CES 2012 Press Releases

* The number of registrations of .com domain names grew from 23,662,001  in  January 2003 to 80,759,835  in January 2009.

Wiki goes on to note that a quirk in the registration rules led to a surge in the practice of “Domaintasting” where a huge bulk order of domain names would be registered for a short time.   Only the names that created click revenue from pay per click ads would be kept.    This led to new domain hosting companies set up simply to filter for marginally valuable names that could be set up to get click revenue, and then to a new rule in June 2008 from ICANN, the body that oversees domain registrations.  ICANN started to limit the number of domains that a registrar could delete in the ICANN “grace period” where no fees were charged.   These grace period deletions fell by 99.7% the following year as the practice of “domain tasting” became less profitable.

Verisign Domain Brief in June 2009 identified  92 million COM and NET domain names, 24 percent with one page websites, 64% have multipage websites and 12% have no associated websites.

These last numbers suggest to me that the speculation is not as rampant as most seem to think – ie most sites are multiple page implying content and not speculation.    Of course systems like the one I’m testing now at Godaddy that auto-generate several pages of content make it even harder to distinguish between  sites that are driven speculatively vs those that are driven more by a passion to communicate or quality initiatives.       As the quality, sharable content online increases and systems become smarter I think we may see that it will be impossible to distinguish between sites created by humans and those made automatically.

The *most important issue* in my opinion is generally overlooked, and that is the *fact* that what most of us believe to be “our private information” is now scattered across the internet, easily retrievable.   The privacy ship sailed long ago, so by far the major issues left are how to remedy *abuses* of privacy.

I would suggest that the abuses are generally caused by lack of transparency in terms of identities of business entities and that the solution should revolve around market driven sales transparency and legally driven identity transparency.

I personally don’t object to having all online sales activity legally required to disclose the name of the purveyor – either a registered business or an individual so they can be identified by the consumer and by authorities.   However there are probably various reasons – free speach and otherwise – to limit this disclosure to the ISP level.    But a huge mistake in my opinion is that we are not requiring enough responsibility on the side of ISPs, online advertisers, and (very importantly) the big online ad agencies like Google who are not required to disclose spammers to authorities.

This is a complex issue for many reasons, but we’ve erred on the side of letting non-disclosure trump common sense, and this has led to the massive level of online commercial abuse we see now all over the internet.      From legal scamming like overpriced self help books and ringtone sales to illegal phishing attacks, much of the trouble would disappear if Google, ISPs, and authorities simply made sure that  all legal online transactions could be traced to a legally responsible party.     e.g. if you sell online, you must be identifiable as an individual or business, much in the same way we expect any offline business to be accountable to a variety of checks and balances in place in the offline world.   Online efficiency has eliminated many of the normal “barriers to entry” for businesses.    That’s a great thing overall, but it means we need more in place than the current relaxed systems and standards that facilitate too much abuse.

Ironically Google search is probably more vulnerable than ever to the advent of a new, great search engine  thanks to Google’s current tendency to   1.  Elevate old and well SEOd (Search Optimized) websites above newer, better ones   2. Avoid proper policing big players like Ebay / Amazon who often appear high in paid and sometimes even organic rankings despite no/thin content about the query.  3. Maintain unreasonably high per click charges on many terms, effectively favoring the big money / big box  advertisers over small businesses.   4.  Not use enough social media feedback to help rank sites (they use some and I’d guess are slowly integrating this, but nobody has made the breakthrough that will come from clever “crowdsourcing” about websites.        5. THROUGH 10.      LACK OF TRANSPARENCY!       Google remains very opaque when it comes to website rankings, and Yahoo in their infinite lack of cleverness 3 years back missed a golden opportunity to come to the rescue of advertisers, webmasters, and most importantly users by creating a more level field with a lot more information about how rankings work combined with public identification of site owners, webmasters, and spammers/ abusers.    Creating this type of transparency would solve many of the problems that currently plague the search game, most importantly the problems that come from webmasters trying to please Google rather than create new, innovative sites.    Best single example is the fiasco of Google’s insistence on “Nofollow” links, which have seriously distorted the entire search landscape to favor cleverly optimized / costly sites over new mom and pop operations.

You see this often  in the travel space where large, thin sites outrank rich, local sites that are newer and don’t have the link base of the older sites.     With Google as pretty much the only search in town, new links will flow mostly as a function of  the rank of the website, so we have a circular system where the “rich get richer”.     [for the record this aspect of the algorith benefits me in the case of some of my very old websites, so this is not a "sour grapes" rant as much as a critique of the approach].

However I’m not holding my breath on Bing Yahoo taking up much of Google’s market share.    As we’ve noted before Google remains an excellent tool, and it took hold of people’s search consciousness at the time they were developing their online habits, so even a superior search would have trouble hurting Google’s dominance, and to Google’s credit I think they continue to approach things more from a quality side than a revenue one.

From Yahoo:

Assuming our testing continues to yield high quality results, we anticipate that our organic search results will be powered by Bing beginning in the August/September [2010] timeframe.

This appears to be a good sign that they will not compromise organic quality in favor of elevating paid listings, a move that would probably lead to significant loss of their current (low) market share.

From Yahoo:

This on the other hand seems a little more alarming, suggesting that people may want to pony up to maintain their ranks after the Bing transition.      Over the coming weeks there will be a lot of Bing quality testing by other SEO centric websites and we’ll try to summarize that in a later post.      We’ll also be blogging the upcoming SES San Francisco (Formerly SES San Jose) search conference – the most influential search gathering  in the world, and have more on the Bing Yahoo changes.

———–  Full Text of Yahoo’s Note ———-

Dear Advertiser,

As we continue to work closely with Microsoft to implement our search alliance, we wanted to provide you with an update on our progress, as well as call out some important, upcoming milestones to help ensure you are prepared for the changes to come.

Transition with Quality
Our goal remains providing a quality transition experience for advertisers in the U.S. and Canada in 2010, while protecting the holiday season. We’ve continued to make good progress against this goal, and we regularly evaluate our progress. However, please remember that, as we continue to go through our series of checkpoints, if we conclude that it would improve the overall experience, we may choose to defer the transition to 2011.

Organic Search Transition
To date, we’ve focused most of our communications to you on the paid search transition to adCenter. However, another key aspect of the Yahoo! and Microsoft Search Alliance is the transition of Yahoo! organic search results (those found on the main body of the page). Assuming our testing continues to yield high quality results, we anticipate that our organic search results will be powered by Bing beginning in the August/September timeframe.

If organic search results are an important source of referrals to your website, you’ll want to make sure that you’re prepared for this change:

For more specifics on the organic search transition, please refer to the Self-service Advertiser FAQs on the Yahoo! Transition Center.

Organic and Paid Search Testing
To help us deliver on our goal of transition with quality, we are conducting the necessary tests to ensure that all of the many complex, logistical pieces are in place. While there’s nothing you need to do to prepare for testing, please keep in mind the following:

Editorial Guidelines
Yahoo! and Microsoft have created joint editorial guidelines that will begin taking effect for both Yahoo! and Microsoft paid search advertisers in early August. We encourage you to review these now, so that you understand any potential impact to your ads or keywords. Notable changes include new guidelines for gambling and contests, and disallowed content. For a detailed overview of the editorial policy changes that will soon take effect, please read the New Editorial Guidelines article.

We are committed to making this transition as seamless and beneficial for you as possible. We appreciate your business, and look forward to bringing you the benefits of the Yahoo! and Microsoft Search Alliance.

Sincerely,
Your Partners at Yahoo!

Disclaimer:   Joe has Yahoo Stock.   Not that he’s happy about that fact.  Nope, not happy at all.

Clemons argues that both offline and online advertising are failing because people are rejecting  deceptive, unwanted intrusiveness of ads pushed at them during their experiences:

Clemons suggests:

There are three problems with advertising in any form, whether broadcast or online:

• Consumers do not trust advertising. Dan Ariely has demonstrated that messages attributed to a commercial source have much lower credibility and much lower impact on the perception of product quality than the same message attributed to a rating service. Forrester Research has completed studies that show that advertising and company sponsored blogs are the least-trusted source of information on products and services, while recommendations from friends and online reviews from customers are the highest.
• Consumers do not want to view advertising. Think of watching network TV news and remember that the commercials on all the major networks are as closely synchronized as possible.  Why?  If network executives believed we all wanted to see the ads they would be staggered, so that users could channel surf to view the ads; ads are synchronized so that users cannot channel surf to avoid the ads.
• And mostly consumers do not need advertising. My own research suggests that consumers behave as if they get much of their information about product offerings from the internet, through independent professional rating sites like dpreview.com or community content rating services like Ratebeer.com or TripAdvisor

Clemons goes on to suggest that there are ways to make money online, but they will not take the form of advertising.  Clemons suggests that online moneymaking of the future will evolve in these directions:

• Selling content and information, from digital music to news and information.  Some of these sites are funded by subscriptions, like Gartner Research; some are by direct micropayments for purchases, like iTunes; and some currently attempt to fund themselves through advertising, like Business Week or The New York Times, while still searching for a more effective business model.
• Selling experience and participation in a virtual community, including Second Life and World of Warcraft, Facebook and MySpace, Flickr and YouTube, or LinkedIn.  Not all of these have found a way to charge for participation.
• Selling accessories for virtual communities, like completed homes and stores, furnishings, clothing, and pets in Second Life or characters and accessories that would be difficult to earn in World of Warcraft, although this behavior is generally despised by serious World of Warcraft players.

Although I should review his research carefully before critiquing his conclusions this is the online world so we shoot first and study later.    My reaction in short.  This analysis is totally flawed, a product of the huge prejudice and misunderstanding about how and why online keyword advertising (and Google) have been so successful for so many, and that Eric has *really*  got to get online more often!

Counter Point 1)   Online keyword advertising remains a very successful ad paradigm.    Google continues to milk the keyword advertising cow in very effective ways, monetizing a huge proportion of their search queries.   Google holds a near monopoly on this business as they monetize both Google searches at their home page and the searches on other sites via the Adsense program where publishers can plant highly relevant and targeted Google ads on their own sites and share revenues with Google.   The modest level of advertising at this Website (what, you missed it – it’s over to the right in the boxes) comes from the Adsense program.

The success of keyword advertising should come as no surprise as, contrary to what Dr. Lemons suggests, it is not all that instrusive.   For example if you are researching car or camera information – and you’ll almost always go online to do that – you may *want* to see some advertising associated with your information gathering experiences.   Clicking on the ads costs you nothing and may land you on a good deal, and from an advertising perspective this is the time the user is most likely to make a purchase, so it’s generally a win win situation.   Sure there are exceptions that fall into the Caveat Emptor department and also Google must do a better job than now to police “bad actors” among their advertiser pool, but as we’ve noted many times before keyword advertising remains the holy grail of monetizing content and will continue to be that for many years.

Counter Point 2) Dr. Clemons alternatives to keyword advertising are probably too weak to sustain a large internet ecosystem.   “Long tail” product sales, micropayments, and most content sales will have an increasingly important role to play but I doubt they will match online advertising revenues for some time with the possible exception of the gaming and entertainment sectors which are poised to see explosive online growth as broadband access increases and mobile gaming applications and smartphones reach more and more people all over the world.    In contrast to the USA, in China gaming is a larger market than search, and there are a lot more people in China than here in the US.     But this trend is likely to fuel more, not less, online advertising as gaming and entertainment sites compete for attention so it does not support Dr. Lemons’ arguments about the death of internet advertising which, paraphrasing Mark Twain, have been greatly exaggerated.