management of search campaigns more practical for small businesses.

Pay Per Click Ad Recommendations

  1. Open an adCenter account using this coupon code for $50 in free ads, and set up your adCenter account to get used to their interface and ad platform.
  2. Use the Ad Intelligence plug-in to see how sweet it is.

Display & Contextual Ads

  • Microsoft purchased aQuantive earlier this year to own large scale display ad serving capabilities.
  • Yahoo has more pageviews than any other website. If behavioral data has hidden latent value they should be able to leverage it across their network and partner websites.
  • This merger will likely take YPN out of perpetual beta, creating a credible alternative to AdSense, which will increase the share paid to smaller publishing partners.

Display & Contextual Ad Sales Recommendations

  1. Display ads likely to fall in value due to recession, and a glut of inventory from social media and other websites, so I still like higher value businesses that remove greater friction from commercial transactions when possible. The one exception to this belief is in game ads, which I see as having a lot of upside if you can publish games good enough to attract a large audience.
  2. The combining of the Yahoo and Microsoft ad networks should create many arbitrage opportunities.
  3. If you have a site that profits from AdSense it is in your best interest to try Microsoft's network after it launches. Odds are that Microsoft will be willing to give publishers a large share to win marketshare, and giving Microsoft a try will help them create a more robust network which forces Google to increase AdSense payouts.

International Search

Short term I believe this acquisition is about gaining momentum in the US market. But Yahoo is strong in Japan. They also have significant market coverage in Spain, South Korea, and China. Microsoft has notable search share in some European countries. Both have about 4% marketshare in the UK. You can learn more about international search by downloading this 2007 Global Search Report [PDF].

I think a solid strategy going forward for Microsoft to gain search share in foreign markets is for them to offer their operating system free or at a reduced price for bundling search in the desktop. They already give away operating systems in exchange for feedback or exposure.

If the Microsoft purchase of Yahoo clears, expect Google to start distributing a Google flavored version of Ubuntu to the general public before the year is out. Inside of 5 years Microsoft's operating system will be free or irrelevant.

If you want to read the documents that started Microsoft's major push toward web search they are here and here.

Danny Sullivan offers some great coverage of the deal here

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