Google's Algorithm Updates and the Impact on Search Economy

1. Chapter 7 The Search Economy

2. Google’s Algorithm Updates • Google periodically updates its search algorithms, resulting in different websites returning different results. • An update in 2003 targeted the SEO (Search Engine Optimization) industry • Google was trying to penalize websites that they viewed as spam, people gaming their sites so they are ranked higher and appear towards the top of the index. • Many honest small companies that thrived on Google were caught in the crossfire

3. Neil Moncreif • Used his website 2bigfeet.com to sell shoes size 13+ • Initially did not use advertisements to promote his website because it was in the top ten results for the query “big feet” • The majority of the traffic the website received was from Google searches. • After Google tweaked its algorithms in 2003, Neil’s website was not even in the top 100 results for “big feet” and Neil suffered financially.

4. The SEO World • As Overture and Google became a new business model for marketers, entrepreneurs saw an opportunity to make money • Some of the practices used legal strategies, many did not, and these became known as black hats • Google webmasters developed guidelines to help honest SEO’s redesign their website they could be accurately crawled, ranked, and indexed. • Webmasters and business owners that followed legal practices became known as white hats.

5. Affiliate Sites • Redirect potential customers to larger sites that have programs that pay for leads. • When a customer from an affiliate makes a transaction (buys something) on the target site, the affiliate gets a small cut. • Target sites may be using black hat affiliates. Carnival glass example

6. Grey Area • Google has to decide which what the searcher wants when typing in certain queries • “Digital camera” example • As a result, many companies are forced to buy AdWords • People question if Florida was just an attempt for Google to make money through AdWords

7. Paid Search • Paid search shifted the marketing model from one based on content attachment (ads such as those in a magazine) to one based on intent attachment (ads you intend to click on or view) • Believed that these two will merge in the future. • DVR and search engine example

8. They’re All Search Businesses • Search has changed more the just advertising. For example, take a look at the music business. Napster is basically search engine for music • Search engines have also had an effect on the news business. Google News is one of the largest news sites on the Internet. • Newspapers that require a paid subscription have fallen off the reading list for many people. Because of this paid subscription these news companies’ websites do not receive many links, so they are not at the top of search results. • Battelle’s Solution

9. Local Search • The yellow pages is slowly being replaced by search technology • Internet on phones is on the rise • Local is almost entirely search driven. Craigslist is one of the top twenty Web sites measured by traffic, and it offers classified advertising by local markets. It is free to advertise on the site. • Search is also “ruining” the real-estate business • Crucial information such as title reports and financial metrics can be found on the internet via search engines

10. Trademark Law • American Blinds and Wallpaper Factory trademark was not covered by AdWords • Google attempted to make its AdWords policies legal • Faced many lawsuits • Google claims they disregard trademark laws with their AdWords to “better search results”

11. Google vs. American Blinds Case • Lawyer types in “American Blinds” on Google and all that shows up is their paid advertisement • Results different in different parts of the country • Had Google intentionally fiddled with the results?