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Posts Tagged ‘seo’

No. Not really.

This is the main reason most new search engines fail.  This is also why refreshes to existing search engines with radical features don’t work particularly well either.

It’s really a misconception that search engines could be made better.  Common discussion suggests one day the search engines will magically find what we need if only someone will write the perfect semantic algorithms or rank pages better.  Other common attempts to improve search include improving the search interface via cleaner design, more links, less links, categorization and so on.  It is all a big fat waste of time.

The web is messy.  It’s mostly unstructured.  Structure is buried in noise and the noise grows very fast. With this ever growing mess,  the search engines do exactly what we all want them to do.  They help users source possibilities.   They take this mass of web pages, databases and media and make it navigable.   The idea of one engine to rule them all is a bit unrealistic, and probably intractable.  Just do a little thought experiment – can you imagine data that is not effectively accessed and navigable via a little search box? I can – Maps.  So we have Google Earth, Maps and other ways of moving through that data.  Images.  Images are better navigated visually (for a variety of reasons, not least of which is characterizing an image in words…)  There are many other examples.

Another way to think of it… search is just a first layer of discovery.  Yes, of course, we can go deeper than a first effort in some search activities, but generally speaking it can only give you a rough cut.  Where is boundary on that?  No one knows and it changes all the time, but it generally is a thin layer compared to the depth one needs to go to really dig into a data set or subject matter.  This limit arises from the noise on the web, the loose structure of hyperlinks, folksomonies and presentation layers.  The limit is also a result of the difficulty in forming short statements that fit in a search box that properly characterize what one is looking for and filter what one doesn’t want to see.

Again, these are not problems.  Search is what it is and it works.  Just as tables of contents, indices, bibliographies, reference librarians, bookmarks, dog ears, post it notes all do what they should and do it well.  We’re never going to need or want fewer ways to navigate and take notes.  The variety is where efficiency lies.

So if you’re waiting around for a Google killer in web search.  Move on.  It ain’t going to happen.  There’s no big enough reason that it would.  What would that mean anyway? [many great search engines exist that are at least as capable as Google…]

Sure you might have someone that competes with Google for ad dollars, but no one is going to compete with in indexing the web and doing your first layer search. There is definitely roomo innovate  and compete with Google in delivering highly targeted, high performance advertising.  There is definitely a way to compete for audience as Twitter, Facebook, MySpace and others demonstrate.

Finally, the cost of indexing and mining the web will never get cheaper.  Even though the hardware and bandwidth prices go down the algorithmic methods, spam fighting, and the raw “keeping up with the web” continue to grow.  Perhaps the most important point here is that advertising budgets have nothing to do with these costs.  That is, improvements in the technology, at this point, don’t necessarily equate to a growth in advertising revenue.  This is one reason why it’s probably not feasible to compete in web search and, my hypothesis is, that growing search ad revenue enough to keep up with the costs is going to be almost impossible.  Add to this the idea that there are no more users for search engines to entice into using them.  Everyone that uses search is using Google or the others.  The search companies have to go outside of web search to gain audience.   At some point the existing model for search and search advertising is going to flatten (it might already be doing that).  This further destroys any motivation to innovate in pure web search.

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Failure to understand how users and money flow through the Internet costs media and etailers a lot of money every day.  There are huge misconceptions about where the “value” actually lives for user data, advertising performance and profit margins on all this high tech.

The following figures attempt to disambiguate some of the confusion.  The summarized conclusions come from a variety of data sources and real life experiences analyzing financial statements, traffic reports, advertiser analysis and experimentation.  Specifically one could get someone exact figures by combining comScore, Quantcast, Compete, Google Analytics, TNS, @Plan, SEC Filings, internal reports, revenue statements and DART forecasting as I have done several times.

This post is meant to be a demonstration of the core concepts, not a statistical treatise on the topic.

If you hate reading too much, skip to the end for a somewhat realistic example of how traffic flows.

Traffic on the Internet roughly splits 7 segments.  (as shown in the figures below).  These segments are defined by where the sit in the user experience by amount of consumptive behavior (clicks, reading, sharing, watching). How the user gets from segment to segment is not completely linear in actuality, but when you coagulate a users behavior you’ll roughly see a funnel in terms of time spent, pageviews and ad impressions.

Traffic Funnel

Traffic Funnel

The segments can be characterized also by their ad performance, ad targeting (how specific is the user in their activity), and their audience coverage (how much of the particular audience segment does a type of site/service reach)

Funnel Traffic Segments

Funnel Traffic Segments

Each segment has a different cost profile.  Here I look at labor costs to maintain and capital expenses to build and power.

Where's the Cost?

Where's the Cost?

As you can guess, each traffic segment has a different profit profile too.  This is largely the result of combining the advertising/revenue performance with the cost profile.  Certain Internet services simply do not have a strong profit opportunity because they borrow old models and/or cost more than the market is willing to pay. (Perhaps that will stabilize one day, but I think software tools and low cost hardware disrupt the demand curve A LOT because users can often supply their own demands once the cost gets too high, hence why TOOLS are the most profitable segment.)

Profit Margins by Segment

Profit Margins by Segment

Make no mistake about what I’m presenting here.  The profit online is all in retailing, portals/search and tools/utilities.  The stuff in the middle of the funnel is highly susceptible to competitive displacement and has very little intellectual property protection.  You can verify this conclusion by reviewing revenue statements and SEC filings for the big tech and internet companies.

The advent of citizen journalism and self publishing flattened the media market.  Owning a printing press was once “high tech” and a capital investment barrier.  Owning the right location on the main street was once a logistical barrier.  High speed computers and difficult programming languages was once a technical barrier.  Those 3 feature are gone.  Media is now, well, almost purely a creative barrier.  There’s a huge pool of creative talent constantly struggling against each other.  Creativity is worth a lot once it rises above everything else.  That happens so rarely to make it a bad investment.  Every minute more and more people enter the creative market (how many blog posts per hour? how many videos go up each day?… a lot.)

organizing, sifting, filtering, distributing, aggregating… that’s the sweet spot.  There is a technical hurdle, but the investment is worth it as there will never be less of a need to filter, sift, find, distribute.

This week we had a beautiful illustration of these concepts with the Presdential Inauguration.

Most of the US users watched the Inauguration, most on TV, a lot with online video streams and 2 million in person.  During and Immediately following the inauguration the Internet lit up with content creation and massive usage.  The portals and search engines featured as many new links and breaking stories to the news coverage.

The social networks shot pictures, tweets and status updates around, occassionally referencing links to the confirmation gaff, benediction speech text, and satelite pictures from DC.

Micro bloggers summarized everything as fast as they could, while the search engines and utilities sucked in that content.  The original content creators probably released a previously composed story and put that live.

Mainstream users shut down their video streams and took to the portals and search engine, seeking more info on what just happened or insight into a specific moment.  Most times they ended up at CNN or NYTimes.  Many times, but less frequently, they hit a blog that had some recent content.  Most users probably ran into a wikipedia reference link or youtube video.

Some users ended up on amazon to buy Obama’s books or some inauguration swag.  Finally as the day concluded and original content creators finally had enough time to craft something, users might find themselves falling asleep to a good OpEd on the history of the day or an interview with the Michelle Obama dress designers.

By 3 days later the amount of content available on the inauguration is 1000x greater than within the first 10 minutes.  Original content creators are hopelessly buried amongst the blog posts, tweets, continuosly AP feed CNN articles and YouTube embeds.  The bloggers are buried by other bloggers.  The news stories give way to other news stories.

The utilities that sort, sift, filter and monetize on it all just got a 1000x better experience and continue to catch the huge volume of user investigation and digging.  The own the head, the trunk and that dreaded long tail and collect user targeting data all along the way.

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Talk about language.  For the longest time I had a post up about ICanHasCheezburger.com.  It gets more steady traffic than most of my other posts.  After quick research, it’s because this blog is listed 4th on google for “I can haz cheezburger.”  This was quite hilarious to me.

Funny thing is… and, I mean, really funny if you’re into this sort of Interwebs thing, I actually misspelled it!  It’s “I can HAS cheezburger.”

Why is this funny?

Because the whole damn gimmick for LOLCATS is internet speak and misspellings.  Where this fits into grand scheme of language and humor, beats me!  misspelling a misspelling is pretty hilarious.  Especially when you consider this misspelling and interwebs language twist/inside joke gets over 12,000,000 visitors a month still.

Yes, as I said in an earlier post today, it’s Monday!

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