As highlighted in recent posts from SearchEngineLand and SERoundTable, the distinction between natural and paid results on Google has gotten a little less clear recently as sponsored listings have started to appear on Google.com’s local business results.

Screenshot © Rustybrick

In a statement to SearchEngineLand, Google confirmed that although the listings were enhanced, they did not affect the ranking of listings (as frequently happens on some other search engines, such as China’s Baidu.com).

There has certainly been a lot of debate on whether the “enhancements” of unpaid listings make them fully-fledged adverts or not, and we would tend to come down on the side saying ‘yes’. Although the listings would be present regardless, the enhancement give them a lot more “eyeball appeal” and divert attention away from the standard listings.

Google’s policy of increasing its monetisation potential wherever it sees the opportunity seems likely to produce lots more cases of paid listings popping up in expected places.

Aside from catching the user’s attention the “enhancements” seem to serve no purpose other than making Google money - you can already click through to the relevant website using the standard listing. This is a pretty fundamental difference to the normal sponsored listings, where a potentially relevant link is being shown where otherwise it might not have been found.

Google has always claimed that improving user experience is its guiding mantra; historically this has meant decluttering and simplifying pages to make them easier to decypher (to the extent where the number of words on the homepage is strictly limited). Can they use the same argument for these changes? If their statement is anything to go by, it seems they can:

“This experiment is intended to help us understand whether this is a useful experience for our users. This feature is currently in a limited trial, and as with all tests, we may make changes to our current experiment in the future.”

How a yellow box and a duplicate link on the listing for a website, assigned purely on the basis that they have paid for it, could potentially be useful for searchers is anyone’s guess.

Comments made previously by Hillary Clinton, the U.S. Secretary of State, had pulled no punches. She alleged that governments use Internet and communications technologies to “repress people, naturally with China inferred in this comment. As a result of Google threatening to pull out of China in the previous week claiming that sophisticated hacking attacks targeting Google mail accounts had originated in the People’s Republic of China, Clinton stated further that “Chinese authorities need to provide an explanation for the cyberattacks originating on Chinese soil that led Google to this decision”. As she criticized states such as China for continued censorship of internet content, the article in the People’s Daily is seen to be a direct rebuttal of these remarks.

The Chinese article maintained that “In the eyes of American politicians, only when information is controlled by the U.S. does it count as free information.” The piece attacked the U.S. and its recent call for internet freedom as a double standard. The article posed the question as to whether a Chinese company operating in the U.S. not comply with U.S. law, intimating that a “no limits” internet was not the best way and certainly does not comply with Chinese law. As Google have recently indicated that they may likely require a stop to censorship of their results by the Chinese authorities if they are to remain within the country, the People’s Daily article seems to indicate that this would not comply with China’s laws, and as such, the demands are an imposition and would not be tolerated the other way around if this were the U.S..

The Xinhua news agency, a Chinese state-run news department quoted and unnamed Chinese official as saying these “hacker” attack claims by Google were “entirely baseless”. It reported further that no details have been provided by Google to these Chinese authorities regarding the alleged hacking incidents.

Although concerns of state-sponsored hacking do cause concern, nevertheless the comments made regarding “complying” within the law of a country seem totally reasonable. A Chinese company in the U.S. flouting U.S. law would not be tolerated, so why should the reverse be acceptable in China. Google’s threats of pulling out of China has made big news, but why would the Chinese government or its people care? Despite Google’s dominance in many counties, it still plays second fiddle to China’s own Baidu search engine. In China search engine marketing terms, there are a host of other engines such as Sina, Sohu and Yahoo-China ready to pick up the pieces.

So whilst we in the West may have a love affair with Google, the impact of them pulling out of China is more likely to affect their own future more than anything else. With the Chinese online economy growing as it is, is this a decision Google are likely to take? It would be a brave one. Google results shows how the one thing that originally made them great, search relevance, is becoming poorer with more effort being pushed to revenue generation through sponsorship and advertising. It is to be doubted Google would turn their back on the Chinese opportunity in their current phase.

The news stories of Google’s latest product launches saw the share prices of leading companies in these sectors tumble; SatNav firm TomTom lost a third of its market value overnight, while property website RightMove suffered an initial 13% slide in value.

The message from the financial markets seems to be clear - if Google move on to your patch using their “free” services model, you’re as good as dead.

OK, Google is a massively successful company - in the space of a decade they’ve grown from nothing to become arguably the most powerful online business in the world - but should their competitors really just roll over and give up?

Of course not.

Google do enjoy great success, but they are not the great innovators or invincible combatants they are commonly believed to be.  To illustrate the point, take a look at how some of their ventures outside natural web search have fared:

The Great Successes…

Now a key part of its service offering, providing people with other people’s news stories was a great idea, although the content creators do seem to be cottoning on to the fact that they’re getting the thin end of the wedge.

Perhaps not a revolution, but it certainly did a lot of evolve an email market dominated by the stagnating Hotmail and Yahoo! Mail services. One of the most popular email services around.

Advertising and pay-per-click is how Google managed to make money out of its search dominance.  Not originally developed by Google; they acquired Applied Semantics ($102 million) and later DoubleClick ($3.1 billion).

Google Maps / Earth are popular free services. Free for the end user that is, not Google, who bought the technology in a number of acquisitions, notably Keyhole Inc.

If knowledge is power, then with Google Analytics residing on 40% of the 10,000 most popular websites in the world, Google’s power is unrivalled.  Analytics was the result of another acquisition; Urchin Software. Development of the service has been aided by the subsequent purchase of Measure Map and Trendalyzer.

Maybe, Just about…

Google’s revolutionary browser hasn’t made a huge impact on Internet Explorer or Firefox, but it’s doing OK.  Much touted “sandbox” tab functionality originates from the acquisition of security firm GreenBorder.

The answer to big rivals’ Micrsoft’s Office suite; very little impact, borderline failure. Component parts (word processor, spreadsheet, presentation software) bought in purchases of Upstartle. 2Web Technologies and Tonic Systems.

Android is an open source mobile operating system, primarily competing against Apple’s iPhone platform; not yet widespread but growing steadily. Acquired with Google’s purchase of Android Inc.

Flops and duds…

Knol is Google’s own version of Wikipedia. Little exaggeration to say it has disappeared without a trace. Developed as an internal Google project.

Photo album software and web album; lost the battle to Yahoo’s Flickr. Acquired in 2004, Picasa was one of Google’s earlier purchases.

Created to compete with YouTube. When it didn’t really catch on, Google decided it would be easier to just buy YouTube for $1.65 billion.

Lively was Google’s answer to the much-hyped “virtual world” application Second Life. Launched in July 2008, closed January 2009 due to lack of interest.

Orkut was a social networking service designed to compete against MySpace and, latterly, Facebook. Only ever really took off in Brazil, leading to hosting being moved from California to Brazil in 2008.

Verdict

So, there isn’t much in Google’s record to suggest companies like TomTom or Rightmove have much to fear; the majority of its successes have come where it has been able to innovate (or at least buy innovative companies) and build on its core search product.

Taking a look at Rightmove, here is a website that is already being extremely successful in its niche. They have a well-established, highly functional, popular website (comfortably ranked in the top 100 sites in the UK).

A free alternative might appeal to estate agents, but this isn’t a concern for homeseekers. As far as they are concerned, the service they are getting is already free, so searching for property on Google Maps will probably hold little appeal.

Rightmove are also strongly branded with consumers and estate agents. Google is one of the most powerful brands in the world, but they aren’t known or trusted for property. How would Google fare if they launched a range of soup to compete against Heinz? What do geeks know about cream of tomato?

You can also guarantee Google’s offering won’t be as feature-rich as Rightmove’s - they just won’t work as hard on it. Rightmove’s very existence depends on the quality of service they can offer; to Google it will just be another experiment.

On past evidence, Rightmove & TomTom’s biggest fear should be that Google will buy them out, not out-compete them.

If you can’t beat ‘em, buy ‘em…

Google enjoys a reputation as an innovator and creator of brilliant new solutions, but the reality is very different. A large part of Google’s approach is hoovering up enough start-ups  to allow them to spit out new products on a regular basis. Throw it against the wall and see if it sticks.

The list of Google acquisitions is fairly extensive, with technology being repurposed or rebranded into exciting new products, e.g. Google Voice, Google Wave.

The company’s unique “20% innovation time”  policy has produced some great ideas (Google News, gMail) but it could be argued these are only a fairly small percentage of Google’s product output. Google News and gMail are also seven and five years old respectively - what have they done lately?

Funnily enough, buying other products and rebranding them is exactly what fellow tech giant Microsoft were famous for doing (see: History of Internet Explorer) and one of the reasons the Seattle company became so unpopular.

Google has the aura of an irresistable internet force, just like Microsoft was an ‘unstoppable juggernaut’ in the software industry - one that only anti-trust hearings and the Competition Commission could tame.

However, even before they get embroiled in anti-trust lawsuits, it’s clear that not every Google venture or project is destined for unmitigated success anyway - particularly those falling outside their core search specialism. Maybe Google should stick to sorting out their search offering and leave the soup to Heinz.

The premier captured headlines as he spoke of the increasing number of states putting pressure on the Chinese government to strengthen its currency.  Although European representatives had attempted to persuade China to let the renminbi appreciate, Wen Jiabao made it clear that little progress had been made and labelled as unfair the stance of protectionism by some countries in light of demands for the renminbi to increase in value.

He called such demands a “restriction on China’s development” and further stated that “maintaining the basic stability of the renminbi exchange rate has benefited China’s economic development and benefited world economic recovery.”

Backbone IT Group, which has its China headquarters in the former capital city of Nanjing was represented by Jonathan Wei, Director of Marketing for China. Our attendance at this event via the China Britain Business Council coincided with Nanjing’s selection as one of the top 10 fast-developing cities by the by the China International Urbanisation Development Strategy Research Committee.

The committee aims to illustrate the rate of China’s urbanisation. In addition to Nanjing, the other cities featured in the list were Shanghai, Chengdu, Beijing, Tianjin, Guangzhou, Fuzhou, Hangzhou, Changsha and Jinan.

Thanks to the internet, the content of the old-school media powerhouses (the likes of Reuters, Associated Press and Murdoch’s News Corporation) is now available to the world for free.

Many of the same articles you buy in a newspaper can easily be found online; a quick search on a service like Google News returns literally thousands of articles.

For several years, all of the major news organisations have been wondering how they can make money online, but it’s old warhorse (and self-styled “catalyst for change”) Rupert Murdoch who has decided to take a stand.

“Should we be allowing Google to steal all our copyright?” - Rupert Murdoch

These were Murdoch’s confrontational words earlier this year, and now he’s ramped up the rhetoric by suggesting News Corp. content could be pulled from the search engines altogether.

“I think we will [remove our websites from Google’s search index] but that’s when we start charging,”

Is he serious?

Many spectators have poured scorn on Murdoch’s threats, suggesting that the News Corp. content won’t be missed in a sea of free online content and that to cut themselves off from all that traffic would be suicide. However, if ad-suppored news content isn’t profitable, what have they got to lose?

News Corp. has already started to experiment with online paid services with its Wall Street Journal property, where subscription is required for full access. The site had almost 1 million subscribers in 2007; how many they have now is anyone’s guess.

The real danger is that once News Corporation jump, other news powerhouses could follow. There might seem like there are lots of news providers in the world, but the majority of the news organisations worldwide are in the hands of surprisingly few companies - just in the UK, News Corp. alone own The Sun, News of the World, Sunday Times, The Times and Sky Television. Other outlets include The New York Post, Wall Street Journal and Fox News.

Consider also that many news stories aggregated from the content of a few big providers and it’s easy to see how a big hole could be put in free online news.

News Corp goes Bing exclusive?

If News Corp. want to remove themselves from Google, the answer is simple. A robots.txt file would be enough to block Google from indexing its websites, problem solved.

However, before they do leap Murdoch & co. will want a clear plan on how they’re going to make up for the revenue a huge drop in audience share would generate. Enter Microsoft stage left. If rumours are to be believed, News Corp. and Microsoft have been holding meetings about the possibility of blocking Google and making the content accessible via Microsoft’s Bing search engine.

A big cash incentive from Microsoft could solve News Corp’s online revenue dilemma, with the addition of exclusive content helping to grow Bing’s market share - an aim Microsoft are aggressively pursuing. According to the Financial Times (not one of Murdoch’s), Microsoft has also been approaching other online publishers about the possibility of going Bing-exclusive.

Should Google be worried?

When Murdoch first made his comments about removing News Corp. from Google’s index he was largely met with derision by online commentators. After all, Google is hugely popular (they have approx. 90%  share of the UK search engine market) and whether they choose to rank a website and send traffic can often determine whether it lives or dies.

However, despite Google’s dominance, News Corp. and other leading news providers are also massive companies (at $30 billion News Corp. still had a higher revenue than Google last year) and if they act en-masse could yet have a big impact on Google’s usefulness to searchers.

It has to be remembered that Google own very little. The content on which they rely to sell their advertising is all owned by third-parties; from the smallest webmaster up to the likes of News Corp. and Reuters.

Google only became so popular because it was so efficient at delivering the results internet users were looking for, and news is a large part of that. If Bing can pull off some big exclusives with the likes of News Corporation, and if Google don’t pay closer attention to their increasingly spammy search results, the dominance of Google as the search engine of choice might not be quite as secure as it seems.

The companies who have fallen on entering or in doing business in China are many. Plenty of corporate giants litter the path to successful domestic Chinese business activity.

The latest of these is Microsoft. The US giant has recently announced the launch of Windows 7. However, a Chinese court has now ruled that Microsoft must stop selling versions of their Windows operating system which include fonts designed in China by a Chinese company.

The court has ruled that licensing with Zhongyi Electronic has been violated by Microsoft. The Chinese court has order the US company to stop selling many Windows versions including 98, 200, 2003 and XP.

Microsoft has indicated they wish to appeal.

Clearly, due business lost to  piracy in China - a country where most software, CDs or music can be found in stores or on stalls in pirated versions for just a few RMB - Microsoft will not view China as a huge revenue source in the current climate. However, as pressure is put on the Chinese to inflate their currency, as their growth and wage inflation increases, China is seen by many companies as a hugely important market in which to become established.

As highlighted by recent cases, the Chinese government is getting touch on cases of software piracy within its own borders and has even sentenced software pirates to jail sentences in recent cases. This should be seen as welcome news.

With the pitfalls great, with democratic institutions non existent and horror stories of failed ventures being extremely numerous, getting the right advice or the right Chinese partners is essential. Due diligence and being prepared for all eventualities is of paramount importance, as business in China is a different ball game to any other.

The reasoning behind the Quality Score is that Google wants to improve the experience of its users, because if users aren’t happy they are less likely to use Google in future and their advertising revenue suffers.

Presumably working on the same logic, Google’s Matt Cutts confirmed at last week’s PubCon event that load times will soon be a ranking factor for the organic listings. If your website loads too slowly, there is a chance your rankings will fall as a result.

The confirmation caused a bit of a stir in the SEO community, even though it will be only one of hundreds of ranking factors in Google’s algorithm, and probably not a hugely influential one at that.

The real question is: Who was crazy enough to ignore page load times in the first place?

Even though Google expressly tell them not to, countless webmasters focus exclusively on Big G; everything is done with an eye on whether or not Google will approve and grant a better ranking. “Google likes fresh content? I’ll fill my site with complete crap, but I’ll do it on a daily basis. I can haz ranking?”

Now that Google has announced it as a ranking factor, webmasters everywhere will be scrambling to optimise their load times, oblivious to the fact their visitors have had to put up with a treacle-powered website for months or even years.

Matt Cutts and co. are only making the change because they recognise the negative impact it has on user experience. People don’t want to go back to slow, clunky, unusable websites.

With this in mind, how much returning traffic have slow websites that offer a bad user experience missed out on over the years? Perhaps even more than they have sacrificed in the constant search for new visitors.

Target new visitor traffic, but never at the expense of the user experience. Don’t forget why they’re coming to your site in the first place.

We were very puzzled to receive this a class action - taking place against a company we have rarely had any dealings with directly, also in a different country to us, and relating to a time long ago.  Nevertheless, there are former Yahoo! (overture etc) pay per click search advertising customers who brought this class action back in 2006, alleging that the “Sponsored Search” and “Content Match” products provided by Yahoo! (overture etc) were in breach of contract because adverts were also displayed in spyware, domain name parking sites, sites are available under common misspellings known as “typo squatting” sites amongst other things. This was seen as unfair business practice.

So what has been achieved by this action?  Well, Yahoo has agreed to offer a new advert placement option so customers can control where their Yahoo adverts appear. It has also posed enhanced disclosures regarding traffic quality.  Yahoo has also agreed to allow advertisers to pose questions or request investigations regarding Yahoo advertising partners.  Oh, and if you are now out of business, you have a right to apply to receive $20 from Yahoo!

There is an interesting blog about this written some time ago http://blog.ericgoldman.org/archives/2006/05/yahoo_syndicati.htm.

Here it is argued by this blog that the actual wording Yahoo! gave regarding their sponsored search product, if read to the letter, was not misleading.  Clearly, some customers felt otherwise and in any event, the class action has now reached a proposed settlement, so however valid, this was not dismissed out of hand.

From one point of view, it is good to know that individuals or small firms are able to hold commercial giants to account as this case shows.  I have no real knowledge about this case and what specifically was alleged by Yahoo! in their promotional literature.  Nevertheless, the flipside is of course that although marketing materials should not missell,  they are there to create desire in potential clients.  Are there not cases where clients wish to buy something which they see will help solve their issues and  read extra into what is stated - or not even read fully the information provided?

To turn this on ourselves as a company, our search engine optimisation page mentions the words “search engine optimisation guarantee”.  Guaranteed SEO - now, if you read those words in isolation, what does that mean?  Does that mean that in using our service you will be ranked in the Top 10 for your chosen search terms and that is our service, end of story, and anything other than that means we have not provided our service?

Many companies offer guaranteed SEO, so-called.  What they mean is different from company to company.  In our case, we rely on people reading web pages fully.  We rely on clients reading sales proposals fully too.  Because what we offer in our particular service is that we will optimise your website with “white hat” on-site and off-site techniques and in the event that the service doesn’t result in top page rankings,  you have recourse to money back on your contract.  We are at pains to make sure that all our potential customers understand this clearly before sign up. We have an excellent search optimisation service, many top ranking clients  and we also want to market this in the best possible light in our literature.

It is good that the Yahoo!s of this world can still be held to account if they are misleading or misselling but equally as a potential client, it is important to ensure the service contracted is fully understood, especially with intangible services such as search engine optimisation.

Google’s CEO, Eric Schmidt recently gave an interview at Gartner’s Expo in Orlando, USA. In front of thousands of IT Directors Schmidt outlined his vision of exactly how he thinks the internet will look in 5 years time.

To most people, 5 years may not seem like a very long time but in technology terms it is an eon. In 5 years time computers (and other technology devices) will likely be much more powerful with more than quadruple the power of today, according to Moore’s Law.

Moore’s Law describes long-term trends in computer power and (so far accurately) predicts that the number of transistors  that can be placed on an intergrated circuit board will double every 2 years. This means that processor power, memory and even digital camera capability doubles every 2 years.

Schmidt envisions that the internet of the future will be largely dominated by Chinese-language content, with broadband speeds over 100mb/s for most users. The distinction between radio, TV and web will have disappeared and the internet will be be used for all these media.

There is also a very real possibility that we will see a bladerunner-esque cityscape with billboards showing full video on massive flexible screens.

With the increase in mobile devices, the internet is most likely to be used with true palm-sized media devices and based on current developments, possibly with flexible, expandable  displays.

According to Schmidt, the surfing behavior of today’s teenagers will be the model of how the internet will perform in 5 years time, jumping from application to application completely seamlessly while real-time information is displayed within the search results directly.

This fundamental shift to real time search results is already taking it’s very first steps with the recent news that both Bing and Google are going to show Twitter and Facebook results. The real challenge for both search engines will be how to rank these results while making sure any spam is dropped. How exactly Google does manage to overcome this challenge will be very interesting as by it’s very nature they will have to come up with an alternative to the page rank system in use today.

Clearly, as businesses, we have competitors and competition from many places.  So one more competitor, why worry?

Well, in this case, the anger of the local digital and IT business community has been awoken due to two key factors.  Firstly, the university has a high profile in the local business community, has worked in conjunction with local IT businesses as a facilitator for many years and has benefited from funding with a clear remit to involve local businesses in its IT strategy.  For companies previously involved with the University they see this as a betrayal.

More importantly, the services the University offers are provided using funding. Many digital and IT businesses are small in nature, typically with less than 10 employees, founded by entrepreneurs who have worked hard to market their IT services and win business in a cutthroat commercial world.  Is it right that they also have to compete with an educational establishment with vast resources?  Not only that, they are competing with a university offering the same kind of services as they are but the Uni has the benefit of government funding for this particular initiative to offer and provide the services in the first place!

It’s clear that calls of “not fair” would seem to be justified.  But to further add insult to injury, the university are offering their services - which include e-commerce websites, software development, prototype development amongst other things - for free. How can a commercial business offering similar services complete with a funded institution offering the same things at no cost?

It does seem a contradiction that millions of pounds are provided by government and the EU offering funding to stimulate business, to support new and growing companies and to encourage innovation and growth in the business sector, but at the same time funding is also provided to educational establishments to compete directly with the same businesses on what appears to be a very “unlevel” playing field.

In the past, our business spent a considerable amount of time developing and marketing educational software and extranets.  We learnt to our dismay that the BBC had been allowed to compete directly in the same market. It was galling to learn that an institution funded by the TV licence fee payer was allowed to compete directly with companies such as us - what chance did we have? This decision was referred to the EU for consideration as to whether the BBC entering the marketplace was just competition; the decision was made in favour of the BBC nevertheless. But this made us more determined - we focused on what we did well and on our strengths. Even though we eventually reduced our efforts in this market, our focus on the benefits of our service rather than concern of unfair competition meant we still won business.  This still contributes to the business today several years on.

Back to today. What initially was perceived as a threat form the University could actually be beneficial for us directly which seems a more positive way of looking at the situation. Our business is of the size whereby we may actually be able to take advantage of this new offering from the University. So, whereas I can see the viewpoint of local business and can totally understand their anger, two thoughts come to mind.

Rather than worrying about which customers may be lost to the University, is it not just another reason to focus on our own offerings as companies?  Should we not take this opportunity to make sure that we are delivering customer value and customer service whilst also scrutinising our own unique selling points, marketing and sales strategies in order to strengthen our position?  Initiatives from universities in the commercial world always lack a certain experience and finesse, and this one doesn’t appear to be promoted aggressively.  With limited places for businesses to take advantage, the threat is at worst a temporary one.

When you read the University offering more closely, it is directly linked to performing a transformational ICT role and projects lying outside its remit would not qualify for their help. Even though this may represent a threat to certain projects which commercial companies would hope to win, it would seem that any project would need to tick this “transformational ICT” box and as such, contracts under threat from the University offering may be significantly less than perceived.

Furthermore, any business with five or more employees may be considered under the university’s project.  For local IT businesses of that size, why not consider using their funding to help strengthen your own position?

The wider point here is why does the UK government fund educational and public bodies to compete with small and medium businesses. It seems a total contradiction. Nevertheless on a local level, the University here does engage well with local IT business and the threat of their offering is probably not anywhere near as great as perceived. This company favours continued engagement and partnership, as the benefits outweigh the negatives.