I got a few dozen emails chewing me out for our keyword tool breaking. This post is just to let you know that it is fixed and to say thank you to those people who let me know about it breaking.

Many SEO Book readers have seen Google Trends before, but did you know that Google Checkout also has a trends feature? Google has those touch-points, email data (now with a mailing list feature), AdWords bid data, conversion data, analytics data, and search referral data.

A recent research paper reviewed Google's internal Prediction Markets [PDF]. Three key quotes from that research...

Biases

Google's prediction markets are reasonably efficient, but did exhibit four specific biases: an overpricing of favorites, short aversion, optimism, and an underpricing of extreme outcomes. New employees and inexperienced traders appear to suffer more from these biases, and as market participants gained experience over the course of our sample period, the biases become less pronounced.

Arbitrage opportunities

As further evidence of short aversion, in order book snapshots collected each time an order was placed, we found 1,747 instances where the bid prices of the securities in a particular market added to more than 1, implying an arbitrage opportunity (from buying a bundle of securities for $1 and then selling the components). In contrast, we found only 495 instances where the ask prices added to less than 1 (implying an arbitrage opportunity of buying the components of a bundle for less than $1 and then exchanging the bundle). The median duration of these arbitrage opportunities was about 2 minutes.

The effect of proximity

An important caveat to our results is that they tell us about information flows about prediction market subjects, many of which are ancillary to employees' main job. this may explain why physical proximity matters so much more than work relationships - if prediction market topics are lower-priority matters so much more than work relationships - if prediction market topics are lower-priority subjects on which to exchange information, then information exchange may require the opportunity for low-opportunity-cost communication created by physical proximity. Of course, introspection suggests that genuinely creative ideas often arise from such low-opportunity-cost communication. Google's frequent office moves and emphasis on product innovation may provide an ideal testing ground in which to better understand the creative process.

Google's new mailing lists wipes out the need for many boutique email services. They know what features they are going to roll out before anyone else does. And they have market moving data before others do. Google's AdSense is the fuel that drives web innovation. And they can decide at any time if a competing service is no longer viable to push it toward its demise.

Virgin real-time data + arbitrage identification algorithms + understanding investor flaws + algorithms to target mental flaws + direct and indirect market influence = $

As I see it, competitive forces between traditional publishers, market saturation from the bottom, and market influence from the likes of data hoarding companies like Google are going to quickly commoditize anything that is sold as information. To survive you need emotional touch-points that consumers share.

A friend of mine was a leading affiliate for an information product, selling over $300,000 worth of someone else's service. How did they reward him? They cloned his sales channel and killed his business model. Everything that is not a memory, brand, or experience is becoming a commodity. What prevents you or I from becoming a commodity?

You become what you surround yourself with, and when you push out you attract the right people or the wrong people. Threadwatch, for example, attracted the wrong people, or perhaps the wrong mood and tone from the right people. But you could also engineer the silicon valley in your industry if you work hard enough.

In the information age, where marketers

• have granular controls
• can remain anonymous
• can market brands in minutes
• leverage reverse billing fraud and computer destroying viruses
• can distance themselves from the fraud via affiliate programs or pushing blame on algorithms

there are a lot of scams to be wary of. Especially when there is so much information being produced to where content is published in biased sound-byte format to whore for attention. The stakes for calling someone out are big, because you need attention to profit, and unfortunately, the structure of the web has changed:

Google and it's copy-tition were designed 10 years ago. But the web has changed significantly in the past decade. Google was built to index a web that no longer exists... a web where people still engaged in social linking behavior, for one thing.

But there are lots of experts who keep learning and change with the markets. Some people give because they like to learn and they are not driven by short term profits. Teach a man to fish, etc.

Each day we chose who we want to listen to, who we want to be like, who we want to like us, and why we want them to like us. Those relationships are the only thing that prevents us from becoming commodities.

"You're lucky in life if you have the right heroes. I advise all of you, to the extent that you can, pick out a few heroes. There's nothing like the right ones." - Warren Buffet

My web heroes thusfar are Tim Berners-Lee and Seth Godin. Who are yours?

In most markets worth being in and with most sustainable business models, sales is not a one time event, but a process. You first have to create awareness, then build trust, then finally make the sale. Do all 3 happen at once for some people? Sure, but probably not for the majority of customers.

My big issue with hyping social media is that most things that are popular on social media sites do not actually build credibility, and that you are going to have marginal success building your brand if you start by focusing on these broad third party communities rather than YOUR TOPICAL COMMUNITY.

When I first started getting well known there was no Digg. There was a Slashdot, but exposure on Slashdot did not make or break me. What really sent my personal brand on a sharp upward trajectory was when Danny Sullivan mentioned me. Because he felt I was comment-worthy many other people suddenly thought I knew what I was talking about and that I was trustworthy.

That perception of trust, audience, and personal-brand that Danny had spent years building was in some part transferred to me. Am I as well known as he is? Of course not, but while sites like Digg have audience they tend to lack that perception of trust and personal-brand that transfers BUYING CUSTOMERS to your site.

If a person who has trust and a broad base of readership recommends you that creates immediate sales. I see that in my daily sales data and my affiliate statistics. If you get featured on social media sites it does not lead to many sales. Perhaps that exposure leads to awareness, which can further be enhanced by writing about that community, buying banner ads from sites like Lead Back, or by writing other create subscription-worthy content, but generally in content editorial link from a trusted expert creates more sales than exposure on a nearly automated hollow social news site.

If your site is new to the market and you want some exposure you have two options

• eat Taco bell for a month, take the world's biggest crap, then write a leading 10 step how-to guide on how-to polish it, or
• create things that people INSIDE YOUR COMMUNITY will find useful

One of those strategies will get you in the Guinness book of world records. The other will make sales.

Does your content build trust?

Straight Up Spamming
The economics of spam.

Thin Arbitrage
In regards to that $130 million investment in Geosign by American Capital... it turns out to be the arbitrage investment that was not:

American Capital CEO Malon Wilkus told TheStreet.com that as a result of the split-up, his firm recovered a "substantial" amount of its original investment in the form of cash proceeds. He declined to give the amount.

Domain Names
Oversee.net bought Moniker. They purchased SnapNames earlier this year. They must be pretty good at business to be able to afford over $100 million in acquisitions in one year.

Never trust Network Solutions again. They are now registering any whois lookups that occur on their network, and are challenging RegisterFly for the dirtiest register ever award.

Marchex has dropped below the sharp fall off back when they lowered Q3 2007 guidance. They currently trade at an 82 P/E ratio, and could unlock a lot of value if they had a real development strategy or started selling off some of their names. A Domain Tools blog post highlights how generic domains could appreciate if capital was more accessible for premium domains. I think before that happens companies like Marchex are going to need to issue a new strategic memo that is valid in the current marketplace. The Domain Tools blog post also had a comment from a search marketer:

Besides, the real downside to generic domains from my point of view is that every day, the “type-in traffic” generation becomes smarter, or dies off. More people use a medium such as Google or other search engines. With search engines, sites such as “Travelocity.com” and “travel.yahoo.com” become the apparent winners for the term “Travel”. Not Travel.com

As a search marketer who keeps spending more and more on Google ads, I firmly believe the above comment, and this is why I have been buying decent names and developing them. A balanced investment strategy where pieces build off each other and I put my marketing skills to work will outperform a strategy where I enter a saturated market late without a unique strategy. A strong domain is a great advantage, but you can still succeed with only a decent one and a bit ofsweat equity.

Yahoo! Buzz Index
Perhaps this is an old arbitrage strategy I somehow missed, but the Yahoo Buzz Index links to a list of popular searches. What better way is there to rank for them and drive traffic than to reference them on an high authority page, likeso:

That might be a nice strategy for other leading publishers to follow, though it makes Yahoo look a bit desperate in their marketing approach.

General Publishing Trends
Seth Godin highlights trends in the music industry, which is a set of trend applicable to just about every industry.

Microsoft offered $1.2 billion, a 42% premium over market valuation, for Fast Search & Transfer. Fast Search & Transfer is largely an enterprise search solution. As an example web index to showcase their technology years ago they created AllTheWeb. In early 2003 Overture bought AllTheWeb, and Fast's web search unit for $70 million cash. Yahoo bought Overture the same year for $1.63 billion.

In 2005 Fast again appeared on the web search scene when they started powering organic search results for Miva, but they do not have their own search destination. Earlier this year Fast made noise about creating an independent ad network that allowed publishers to keep the bulk of the profits, but OpenAds already exists, and I have not heard much of Fast's proposed AdMomentum after the initial hype.

Fast recently missed quarterly numbers and changed their accounting practices. They do not have a great business model compared to Google (enterprise search is nowhere near as profitable as web search). If general web search relevancy moves beyond measuring links and more toward user feedback perhaps owning Fast would help Microsoft increase their core relevancy algorithms, and enterprise relationships can probably help them cross sell web ads too.

Update: Fast is to lead the Pharos search project, which will be funded in part by European governments. If Google gets regulated out of market domination in Europe then Microsoft may have bought a key competitive piece.

Potential search plays later this year:

• IAC is only worth about $7.2 billion. Earlier this year they announced that they are planning on spinning off into 5 major companies. Perhaps when that is done Microsoft, eBay, or Amazon.com should try to buy Ask.
• Why there is no money in second tier search stocks. They are all losing marketshare and money. CNET passed on buying Looksmart for a nominal sum while purchasing FindArticles.
• Perhaps search engines will start buying more major content sites. AOL is wasting away, and what else is out there?