Google making people unhappy - again?

It seems the recent ripples in Google Page rank results have left a lot of folk very unhappy - as well as some folk delighted! Some big sites apparently lost a lot of page rank as Google updated PR results recently. An article over at Johnchow.com even suggested that the whole idea of PR was past its sell by date.

Of course people who have gained in the recent PR shuffle weren't complaining. The process seems to have produced some odd results though because there are reports of very new blogs suddenly seeing their PR shoot up from 0 to 5 or 6. Quite a result!

It's every debatable just how important PR is these days anyway. It certainly plays a role in your search position results but its not the only factor. Its still more important to be right on the button with your content and its keywords. You may be of lower PR than another site but if your post or article is well targeted on an issue that someone is searching for you should still return higher than a higher PR site who's post or page is less well targeted. So, ultimately it should, and I say should advisedly, be about content. Some folk may be predicting the end of PR but the old saying that "content is King" remains as true as ever.

Is Google keeping banned account money?

A post by Tom Foremski got me thinking recently about how Google is operating its AdSense program. I believe that the figures that he analyses may explain not only why some publishers have seen a drop in adsense income but also explain what is happening to money withheld from AdSense publishers who fail to reach the $100 payout mark before being banned.

Google shares rose recently and Foremski did an analysis of the third quarter 2007 results.

He examines in some detail Googles traffic acquisition costs (TAC) and claims to have noticed something very interesting. TAC is mainly the money paid to Google’s publishing partners - the web sites using AdSense. In the third quarter they received $1.116 billion or 29 % of total revenues.

Google does not reveal what share of Advertising revenue its publishers receive but according to Foremski

With large sites such as the New York Times, there is a set agreement on revenue sharing. Google will even pay 100 per cent of the AdSense revenue to some large sites–usually done for strategic business reasons.

Smaller AdSense publishers of course get a lot less - Foremski reckons it may be as little as 40 per cent.

According to Foremski from the total aggregate payment to AdSense publishers each quarter the overall split can be worked out–He estimates that this has been usually around 80 per cent with Google keeping 20 per cent.

What Foremski has spotted is that Google is sharing less of its advertising revenue with its publishers. He shows that for the third quarter 2007 numbers

" I noticed that payments to AdSense publishers had dropped by $24m compared with second quarter 2007.....
In the second quarter Google paid out 78.62% of AdSense revenues to publishing partners or $1.063 billion.
In the third quarter Google paid out 76.70% of AdSense revenues to publishing partners or $1.116 billion. "

Foremski points out that the difference is about $24m. The suspicion is that Google has changed the ratio of payouts to AdSense publishers in order to boost it's earnings.

A change to the ratio of payouts is of course one area where Google could make changes on the fly as a means of boosting earnings. Each individual publisher would notice some drop in earnings but it might not be substantial enough for publishers on mass to realise what is going on.

Another possibility strikes me which may be operating here as well. Google periodically has purges of MFA sites and also seems very ready with relatively new publishers to find some reason not to pay them out as they meet the $100 payout mark.

Could it be that in these circumstances Google is not refunding the accrued money in full to AdWords users? This of course would be another way for Google to increase it's earnings - and again it would be difficult to detect.

Whether Google is operating one or both of these strategies their business practice is certainly less than transparent. They need to think carefully about the way they are operating because they risk losing the loyalty of publishers if this is what they are doing.

Google minimum Adsense payout.

One of the reasons that AdSense is such a cash cow for Google is that its terms of service mean that as a Google AdSense publisher you will not receive a payment from them until your account has accrued $100. Now for many small scale publishers it can take a long time to reach this amount. In fact for the less serious blogger of website publisher it might seem like a lifetime!

Google holds back these amounts less than £100 until the publisher reaches this amount and then makes payment. Until payment is made this money is held in Google's own accounts and it shows on Google's balance sheet as "accrued revenue share". At the end of 2006 the amount held back by Google in this way amounted to over $370million. Google of course earns interest on this amount. Many will feel that this money actually belongs to Google's publisher customers and that Google is profiting at their expense.

There are Ad programs that sell themselves on the basis of not having a minimum payout like this and this may often be a selling point in their favour. ( check out a list of Adsense alternatives. For Google it may seem that, apart from the welcome extra revenue for them, there are also genuine reasons for holding payment in this way. They might argue for example that this puts a delay in the system which makes the detection of click fraud more likely.

Google may be shortsighted in this. If they reduced the minimum amount they would be likely to further stimulate interest in their program. Google clearly feel they do not need to stimulate their AdSense program further in this way. Maybe the $370million bird in the hand is better than the bird in the bush.

Google Adwords redirect exploit

In a worrying development for Google Tuesday , Roger Thompson CTO of Exploit Prevention Labs in a blog post reported exploits of the Google Adwords system.

Exploits such as these unless prevented threaten the whole structure of Adsense and Adwords.

Exploiting the Google presentation of Ads
When Google serves sponsored sites ads the URL that the user sees in the advert is not the URL that the user is directed to when they click the Ad. This is the normal functioning of the Adwords system. It allows Advertisers to show their main URL on their advert but to direct users to a specific page when the user clicks the Ad.

Normally when you roll your mouse over a URL you will see the URL address that you are about to click through to. For sponsored Ad results however this URL is not shown.

Better Business Bureau and Cars.com exploit
Users encountering the exploit would find that clicking on the exploit Ads for the Better Business Bureau or cars.com will take them to a real site - but - in passing they are first taken to a malicious site www dot smarttrack dot org which tries to install a backdoor keylogger which would give access to information about the users online banking transactions for certain online banks. This redirect via the malicious site will not be apparent to the user before they click the Ad because Google Adwords URL's are not shown as explained above.

This must be a worrying development for Google because any loss of customer confidence in the safety of Ad links could potentially send click through rates crashing and cause major problems for not only for Google but also for many webmasters who have income streams from Adsense and who rely on Adwords click throughs for site visitors.

It is vital that Google deals with this exploit threat robustly both for their sakes and for the sake of those who depend on Click through from the Adsense/Adwords advertising model

Microsoft takes on Google

Well Google clearly has Microsoft rattled. Microsoft which at one time appeared to be rolling over everyone else and to have the Internet at its feet has fired a salvo at Google with the release of a statement raising concerns about Google's acquisition of DoubleClick. The statement read;

"This proposed acquisition raises serious competition and privacy concerns in that it gives the Google-DoubleClick combination unprecedented control in the delivery of online advertising, and access to a huge amount of consumer information by tracking what customers do online. We think this merger deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market."

The suggestion that anti-trust regulators have a look at Google is of course a bit rich coming from Microsoft which has been the subject of so much scrutiny for its business practices. It would seem that the Microsoft cash cow is not happy that someone else is grazing its fields.


Microsoft of course had problems with the U.S. Justice Department which accused it of monopolization. It has also had long running antitrust disputes with European regulators. Microsoft would of course not be doing this just to give Google a headache and spoil the party. Perish the thought.

Microsoft was itself an unsuccessful pursuer of DoubleClick. So no sour grapes there then.

Its unlikely that Microsoft can make much of a case against Google if we take a cool look at facts. Google and DoubleClick were never direct competitors so how can it be argued that their combination will harm competition?

Google's forte is online search and contextual advertising while DoubleClick specializes more web display advertising especially video. DoubleClick arguably supplies more sophisticated advertising.

According to Microsoft's general counsel a combined Google and DoubleClick would handle over 80% of the ads online. even if that is true the online advertising business is still only a fraction of worldwide advertising activity.

They may get Google one day but it doesn't look like this will be it. So for now the Google Cash Cow grows fatter still.

And Microsoft - it makes you wonder - are they beginning to lose their way? Just what are they going to do with all that money?

Google and AOL

An agreement betwwen Google and Aol will mean that companies will be able to use Google's Adwords system to purchase ads targeted exclusively to AOL sites. This agreement should benefit both companies involved and also advertisers who will be able to deliver more tragetted advertising.

On MondayAOL began selling search ads thus extending its arrangement with Google to allow AOL’s advertisers to buy ads directly on AOL’s Google-powered search engine.

Matt Van Wagner, president of FindMeFaster, a privately held, self-funded search engine optimization agency in Nashua, New Hampshire, argues that AOL’s consumers behave differently than general Google users and that this could mean a big difference in the way they react to ads. This may provide opportunities for additional niche marketing which have not so far been open to Adwords users.

Google aplogy to Chinese firm.

The inexorable march of Google continues, mostly to the benefit of web users and particluarly in the form of Adsense which of course allows web publishers to make earnings from contextual advertising along with their content.

Google is not of course a prefect beast and the mighty Google itself occasinally comes unstuck and is accused of unfair practices. Business in China Reports that Google has had to apologise to chinese internet firm after it was accussed of using that firms information in a new tool Google had developed to improve the input of chinese written characters. Google appears to have backed down and apologised straight away.