The Seed Capital for Startups Blog

This Kinderstart Brouhaha

I have been following the Kinderstart story closely and must confess to a degree of amusement. Hang out at any of the big webmaster forums, and you will read daily reports from people whose websites vanished from Google's index overnight due to some intentional or unintentional SEO faux pas.

When this happens, Google is judge, jury and executioner. The site owner has no recourse. Years of work building up traffic goes down the drain in an instant.

So, it didn't surprise me to hear that one company is going after Google over this.

Perusing technorati for posts on the Kinderstart, I found these words of wisdom at IdeaGrove:

But Orchardo believes that whatever the law says, the time will come when the public no longer accepts Google's secrecy.

The public has different expectations for companies that become dominant in their markets and, as a result, assume a big role in our lives. Dominance -- rather than any corporate misstep -- is the reason for the backlash Microsoft began receiving after its Windows 95 peak, and it is the reason for the backlash Wal-Mart is receiving today.

...

Frankly, we much prefer Technorati's transparent ranking system to Google's PageRank mumbo-jumbo, which has birthed a cottage industry of charlatans and witch doctors who charge companies an arm and a leg to mysteriously boost their Google rankings.

That's soooo Web 1.0, Google. Oh well -- enjoy your secret handshakes while
they last.

I'm not a search engine specialist but agree with the more knowledgeable people who think that Google has become so paranoid about being gamed by the so-called SEO experts, that it's forgotten about delivering quality search results to the rest of us.

I'd like to recommend a new search engine called Clusty. I find it gives me better quality results than Goog or any other SE for that matter. Here's another plus about Clusty from its privacy statement:

We at Clusty don't track you. Our toolbar doesn't track you. We don't want to know your email address.

Just search, all the time. No questions asked.

How refreshing in an age where Google tracks your online habits in its unceasing efforts to bombard you with advertising at every opportunity.

Seth Godin, you really missed the point on Google

My esteemed blogging colleague, Seth Godin, really missed the point in the story about the company suing Google over its disappearance from search results.

Here is Seth's entire post on the matter:

The new SEOs--lawyers

Joe points us to this article--a company is suing Google because their pagerank is too low.

Perhaps the same strategy could be used on consumers who don't want to watch your commercials...

The brevity makes me conclude that Seth didn't really read the article, Kinderstart Sues Google Over Lower Page Ranking. At best he just scanned it. The article states:

A parental advice Internet site has sued Google Inc., charging it unfairly deprived the company of customers by downgrading its search-result ranking without reason or warning.

Search-result ranking does not refer to Pagerank. They are two different things. It refers to what SERP (Search Engine Results Page) your site appears on for a search on a particular term. (Yes, it's a bit confusing at first.) Let me give you a personal experience with this. I run a hobby site at www.antiventurecapital.com. For many years, if you did a search on "venture capital", it usually showed up on the second or third SERP at Google. It was always top five. Then one morning two years ago, I discovered that the site was no longer in the first five SERPS. My immediate assumption was that it had slipped a few pages downward to maybe 7th or 8th SERP. To make a long story short, the site had completely vanished as far as Google was concerned.

It was as if the site no longer existed.

About two months later it magically reappeared in Google's search results--but this time it was on a SERP in the mid-80s. I was only able to find it because of www.googlerankings.com which will scan up to the first 1000 SERPS to find your site's position in the results. No one drills down past the 5th SERP manually.

That's what this story is about. This is what happened to Kinderstart and why it is going after Google--and rightfully so.

Some SEO readers will jump to the conclusion that I was trying to game the system and that Google penalized me for it. The truth is that I wasn't. Recall that above I called my site a "hobby site".  I had better things to do with my time than spend endless hours tweaking it for SEO purposes. Besides, the site was always sitting pretty somewhere in the top five SERPS.

Seth compares Kinderstarts move to suing consumers who don't want to watch your commercials. Bad analogy, Seth. A better one would be to describe it as a situation where a shop-owner goes to work one morning and discovers that his Main street store has been bulldozed, the debris removed, and a mobile taco vendor is parked in the middle of the now empty lot.

That's what it feels like for site owners when this happens.

"Google does not generally inform Web sites that they have been penalized nor does it explain in detail why the Web site was penalized," the lawsuit said.

No, it certainly doesn't. There's no recourse at all when this happens. Google is your judge, jury, and executioner.

Now you might be thinking, "So what Peter, if this does happen it's probably a rare event." Wrong. It happens a lot. Everyday Google nukes a few hundred sites in this manner without warning or explanation, according to the scuttlebut on webmaster forums. Hang out at some of the popular forums and you will see that it's true. I used to frequent Webmasterworld where tears are shed daily over these vanishings. Here's some irony. The guy running Webmasterworld was always firing off private messages to anyone who dared critiscize Google in anyway telling them that they would be banned from his site if they continued. Then one day last year, his own site was nuked by Google in the same manner--although I take it he was able to eventually have the situation rectified. How he did it, I don't know.

I wrote about my own experience last fall. Someone in the SEO field then accused me incorrectly of whining. No, when you have a site in the top five SERPs which then vanishes overnight, you have a legitimate reason to complain and even pursue legal recourse, as in the case of Kinderstart. I think I know what I'm doing since all of my other sites appear in the first two SERPS on the big three SEs. Whining is when someone complains about never being able to crack the top 100 SERPs.

That's a big difference.

So what's the lesson here?

It's simply this: don't base your online strategy on Google delivering traffic to you. Google shows itself  daily to be a fickle mistress. One day she adores you and the next day it's as if you never existed.

The silver lining:

There's actually a happy ending in all of this--at least for me.  Having the site vanish and my traffic decrease as dramatically as Kinderstarts' "cataclysmic 70 percent fall", forced me to find other ways of driving traffic to the site than tedious SEO techniques. Eventually these other techniques paid off and I now have have traffic that's 1.25x greater than when the site was in Google's first five SERPS. That's not bad considering it's a narrowly defined niche site aimed at startups having trouble raising venture capital or angel investor financing.

In conclusion, as I have stated here many times, having one search engine dominate the search market so heavily is bad for everyone. It's bad for online businesses which can see years of hard work aimed at building traffic evaporate overnight, and it's bad for individual searchers who are delivered increasingly lower quality results Google.

It's also time that people in the online community stopped being afraid of Google and kissing its ass. There's way too much fawning over Google on blogs. The performance of both of its key revenue drivers, Adwords and Adsense, has plummeted dramatically over the past two years. Every passing day Google looks more and more like a house of cards. (Just Google "Google click fraud" if you don't believe me.)

It's time to admit that the emperor has no clothes.

Best of luck to Kinderstart in its suit.

Joe points us to this article--a company is suing Google because their pagerank is too low.

Perhaps the same strategy could be used on consumers who don't want to watch your commercials...

Is Google Turning into the New Enron?

Okay, I admit the subject line is a bit of hyperbole to catch your attention, but think about it. Remember back when word of the problems at Enron was just starting to leak out and everyone assumed it wasn't so bad? Remember how we all believed that Enron would find a buyer to acquire itself? Everyone refused to believe that the company was rotten to the core.

Well, consider the bad news leaking out of Google these days. Rumors of a large portion of Google's revenues stemming from massive click fraud having been running rampant for at least a year now.  Google has denied the click fraud all along--until this week when it offered $90 million to settle a click fraud claim.

I want to empasize here that this $90 million settlement offer is to just one (1) company of many going after Google for not protecting them against click fraud.

It get's worse, folks. It appears that Google is willing to pay any amount that the advertiser claims it lost through click fraud. What happened to the systems Google allegedly has in place to monitor and prevent click fraud? By telling claimants to pick their own numbers, it's as if Google is openly admitting that it has no idea what the extent of the problem is.

Mark Cuban recently estimated that 50% of Google's revenues came from click fraud. He's probably an optimist.

Google's Revenue Taking a Hit

If you want to know how Google is really doing, you first need to start ignoring all the Wall Street analysts and listen to people who run actual web businesses. They will tell you that they are cutting back dramatically on Adwords expenditures because the program's performance is swirling the drain. Hardly anyone is clicking on the ads anymore--with the exception of those engaged in click fraud. On the flip side, these same people running web sites in order to earn a living are starting to switch from Adsense to other publishing programs because Google is now paying out on average about 10% of what it paid per-click 18 months ago.

Only a Wall Street analyst with a serious conflict of interest will still claim that Google is a buy.

The reality is that Google's revenue model is slipping below the waves.

Google Bad News: When it rains it pours

More bad news today for Google. The current issue of Barron's portrays Google as a sinking ship on its cover. People who run online businesses have been aware of Goog's problems for the last two years. The performance of both of its main revenue streams, Adwords and Adsense, has been steadily declining. Hang out on any of the forums for webmasters and you'll see what I mean.

Here are a few excerpts from the article:

Google reminds me very much of what went on in 1999 and 2000," says Fred Hickey, editor of the well-regarded High-Tech Strategist newsletter and a member of the Barron's Roundtable. "The valuation is insane, relative to what they do."

COMPETITION IS GETTING FIERCE. Over the next year, both Yahoo! and Microsoft's MSN portal are expected to improve their search offerings. In the second half of this year, Yahoo! hopes to improve its systems so that search-engine ads are more relevant to search results and therefore more likely to be clicked.

"Google is focused on one area. They're great at it, but the competition is mounting," warns Scott Kessler, an equity analyst at Standard & Poor's. He has a Sell recommendation on the stock and a 390 target.

There's also the threat someone will come along and change the rules of the game. Microsoft Chairman Bill Gates in a presentation in India reportedly discussed the idea of sharing the ad revenue generated by searches on MSN with the people conducting the searches. It's something Amazon.com already has started, by offering regular users of its search site, A9.com, 1.57% off of "virtually" all purchases at Amazon.com.

Google Replaces Iraq in Axis of Evil

It's amazing just how quickly the world has turned against Google.

Three short years ago it was everyone's darling. Today it's seen as the replacement for Iraq in the Axis of Evil. The only believers left are analysts terrified of getting on Goog's bad side and the Late Majority/Laggard segments of the consumer market. For two years now, the people running websites have been watching Goog's two main revenue generators, Adwords and Adsense, swirl the drain performance-wise. Then there are the persistent and growing rumors that a huge portion of revenues result from click-fraud. 

I've noticed that my reliance on Google for searches has diminished substantially over the past year. Whereas 90% of my searches were conducted on Goog a year ago, that figure is down to about 33% today.  There are so many alternatives now for producing better search results that one no longer needs to settle for Goog's which, in most cases, delivers tired, old sites whose only virtue is having accumulated a 1000 incoming links since 1996. Hey Goog, how about ranking sites on actual relevancy instead of placing all the emphasis on how many sites are linking to it?

I am reminded of just how quickly startups rise up into giants and then fizzle out like roman candles since the dawn of the Internet age. Perhaps Google will be one if these companies?

Google Shares to Hit $5000!

Google Shares to Hit $5000!

Google (GOOG:Nasdaq - commentary - research - Cramer's Take) shares at $2,000? That's what Caris & Co. analyst Mark Stahlman says is theoretically possible.

In note issued to clients Thursday, Stahlman stresses that he isn't setting an official price target for the stock of the Mountain View, Calif.-based company. New York-based Caris doesn't set price targets for stocks. Earlier this week, Safa Rashtchy of Piper Jaffray, which evidently does set price targets, predicted that Google's shares would hit $600. So far that's the highest projection of any analyst.  (source)

Why stop at just $2000?

I'll top these two with a prediction of $5000 per share. Why not, if we're going to talk complete nonsense?

Seriously, what are these two smoking? Google as a search engine is becoming less and less relevant by the day.  Talk to businesses that engage in online marketing. There is growing dissatisfaction with both of Google's advertising programs as their performance is swirling the drain. Where do you think most of Google's revenues come from? From these same increasingly dissatisfied business advertisers, that's where.

On the consumer side, more and more surfers are switching to the exploding numbers of alternative methods for conducting searches, which include the new bookmarking services as well as new search engines.

Try these:  www.clusty.com, www.answers.com, www.technorati.com for beginners.

Google used to be my home page because I conducted 90% of my searches on it. It's not my home page anymore, and I rely on it for only about a third of my searches these days.

It's time these analysts caught up to the rest us instead of trailing us by 6 months.