July 2008

Yahoo, Intel and Hewlett Packard announced an alliance to advance “cloud computing,” backing a global trend that threatens Microsoft’s iron-fisted grip on packaged software installed on computers.

Earlier this year Google and IBM teamed up to advance research into providing SAAS (software as a service) on the Internet hosted by data centers.

Cloud computing isn’t as futuristic as it sounds. Web-based email (Gmail, Yahoo Mail, Hotmail) offered by Google, Yahoo, Microsoft is an example of cloud computing. Google has expanded its online software offerings to include word documents, spread sheets and more under the Google Docs brand.

The cloud computing initiative falls in line with Yahoo’s goal of open systems. Results of research done at the centers will be made public to make it easier for software developers to write applications for cloud computing.

“We believe this collaboration will do a great deal to take the research to the next level,” Yahoo Research chief Prabhakar Raghavan said during the conference call.

“We are really fueling the ecosystem here… Inevitably an application developer will build more readily for the cloud.”

Google created a firestorm in the industry with its Paid Links directive. So where does Yahoo stand in the Paid Links debate? In today’s Web analytics and ROI column, “Google vs. Yahoo on Paid Links,” Eric Enge looks at Yahoo’s stance on buying links for SEO value.

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Cuil may be a good search engine…someday. But launching it as a “Google-killer” was a mistake. In today’s Searching for Meaning column, “What’s Wrong With Being Cuil?,” Kevin Ryan outlines two lessons to learn from this: First, make sure it works before you launch it. Second, make sure you can live up to your claims or you’ll suffer the consequences.

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IAC, the parent company of top-5 search engine Ask.com, has posted a 7% year-over-year growth in revenue for the second quarter of 2008.

IAC is preparing for a transition, spinning off various assets into different companies.

“We are now right around the corner from the separation of IAC into five separate companies and the dissolution of the complexity surrounding the combined structure,” said IAC’s Chairman and CEO, Barry Diller. “Besides the detailed numbers contained throughout this release, focusing on consolidated results is only about the past, and I would think it far more productive for the future to analyze and judge the entities on their own merits … as a large shareholder in each that is certainly what I intend to do.”

Earlier this year, Ask.com changed up their management and cut 8% of their workforce. IAC also announced a bunch of new niche sites that serve up a mix of search and social media.

Some skeptics have publicly predicted the death of Ask.com. With IAC planning to spin off its properties into four units, that’s a bold prediction indeed.

For the divisions that will become the new IAC, including Internet services such as Ask.com and Match.com, revenue rose 11% as earnings improved 3%.

The Ask-Google partnership is already paying dividends. More people are using Ask more often.

Here’s how the IAC Search business breaks out:

Media & Advertising consists of proprietary properties such as Ask.com, Fun Web Products, Citysearch and Evite and network properties which include distributed search, sponsored listings, and toolbars.

Proprietary revenue grew strongly during the quarter and now represents 75% of total Media & Advertising revenue.

Media & Advertising revenue growth was driven by improved economics associated with the renewed partnership with Google, which resulted in an increase in revenue per query across all proprietary search sites.

Revenue per query at Ask.com grew, even excluding the benefits of the renewed contract.

Ask.com continued to grow its core user base which searches most frequently, while queries declined overall due largely to significantly reduced marketing.

Media & Advertising profit benefited from lower marketing spend at Ask.com and higher margin traffic resulting from the ongoing shift in query mix towards proprietary and away from the partner network.

Local directories made 9% of their gross revenues online in 2007, while other local media such as newspapers and TV only made 5% online. Douglas Quenqua, over at ClickZ, has the full write up from the data released by Borrell Associates.

While search has threatened the industry, selling ads on the cheap has kept yellow pages companies competitive. And they aren’t resisting the digital change.

Gordon Borrell, CEO of Borrell Associates, said, “We don’t think yellow pages will disappear,” said Borrell. “Eighty to 85 percent of people still use them at least once a year. They’re eroding, but they won’t completely collapse. They will just transform.”

What do you think about the future of local directories? Read Quenqua’s full article over at ClickZ and then come on back and leave a comment.

Marchex is integrating online and offline lead generation methods in its launch of Marchex Connect 2.0. The local advertising platform offers three products: online advertising, call-based advertising, and Business Profile Pages

With today’s launch, Marchex subsidiaries VoiceStar and Traffic Leader have been unified under the Marchex Digital Platform Group to leverage the Marchex Connect platform and provide integrated, locally-focused advertising services including:

• Full Advertising Campaign Management – All campaigns are managed by a dedicated team of online marketing and call-based advertising experts.
• Strategic Consulting for Resellers – Leveraging Marchex’s unique intellectual property regarding pricing and product strategies to appropriately balance and expand the total offline and online spends of an advertiser, and to maximize ROI goals.
• Sales Channel Training – Custom in-field and Web-based training programs to equip Marchex partners’ local sales forces with the knowledge and sales materials they need to successfully migrate their local advertisers’ spend online.

“We have invested heavily to build a performance-based, local-centric advertising platform for local resellers and advertisers that integrates online and call-based advertising products and services at scale, all supported by sophisticated reporting and analytics,” said John Keister, Marchex President and COO. “Our goal at Marchex is to accelerate the adoption of local online advertising and to deliver the highest volume of quality local leads to our advertisers at the most reasonable cost in the marketplace.”

Related Reading:
Marchex Shows How to Cash In on Local Search
Marchex Consolidates Ad Platforms
Marchex’s Local Advertising Branches Out into Mobile Market
Marchex Develops Partnerships with Several Local Content Providers

Google is facing another YouTube law suit, this time from Italian broadcaster Mediaset, which is controlled by Prime Minister Silvio Berlusconi. The suit was filed in Rome and seeks 500 million Euros in damages (approx $779 million USD).

The suit is similar to others, including the one brought by Viacom, citing illegal use of copyrighted materials.

Mediaset says a June 10 analysis showed 4,643 videos equaling more than 325 hours were found on the popular online video site. The broadcaster claims the videos amount to a loss of 315,672 days.

Related Reading:
Google Fights Back in Viacom/YouTube Copyright Suit
Others Join YouTube, Google Copyright Lawsuit
Viacom Would Rather Not Sue, Chief Counsel Claims

I try to teach my mom SEO stuff from time to time, and often do so through the use of analogies. Some analogies perhaps oversimplify the SEO process, but are good for helping get the basic concepts across.

On Page Content

• fish and a fishing pole – when explaining how text heavy sites often outrank thin ecommerce sites, I like to call searchers fish and each word on the page an additional fishing pole in the water. This is really powerful when used in combination with analytics data, showing her the hundreds of phrases that people searched for to find a given page on her site…helping her see the long tail as schools of fish.
• Don’t Make Me Think – people scan more than they read. Large blocks of text are imposing. People are more likely to read well formatted content that uses many headings, subheadings, and inline links. Expect people to ignore your global navigation, and do whatever you ask them to do (via inline links).

Site Structure

• Broadway Street in Manhattan – used to describe the value of descriptive .com domain names, and when describing what top search engine rankings are worth.
• a pyramid – when explaining how some phrases are more competitive than others, and how to structure a site.
• chapters of a book – used to describe the importance of focused page titles, and how to structure a website.

Link Reputation

• search engines follow people – helps explain why new sites tend to not rank well, and how links are seen as votes.
• roads and highways – used to describe PageRank and why some votes count more than others.
• multiple audiences – used to describe why many types of content are needed to address different audiences, and the importance of creating content that is loved by buyers, linkers, and search engines.
• rising tide lifts all boats – used to describe how links to one part of your website help other pages on your website rank better
• pet rocks & overpriced dolls – describing how perception becomes reality when describing cumulative advantage, and how some poor quality sites are popular while better content remains hidden

Pay Per Click

• instant market feedback – describing how it can be cheaper to test and learn than it is to theorize
• taxing irrelevancy – explaining how irrelevant ads are priced out of the marketplace.
• users vote with clicks – if your ad does not get clicked on it costs way more or is not shown

Tracking Results

• flying blind without autopilot – when explaining the importance of analytics, and how most businesses that do not track results stand a good chance of failing.
• people are lazy – describing the power of defaults and how a #1 ranking gets way more traffic than a number 5 or number 10 ranking.

Google Relevancy

• Trust is Important – cares deeply for user experience, unless they are paid enough to think otherwise.
• The House Advantage – when explaining why YouTube and Knol pages rank better than they deserve to.
• Link Authority is Important – explaining why garbage general made for AdSense sites like eHow clog up the search results when higher quality information is hidden.
• Informational Bias – when explaining that Google’s business model relies on people clicking paid ads for commercial sites, and why Wikipedia ranks for everything.

How do you describe SEO to people who are not deep into the field?

Update: A few months ago Jaan Kanellis posted many analogies.

The rising cost of gasoline has become a problem for many people who drive to work every day, or even drive in general, for that matter. Everyone talks about doing something about it, but is it actually having an effect on people? In order to find out, the top fifty public transportation website domains were taken from the “Bus and Train” category, sites such as amtrak.com, greyhound.com, and the ever-popular fungwahbus.com, where you can book a Chinatown bus from Boston to New York for only fifteen dollars. The number of weekly unique visitors (UVs) to these sites were found for the first 27 full weeks of 2008, from January 6th to July 12th, and compared to the average gas price in the United States for each week.

Several portions of the data seemed very interesting:

• At first glance, one might think it was odd that the UV count actually decreased through January, but upon getting a closer look, it turns out that gas prices fell slightly that month, as well, dipping back under $3.00 and in turn inspiring more people to drive.
• One of the more notable occurrences is the huge UV spike in Week 6. Week 6 covers February 10-16, so with Valentine’s Day being the 14th and President’s Day being the following Monday, February 18th, its obvious why so many people were looking to take a bus or train that weekend. Not to mention that gas had just jumped back over the $3.00 mark.
• Throughout April and May the relation seems very close, until gas passes $4.00 per gallon in Week 23, causing a small jump in public transportation UV count.

The most compelling sign of the correlation between gas prices and use of public transportation would be the aptly-named “correlation coefficient,” which indicates the strength of a linear relationship between two variables, falling somewhere between 1 and -1. For example, a correlation coefficient of 1.00 would mean that the two sets of data were exactly the same, and a correlation coefficient of –1.00 would mean that the data sets are exactly opposite. When comparing these particular two sets of data, the correlation coefficient between them was found to be an astonishing 0.9725! So there is a direct correlation; people are responding and actively doing something about gas prices. It makes you wonder why, in places like Rhode Island, they are talking about cutting the daily number of buses running because they aren’t fuel-efficient and gas is too pricy. With demand for buses up, cutting them would just put more drivers on the road and waste even more gas.

You have to wonder though; will people continue to react so directly to the increase in gas prices? It is interesting to note that in the first two weeks of July, the UV count begins to drop. Could this be because people have become used to paying over $4.00 for a gallon of gas and are starting to accept it? In my experience, this is unfortunately true.