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Search Engines Leech Value from Web Sites 308

bigenchilada writes "Jakob Nielsen, former Sun Distinguished Engineer and now usability guru, proposes "that search engines are sucking out too much of the Web's value, acting as leeches on companies that create the very source materials the search engines index." He says that the value provided by search engines may be tilting too much in favor of the search engines. The web sites that create content are now simply fodder for the search engines' revenue stream."
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Search Engines Leech Value from Web Sites

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  • by yagu ( 721525 ) * <<moc.liamg> <ta> <ugayay>> on Wednesday January 18, 2006 @11:49AM (#14499858) Journal

    This "tilt" intrigues. It's interesting in that it describes an unfolding and evolving business model to which companies must react.

    I like that he doesn't just whine about the problem but offers solutions too, to provide the "stickiness" required to keep customers coming and interacting with companies' sites. This is the way the evollution should work.

    Oh, that the RIAA and the music industry would have to abide by the same principle now that their business model has changed, rather than buying legislation to cripple advances in technology (which, btw, will NOT work).

    Maybe, maybe, the music industry could learn something from this.

    • Maybe, maybe, the music industry could learn something from this.

      They will. I've been "crying" at slashdot about how I feel copyright should go away and never come back. Search engines and other "find an answer" utilities will help us get there.

      You shouldn't give all your answers on any transportable media format. If you have something to offer, give people an appetite to come and see you and pay you for the rest. If you're a band, put up a bunch of your catchy tunes on BitTorrent and tell people to com
      • I agree that copyright laws need to change I don't think they should go away.

        People spend time and capitol to invent something, a book or a new type of fuel. It might cost millions to develop a new medicine and if there where no copyright laws someone could copy that product and sell it cheaper (because they do not need to recover the startup costs). Now if every time you spend your money and time to create something just to have someone copy it really kills the incentive to create it in the first place.
        • I promised not to go off topic, so I won't. Hit me up with an e-mail though sometime regarding this issue. I'm working on a deep article about banning copyright (I'm opening a 6 figure music studio in Chicago this spring called No Copyright Studios) for artists who want to succeed without the cartels and their lifetime monopoly granted by government.
      • "If you create content that is mass produceable, don't give out all your answers in that mass produced content. Hold some back, hold the most important parts back, for one-on-one or face-to-face interaction!"

        The problem is not mass production. VCR remotes are mass produceable. Toy cars are mass produceable. Silicon chips are mass produceable.

        And e-book is infinately producable. For $0 cost I can share an ebook with the entire digital population, whether I wrote it or not. Sure, hook people with a cliff hang
        • This is a debate I don't want to develop on slashdot as I always get e-mails telling me to stop going off topic.

          I am putting my money where my mouth is -- I'm opening a studio to record music, podcasts, video shows and the rest. I'll offer professional engineers and professional hardware freely or at a great discount in exchange for the artist giving up any right to the content.

          We don't know how it will work because no one has really tried it -- the Internet now lets us. In my life I have made 2 books (so
          • by RingDev ( 879105 )
            Where you turn a profit. You mention Thousands of dollars over years. $2,000 over 5 years isn't a profession, it isn't even worth reporting on your taxes.

            From your post it sounds like you are saying content is worthless, but the author has value. But to me as a consumer, I couldn't give to shakes of a monkey's ass over who wrote my SQL Bible, but it's content has saved me hours of head banging frustration.

            Why would I pay $20 to meet the author of the book when I already have the book? Why would I pay $20 fo
        • Actually, you cannot distribute an e-book for $0 cost.
          Bandwidth is your distribution cost - yes, you can claim that something like bittorrent would make that insignificant....but aside from viral marketing/word of mouth how exactly will anyone know about it? A webpage? Bandwidth.
          You're probably right that for a very popular title the cost is negligable over the long haul, but don't claim it's free.
      • put up a bunch of your catchy tunes on BitTorrent

        A slight technical nitpick: BitTorrent is not a centralized network onto which songs are put (in the manner of eDonkey, et al). Rather, it is a file transfer protocol. One doesn't put songs "on BitTorrent" any more than one would put songs "on FTP" or "on HTTP". Rather, one _makes songs available_ via FTP, HTTP, BitTorrent, etc. :-)

        This may seem like a technicality, but the distinction between a protocol and a singular centralized implementation thereof is
      • by cherokee158 ( 701472 ) on Wednesday January 18, 2006 @12:59PM (#14500635)
        A book author typically makes less than five grand for a GOOD selling book, which can take months or even years to produce and get published. Copyright law helps to insure that he makes royalties above and beyond his advance(sometimes), and makes money from resale rights. You business model would see him lose a lot of that money, and spend valuable writing time touring the country signing books in exchange for his pittance. (Which writers rarely get paid for at all right now, beyond expenses...it is normally part of their contract that the publisher has the discretion to request them for special appearances while promoting their book.)

        Most bands working the clubs make a few hundred dollars a night, which is split among the members and their crew and rarely adds up to much. Big name acts make millions, but booking their huge venues is not cheap, either, and a LOT of people get their fingers in the pie. They often make less than you would think.

        Commerical artists get paid very little for their work, unless they are (once again) among the top tier of a very competitive industry. Stock art and photography have put increasing pressure on their revenue sources, as most publishers look for low cost solutions to their graphic needs. Art has, and always will, take time to produce, and a single sale rarely justifies the time invested in a work of art. Copyright law enables the artist to offer different rights packages to different clients (first North American serial rights, reprint rights, exclusive rights for s particular sales medium, etc), which can help offset what would otherwise be a clear loss.

        It's that, or the galleries.

        All of these professions exist because copyright law makes them workable.

        Copyright law could stand to be loosened (specifically, it's duration needs to be shortened, and it needs to be less retrictive regarding derivative works), but abolishing it altogether is not such a good idea from the standpoint of most of the truly creative people in this country. It's hard enough to make a living as an artist, musician or writer now. We'd have to put them on welfare if we abolished copyright law altogether.

        Everyone here seems to asume that copyright law is just the lapdog of large corporations and overpaid celebrities. In some ways, it is. But for every band of thugs like the RIAA, there are dozens of little guys ekeing out a bit of money from the arts who really need that protection...mainly from parasites like the RIAA. (Most people are too decent to rip you off, but corporations will rob you blind in a heartbeat.)

        What you propose is intellectual socialism. I think we've all seen just how well things work out when "the people" collectively own all the property.

        No thanks.

        • by dada21 ( 163177 ) * <adam.dada@gmail.com> on Wednesday January 18, 2006 @01:12PM (#14500792) Homepage Journal
          A book author typically makes less than five grand for a GOOD selling book,

          Both of my free books have earned me more than $5000 from giving them away for free to the first reader. In fact, I believe I have made over $100,000 in my life based on the business I have generated from business owners who want my opinion on subjects contained within my free books. Three of my peers have done the same, and all of them have found significant profits from giving away the generalized content while selling the specific content directly to the end customer who can pay the most.

          They often make less than you would think.

          Two of the most popular bands on MTV right now are people I know directly from their involvement in the Midwest music scene for years. One of the bands (I won't name them now) has brought in millions for their promotions company and has yet to make more than the $200,000 advance they received. Their album is consistently a top seller and they're relatively broke compared to those who know how to manipulate the content cartels. On the flip side, a few local bands who I have told to give their music away freely are making very good money on their local shows -- sometimes over $1000 a night. I believe I will be able to work with many bands over the next few years to making real money without using the force of government to guarantee protection.

          It's that, or the galleries.

          No, if you're a commercial artist, go and get a salaried job with a commercial distribution house or gallery company. That's how you can make money. Yet most artists feel they want to risk making nothing in exchange for maybe making millions? Come on, its a sucker game. Copyright makes the distribution cartels wealthy because of copyright. I'm finding ways to change that by dumping government as my "protector."

          We'd have to put them on welfare if we abolished copyright law altogether.

          Sure, you believe that. We'll be opening our No Copyright Studios this spring in Chicago, come and visit. I already believe we'll clear a clean million for the bands and content producers in the first year -- and every thing we record in the studio will instantly be public domain. We'll be watching for others to take the content and redo it, and then we'll be able to use that content as well for our own gain. People with talent CAN turn that into profit.

          What you propose is intellectual socialism. I think we've all seen just how well things work out when "the people" collectively own all the property.

          Huh? I'm talking about real capitalism. Capitalism does not need regulations or monopolies on force. Capitalism is about supply and demand. CD content or ebooks are infinitely available in supply, so the price should be $0.00. Don't put your most profitable content into CD or e-book form, sell that portion of it in a face-to-face mechanism.

          A few dozen people I've met with have listened to my advice and have increased their income significantly -- enough so that they're helping to provide cash for my studio and the promotional side of things. In fact, one of the guys investing nearly $10,000 was broke 2 years ago until he gave up and started to give his products away for free, while gaining a customer base that didn't exist before (he's a painter). Now he makes close to 6 figures a year.

          Don't tell me you've made millions because of copyright, no one does. Instead of 10 people making 20 million a year each, I'd rather see 100,000 people making $50,000 a year a piece by producing a live product for sale, and giving the recorded product away electronically, or trying to sell the official release for profit.
    • by Dun Malg ( 230075 ) on Wednesday January 18, 2006 @12:22PM (#14500182) Homepage
      I like that he doesn't just whine about the problem but offers solutions too, to provide the "stickiness" required to keep customers coming and interacting with companies' sites.

      His "solutions" are pretty weak though:
      1-general spam (which he calls "email newsletters")
      2-targetted spam (for those who intententionally/foolishly request more info)
      3-encouraging discussion group shills
      4-trading links with "affiliate sites" (pyramid scheme, as another poster suggested)
      5-push spam (RSS)
      6-put your web address on your product label (gee, what a stroke of genius.)
      7-hardware lock-in (his example is iPod and iTunes)
      8-"mobile features". Dunno what the hell he's talking about. He prattles about how search engines are hard to use on mobile devices and how a better position is to be "an icon on somebody's Blackberry". Is he advocating "adware" for mobile devices? If so, all I can say is "nice, dickhead".

      The real problem is that he's completely misinterpretted the role of the search engine to support his conclusion. The primary purpose of the search engine is to direct people to the sites they 're looking for. His "evidence" that the engines are usurping the sites' place is a flimsy bit of speculative strawman that "people have begun using search engines as answer engines to directly access what they want -- often without truly engaging with the websites". Ridiculous! People looking for a simple answer that can be culled from the tiny snippet of text in a search engine are always going to use a search engine for that. RSS feeds, hardware lock-in, adware on mobiles-- those are all just typical mass-marketing obscenities which will do nothing to lure active seekers of information. For that you need to get placement in search engines, because that's what people like that use. I think he's just pissed that competitors are using search engines as well, creating a bit of an advertising "arms race". Well cry me a river. Welcome to the real world of business, chief.

    • I feel that he's avoiding (not missing, mind you) an underlying problem of conflicting interests:

      User: I want information on X
      Search Engine: I want to give users information about X and advertise services related to X
      Websites: I want users to become involved at my website that contains content about X

      Users want a quick answer, Websites want them to spend some time, sign up/login/register/ignore the "subscribe to newsletter" checkbox being pre-checked, whereas Search Engines want to provide things that look
  • by dada21 ( 163177 ) * <adam.dada@gmail.com> on Wednesday January 18, 2006 @11:50AM (#14499863) Homepage Journal
    This is likely why Google and Yahoo are offering monetization options for content publishers (and creators). Plus, if you don't like search engines "leeching" from you, just set up robots.txt and say no to everything -- they'll go away.

    I find that search engines account for nearly 70% of my visitors overall, and account for nearly 60% of my return visitors. I don't believe I can rely on my websites to generate income for me (even if I start selling more products on some sites). As I don't copyright any of my text (I am anti-copyright and put all my creations into the public domain immediately), I use my writings to try to increase my income in my regular life -- speaking engagements, one-on-one consulting, and professional advice to companies and individuals in the markets that I'm valuable in.

    Nielsen is nuts if he thinks that the web should scoff at search engines. Search engines are (to me) the biggest reason for the web's overall explosion. Bookmarks help, links from other sites are great, but Google, MSN and Yahoo are the big reasons people can find what we want when we want. If they can't index our sites, how can they send us traffic? Sure, he acknowledges this in his article, but he says that web sites are going from information stores to answer engines. This is completely true, and we all fall victim to our own stupidity when it comes to creating content in an "answer" fashion. I've been working over the past few months to try to create extended interest in my most popular pages (found via search engines) by offering crosslinks to other articles. The longer I can keep the people interested, the more likely I am to see them come back again and again. If you make old "answer" pages, offer links out of those pages that give people MORE information, or give them more questions to find answers to.

    Content is worthless without distribution. I prefer face-to-face distribution for profit by using more generic information to "catch" the customer who will hire me. Yet without the search engines, how will I get the word out? Hire a publicist?

    Slightly off-topic here:
    I think its crazy to put quality profitable information on a website (or even in a book, on a CD or in a movie) that you don't want used by others. Copyright may "protect" you from someone knocking it off in high quantity, but that isn't always where information is the most valuable. Using information in an expert situation is how you can turn quality profitable information into that quality profit -- by selling your advice on a person-to-person level (I call it a performance).
    • Plus, if you don't like search engines "leeching" from you, just set up robots.txt and say no to everything -- they'll go away.

      That's the beginning and end of it, really.

      These "content providers" (or this one in particular) realizes this, but they also realize that search engines are a major driving force for their traffic and therefore revenue. I'm not exactly sure who the visionary who wrote this article is, but he doesn't have a clue. Content providers NEED search engines.. to deny search engines in fa
    • search engines destroy rents, if you try to "sell" something either for money or ad views and you charge too much, either too much money or too many intrusive ads your customers will go looking elsewhere and find someting comparable at the right price.
      • A particular search engine destroys rents. If you could advertise with a site other than &@@&!£ and get some decent payback, you could get search engines to compete for your business.

        Ultimately, this rent-stripping gets in the way of price competition, as there is less rent to be delivered to the consumer in time. That is, &@@&!£'s near-monopoly is costing the customer money.

    • Offtopic about offtopic.

      I think its crazy to put quality profitable information on a website (or even in a book, on a CD or in a movie) that you don't want used by others. Copyright may "protect" you from someone knocking it off in high quantity, but that isn't always where information is the most valuable.

      Finally. I have been listening to your anti copyright tirades for some time, even took part in a few, and have never fully understood how you could hold that opinion.

      Now I understand. I personally stick t
    • (I am anti-copyright and put all my creations into the public domain immediately)

      Why? Why not use a Creative Commons License [creativecommons.org], and place no restrictions? Or simply ask for attribution as your only restriction? While I understand a distaste for copyright on philosophical grounds, by disregarding it completely you are actually making your work less attractive to most people.

      • The cash I am investing in my No Copyright Studios this spring will be a huge learning experience. I already have numerous nightclubs/concert halls lined up around the Midwest to help promote the bands that join us in repudiating the use of copyright, and I even have record stores and websites ready to promote the music. The content is freely available and copyable, our focus is to offer fans the "official release" and to offer the "official merchandise" while also targeting people who want to openly offe
        • If someone merely bootlegs your work without enhancing it, I don't see how they can really profit more than the original person can

          Possibly WalMart could. Or Amazon or anyone with a more visible and effective distribution system. Would people bother to visit individual band sites rather than just going to Bootlegs-R-Us.com? Would they even be able to distinguish between the "official" and bootleg sites, if the latter have as much legal claim to your material as you do?

          • Great questions -- no one has an answer. Right now people are accustomed to the current processes of the content market -- usually controlled fully by the cartels.

            I'm looking to change that "habit." I've found some great bands who are willing to give up control in exchange for promotional dollars towards their live performances and their official works. Everything we "release" freely will be indexed by the various Internet engines so that the lyrics or content is "dated" by the original creator. This do
    • The article isn't about the cost for companies from all the bandwidht used up by indexing your site. Nielsen argues that the high prices for Googles targeted web-ads are killing the internet sites. In my opinion, Nielsen is nuts. He doesn't grasp the concept of supply and demand at all.

      He first argues that if a search engine ad will statistically give your company $4 in net profit from additional sales, your company will be willing to give a search engine $3.99 for every clickthrough. He then argues that al
      • Google has a near monopoly. Search engine compete for customers on search results. Google wins here.

        Advertisers win on most hits. The potential hit ratio is pretty much predetermined, so there's little meaningful competition between search engines.

    • dada21 wrote:

      This is likely why Google and Yahoo are offering monetization options for content publishers (and creators).

      I have nothing against Monet, but I'd certanly like other options like boudinization, renoirization, or even rembrandtization.

    • Precisely. The search engines add significant value to the web, much more than they currently get in return. This is not a zero-sum-game, and just because search engines make money doesn't detract from your website at all; it makes your website more valuable if people can find it easily. I don't care how much money Google manages to make from helping me get my website [celtic-fiddler.com] noticed! In fact, I hope they make LOTS of money that way. Jealosy of search engines is just pathetic.
  • Don't like it? (Score:4, Informative)

    by Mattygfunk1 ( 596840 ) on Wednesday January 18, 2006 @11:50AM (#14499867)

    ... then learn to use robots.txt. Simple really.

    Laugh daily funny adult videos [laughdaily.com]
    • Not only robots.txt, but also Google has a form to request removal of your site. I don't know, but wouldn't be surprised if both Yahoo and MSN didn't have the same.

      Let me guess. I think he doesn't want to give up the traffic that search engines generate. He just wants search engines not to make money. Did I guess correctly?
      • Nope. The article is about search engine advertising. The gist is that if you improve your site to make more money, your competition improves too, so you both have to bid higher for placement in paid search listings.

        The summary failed to capture the article's thesis, which is mostly Nielsen's fault, as he refers to "value" in his own summary and he really means "cash".
  • by erroneus ( 253617 ) on Wednesday January 18, 2006 @11:51AM (#14499878) Homepage
    I'm sorry. Search engines are to the web site's benefit as well... at least to commercial sites.... well research sites too. Let's face the reality. There cannot be a way to "balance" the benefit. You either do or don't benefit -- it's an on or off situation. If you don't benefit, there's "robots.txt" right? Whiners!
  • Wikipedia (Score:5, Interesting)

    by ObligatoryUserName ( 126027 ) on Wednesday January 18, 2006 @11:51AM (#14499881) Journal
    The question, then, is how much will the growth of Wikipedia negativly effect Google? I know I've started doing Wikipedia searches for things I would have Googled for before.
    • Re:Wikipedia (Score:3, Interesting)

      by Basje ( 26968 )
      I use google to search wikipedia. The search function in wikipedia isn't real good
    • Re:Wikipedia (Score:3, Informative)

      by CaptSnuffy ( 843104 )
      Yes, definitely. I use wikipedia for things that I actually want accurate information for. Wikipedia isn't perfect but it'll get you good results without you having to sift through links. P.S. Firefox haas a built in Wikipedia search tool. If you do "wp " in the address bar it'll try to match it. I love it.
    • Shrug. I just use Google.

      For an awful lot of things I'm interested in, the first page is dominated by hits on Wikipedia and its mirrors anyway. I'm sometimes frustrated (e.g. when researching a Wikipedia article) by the difficulty of finding non-Wikipedia content with Google.
  • by Godeke ( 32895 ) * on Wednesday January 18, 2006 @11:52AM (#14499890)
    I read this article when it went high on the del.icio.us/popular list. Long story short: this guy is complaining about *advertising* links in a search engine. Then he goes and compares a bunch of apples to oranges and concludes the sky is falling (yes, I meant to mix metaphors, as this is what this guy does in his complaint).

    If you look at his analysis, he is coming from this from a perspective that most of the Internet can't really related to: a business to business commerce site that uses no advertising revenue and pays a high "click-through" cost for each visitor from a search engine.

    After all of those constraints are in place, he further comes up with the idea that by making $4 per visitor (after COGS and conversion rates) "the site can pay $3.99 per click". Well, I guess if you really are hellbent on giving your profits away you could...

    He tries to justify this by saying that "if you don't pay this, other sites can outbid you". He justifies this by saying that others will use his sites methods to improve conversion rates and therefore they will outbid you with the increased revenue. Well, maybe, or maybe they will keep some of the profit.

    This commentary is not applicable to those with advertising supported models, nor those who are willing to differentiate themselves by more than hyper-competition in search engine optimization. Which means pretty much most web sites are *not* going to see the results that are predicted here. The ones that *will* see this are those that don't have a differentiator and live and die by the converted sale. I think I will cry now... [sniff]... poor toner refill sites.

    His solution: #1, spam the user. #2, notification spam. #4, multi level marketing.
    • He thinks that buying a more costly ad == higher sales. Yup because no product with a HUGE marketing campaign has ever failed and every product launched on a word of mouth basis has been a dismal failure.

      See that box of ads next to your google search resuls mister Nielsen? I got a little secret to tell you. Not all of them paid the same amount to be there. Neither do people just select the top result. They look at the ads to see wich one best seems to meet their needs.

      Successfull advertising != spending a

    • by nacturation ( 646836 ) <nacturation@@@gmail...com> on Wednesday January 18, 2006 @12:46PM (#14500432) Journal
      After all of those constraints are in place, he further comes up with the idea that by making $4 per visitor (after COGS and conversion rates) "the site can pay $3.99 per click". Well, I guess if you really are hellbent on giving your profits away you could...

      Actually, you could pay more and many sites do. It's called the lifetime value of a customer [wikipedia.org] which, in the long run, could be hundreds of times the initial sale. Consider a site like e*trade which might give away double their profits on the first transaction. Odds are pretty good that you're not just going to buy stock and then forget about it. You're eventually going to sell the stock so they make profit there too. And odds are good that you're not just going to buy and sell one stock and move on to another brokerage. You'll keep using more of their services, and the value of you as a customer will eventually exceed the cost of acquisition.
  • ...they're paid to be clever. Sadly, that's also true of private-industry "fellows," "distinguished engineers," and such.

    The web sites that create content are now simply fodder for the search engines' revenue stream.

    No they're not. In the future, please perform your mental masturbation in the privacy of your own home. Now go away.

  • Here's a one tag solution for that "problem."
    <meta name="robots" content="nofollow, noindex">
    Go for it if you dare.
  • Whatever, dude. (Score:3, Interesting)

    by alhaz ( 11039 ) on Wednesday January 18, 2006 @11:53AM (#14499899) Homepage
    Tell it to the florist i know who registered 18 different domain names and put up six different websites for his 1 business and stuffed them silly with keywords.

    It's total and utter bullflop, and it works. And we hate him for it . . .
    • similarly, when I google for "$product review" I get about a kajillion "compare prices for $product" websites. then there's the adwords BS that means whatever you search for ebay will claim to sell it for less.

      the number 1 rule of information is that profit motive fucks up content. that's why the BBC is one of the greatest services in the world.
  • For me, because of how fast google loads on my mobile device, I *prefer* to use it instead of going to a site directly. While this furthers his reason for writing the article it doesn't explain why websites have failed to cater more towards mobile devices. Yeah, writing for WAP is a pain in the ass as well as making sure that the sites load correctly for numerous browsers but that's what the sites SHOULD be doing anyway.

    Instead of suggesting that we move to direct e-mail marketing and using some sort of p
  • by Anonymous Coward on Wednesday January 18, 2006 @11:54AM (#14499909)
    The problem is that copying stuff from my website is too easy. We need stronger copyright laws.

    No, wait -- we need *weaker* copyright laws because then I can use anything I find on my site.

    Er, no, wait -- we need *stronger* copyright laws because big-money search engines are destroying the value of the little guys.

    No, no, no, wait -- we need *weaker* copyright laws because then I can download movies legally.

    Ah. I've got it. We need *weak* or *zero* copyright laws for me, and *strong* copyright laws for everybody besides me.
    • by Concern ( 819622 ) *
      We just need a sane and balanced approach. The false dilemma between the content trust demanding absolute and open-ended copyright powers, as well as exceptions for civil liberties and human rights to enforce them, and copyright anarchists who want to abolish copyright, is ridiculous.

      Notice, though that big companies and big money lobby for the former every day in Washington and abroad, whereas comparatively few /.'ers want the latter - many if not most would be happy with the pre-DMCA pre-UCITA rules that
  • If your search bid stays the same, your ad will sink off the page as more and more competing sites improve their design enough to afford higher bids. Our site therefore has no choice but to increase its own bid to $7.99 per click if it wants to stay in business.

    I agree to some extent that the search rankings are somewhat unfair, but a good website will probably have the power of word-of-mouth advertising.
    If the site is indeed very useful and well-liked, it should have no problem sticking around.
    I gues
  • ...Free. I don't pay them to index my sites, and they send me potential customers. Somewhere around 80% of my traffic is related to search engines. Sure, they're getting money from advertising other sites that may compete with you, and they don't produce content of their own. But at least I don't have to pay 400 dollars for a page in the yellow book and reach a whole city of customers when I can have my site indexed and reach a whole world. (unless they don't speak english, then they can't get much value fr
  • Food for thought. (Score:5, Insightful)

    by Concern ( 819622 ) * on Wednesday January 18, 2006 @11:58AM (#14499947) Journal
    The author's point is, in a nutshell, that web business are reducible to the cost of their traffic and the revenue it can generate.

    His example is something like this: 100 users with a 1% conversion rate for a $4 net profit means you pay $3.99 to the Search Engine for traffic to make 1 cent. Since the search engines are effectively a traffic auction, you always pay exactly as much as your competitors are willing to pay plus a small amount...

    I find fault with this argument, because search engines are not a traffic auction, exactly. Google sells adwords but it primarily gives users what they ask for, not what others pay for. Still this is the reality and the mindset of many online businesses, if there are 10,000 other companies like yours, you can only be seen by buying traffic.

    His concern is that the search engines' position is too strong - they're the bottleneck, and they price like it. They've created a market where they take most of the profits from any online enterprise. If web businesses find a way to increase margins then it instantly translates into increased search engine fees rather than increased profits, and google earns it by sitting back and "doing nothing."

    Of course, they do something, but just like Sony and Tower records, their indispensability may have been converted into a disproportionate amount of the profits of global enterprise.

    From 20,000 feet, thinking in a way we seldom do anymore, we could consider alternate regulatory regimes that might tinker with the market. For instance, if you accept that this state of affairs may not be optimal (a few megagiants and millions of small businesses beholden to them), you could flatten it by reinterpreting things like copyright, so that the search engine is not entitled to list anything without splitting a cut of the profits of that enterprise with the content creators.

    I'm not actually suggesting this, just trying to seed discussion. One thing that this vaguely reminds me of is the Neal Stephenson concept of the free-market encyclopedia, where anyone can write anything and upload it into the system, and then you get paid, more or less directly, for traffic... presumably by redistribution of fees paid into the system to view content. It's appealing in the way it incentivizes creation of content, especially in such an egalitarian way.

    We've got an all-you-can eat model where you pay for access and others pay to publish and writers can pay the rent with advertising or subscriptions... and of course, we have a free market for search services... I like it well enough, but I do sympathize with content creators, who still seem to struggle to realize the value of their intellectual works.
    • Re:Food for thought. (Score:3, Interesting)

      by K-Man ( 4117 )
      There's also the question of whether a search engine is a natural monopoly [wikipedia.org]:

      In economics, a natural monopoly occurs when, due to the economies of scale of a particular industry, the maximum efficiency of production and distribution is realized through a single supplier.

      The internet was once hailed as the equivalent of a land rush in the 1800's, when farm land was free for the taking, and it was presumed that independent farmers would rule the country. Unfortunately these small farms needed transportati

    • Re:Food for thought. (Score:3, Interesting)

      by rpg25 ( 470383 )
      I think part of the problem here is that we still don't have a protocol for micropayments. Firms who spend money putting useful content on the web really only have three models for getting income, that I can see:
      1. They take advertising. Attacking this revenue stream is what Nielsen is complaining about, IIUC.
      2. They sell you a subscription. IMHO, this is never going to work. There's just too much to subscribe to, and each subscription costs too much. E.g., I get a lot of my interesting essay pointer
  • I'm not at all certain that the search engines are sucking value OUT of the rest of the "content" sites on the Internet so much as they are adding value TO them. Think: Network Effect. I put up a site, and no one knows about it. I can spam all my friends with links, or put them in my signature block on other popular Blog sites, but that's limited to how many people and places I can personally hit.

    On the other hand, include a couple of keywords or search terms that people are interested in, and I start

  • by tylers ( 666248 ) on Wednesday January 18, 2006 @12:00PM (#14499968) Homepage
    The relationship between web sites and search engines is symbiotic, or specifically a type of symbiotic relationship called Mutualism [wikipedia.org] where both sides benefit.

    The search engine benefits from the ad revenue; the sites benefit from the increase in visitors. Both sides win.

    • But the point of TFA was that just an increase in visitors isn't necessarily an advantage to some sites. It's only a benefit if that increase translates into higher profits, or more awareness for your cause, or otherwise furthering whatever the goal of your site may be.

      In particular, if higher traffic makes you more money, but you have to pay an equal or greater amount to a search engine just to get it, then only one side is benefitting -- and it's not the one doing the real work and providing the real co

  • Why not create your own index of content, with headlines, and/or little blurbs, so the search engines find that and only that throught the use of your robots.txt file?

  • How's this bad? Modern search engines now spit back sound-bite sized chunks of data - a chunk of data that is JUST long enough for the modern american attention span. There's no downloading PDFs (hate that) or trying to parse some asswad's idea of "interface design" (hate that more), or flash, or flash ads (hate that almost as much). I plug in a query and I get back a short list of bullet points I can skim through in seconds, thence on to the site that looks like it's got what I'm looking for - saving me
  • Please don't (Score:2, Insightful)

    by jmc ( 4639 )
    "He says that the value provided by search engines may be tilting too much in favor of the search engines. The web sites that create content are now simply fodder for the search engines' revenue stream."

    Yes, and this is exactly why everyone I know in the e-commerce business spends an exorbitant amount of time trying to figure out how to prevent their site from becoming "fodder" for Google's revenue stream. Because, of course, Google brings absolutely no value what-so-ever and and does nothing to drive t
  • Lame (Score:3, Insightful)

    by hackstraw ( 262471 ) * on Wednesday January 18, 2006 @12:03PM (#14499999)
    No wonder Sun has so many problems. They used to be the "dot in dot com"
    until IBM took over that in 2000 or so*.

    The value of the web is priceless (and free!), how could a search engine
    to find stuff on it decrease that value?

    This is the one of the most silly things I have read since Taco said the
    iPod was lame.

    TFA says, "We've known since AltaVista's launch in 1995 that search is
    one of the Web's most important services."

    Then, "There's no doubt that search engines provide a valuable
    service to users. The issue here is what search engines do to
    the companies
    they feed on -- the companies that fund the creation
    of original information. Search engines mainly build their business on
    other websites' content. The traditional analysis has been that search
    engines amply return the favor by directing traffic to these sites."

    I use Google for everything. I never type in a blind url, because I make
    mistakes from time to time and get some typosquatter or other troll.
    What I do is go to the Google box next to the url box and type something
    like "barns an noble". Notice I mispelled the name, but even with my
    error, the first linke was "Barnes & Noble", which is what I was
    looking for. (DNS is already dead because of this, Google is the dot in
    dot eveything).

    I would have no idea that the url would have been barnesandnoble.com.
    Many users don't know that a & is not a valid url character, and
    they would mistakently put it in the url if they were to blindly type
    it. Most web browsers would give a worthless error message like "The
    specified server could not be found." Thanks. I used to run a web proxy,
    I've seen everything in the world typed into the URL spot.

    What Google and other search engines have done is flood the market with
    worthless, fly by night companies. Stable ones have no issues. Search
    for Apple computers, or Oracle database, you get useful links. Search
    for a commodity item you can get anywhere for the same price, and you
    get every sleezeball in the world trying to get your $25, when you could
    also just have walked to the store and got it for $30, and played with
    it that day.

    Niche items are different. I can find them via Google. I have a nice
    whip cream dispenser that had the rubber grommet freeze because I was
    making so much whipped cream (right). I paid something like $40 for it.
    I wanted a new grommet for it, and I used Google to find a store in
    Pennsylvania that sold me the grommet for something like $2. I ordered 2
    boxes of whipped cream to offset the shipping, and in less than a week I
    was back to making whipped cream!

    I could have never, ever have found a $2 part without Google.

    Google is a monopoly for a reason. Why would you need more than one
    place to find all of the questions you have?

    * Sun boxes used to run the root DNS servers, and that is were they got
    the idea that they were the "dot in dot com". IBM took over that role in
    2000 or so, I'm not sure if they still have it or not.
  • by jridley ( 9305 ) on Wednesday January 18, 2006 @12:05PM (#14500026)
    I find that google blows away most commercial sites for finding content on those sites. I use google when looking for products on web store sites. In that respect at least, google is doing them a favor. I'm finding products I want and buying them because Google is there; many of the sites have crappy or nonexistant searching capabilities. Heck, I've tested some; I can be looking at a product I found on their site, and I can type in the words that are in the name of the product into the site's search, and it will tell me there's no such product. Ridiculous.
  • The question is: How can websites devote more of their budgets to keeping customers, rather than simply advertising for new visitors?

    How about implementing a decent search engine on the site so I don't have to go to Google to find an answer to my question. I can't tell you how many times I've gone to IBM or HP to look for something other than drivers and had to go to Google to get my answer. Usually this involved how to diagnose a problem but sometimes it involves a manual.

    Improve your FAQ. Ever

  • by zaydana ( 729943 ) on Wednesday January 18, 2006 @12:07PM (#14500043)

    After I RTFA, I basically got one thing out of it. The writer was complaining that unless you keep working at a website you made, you are going to not earn as much money.

    I've got news for him - you can't expect to earn money out of nothing. I know some people manage to do it, and good for them. But its not something you can expect to do. If you don't work on improving your site, and others do, its not the search engine companies' fault that people will be more interested in their work and so they can afford more on advertising.

    I do see his point - the search engines will get paid more because your work improves, and other's work improves. But this is not something that is unique to search engines. It is part of advertising in general. The larger a company gets, the more it can put into advertising, which means the competing companies need to keep up with them and put more into advertising themselves. It works in a bit of a different way, but its the same concept.

    It doesn't matter what advertising it is - TV, Radio, Newspaper, Search Engine - the way the companies make their money is the same. Google, microsoft, yahoo, etc. are not doing anything new here, they are just brining proven concepts to a new medium. Why do we critisize them for it? If anything we should be critisizing the people who have drummed it into many a programmer that once you've written something, you shuoldn't need to maintain it.

  • His analysis is sound, insofar as it goes, but it misses a key fact by assuming that advertising the web site is the purpose of advertising. Sure, making sales through a web site is a good thing, but the important part is "making sales", not the mechanism through which they're made. So what? Well, if advertising my products through AdWords becomes more expensive per unit dollar solde than a competing medium (the paper, the yellow pages, television, radio), then...I'll use that competing medium. In fact,
  • Search engines only "leach" off of sites that seem to base their whole business model on users clicking through all over the place and seeing a pile of ads. Search engines allow users to find just the content they desire and no other, thus removing a significant number of "ad impressions."

    This isn't an issue for sites that truly publish useful or innovative content. The search engines simply allow users to find this content.

    It really only hurts news agencies and sites who simply parrot the AP Wire or Reut
  • I just gotta say it anyway: some of Jacob Nielsen's more obvious tips have been good, but cases like this shows the man's a hack.
    It's just one too many paranoid Alertbox articles than I'm ready to take.

    Search engines are what binds the Internet together, and this is what makes them so successful. But as a victims of their success, now everyone wants a piece of their pie.

    The music and video industry wants royalties from music/video search, ISP wants to tax them for "using their pipes", newspapers wants to ta
  • search engines are sucking out too much of the Web's value, acting as leeches on companies that create the very source materials the search engines index."

    Sure this might be partially true. But I would wager most of the web traffic that the "victim" sites get is from search engines. I have done a fair bit of traffic analysis for my company's web page (F50 company, sells computers, take a guess....) and I know even though we have a fairly decent interface, a good percentage of traffic still comes from g

  • by SmallFurryCreature ( 593017 ) on Wednesday January 18, 2006 @12:16PM (#14500128) Journal
    Apperently some companies spend all the profits on a sale on paying for pay per click advertising. Mmm, okay. Seems a bit odd to me but the net is an odd place.

    Next he claims that just when you are making money after you hyped your article with a massive advertising campaign your competitor will do the same because he doesn't want to loose forcing you to run an ad campaign again.

    Wow. How odd. Lucky nothing like that happens in the real world.

    Coca Cola has just the one ad campaign in the late 1900's (or is that 1800's) and has been coasting ever since.

    OF COURSE NOT Gee whiz. News flash, if you sell your product through paid advertising then you got to keep paying to advertise. More and more and more and every time there will be some new upstart who runs an ad campaign for a similar product forcing you to do it again.

    What the fuck do search engines got to do with it? This is just plain old advertising.

    No this fucktard has just learned that pay-per-click advertising has better statistics (you can actually tie the ad to the sale) and then used some magic math to prove that ad costs can sky rocket. Someone tell Intel. How much are they spending on that new logo again?

    But you can tell this guy is a nutjob. He seems to think that because software/service X is available for free this will stop competition. Gee, look at my tagline for two free editors. Now google for other text editors. How many do you find? Rounded to the nearest hundred.

    The bubble is over, there is no new economy, all the same old rules still apply. Oh and it says a lot about Jakob Nielsen that quality of your product doesn't seem to enter into equation. The only determining factor in how many people come to your site is how much you pay for ads and the only factor in how much you sell is your site.

    Eheh. Explain this to google please. Exactly where did google advertise? Thank you.

    Of course even an idiot gets some things right. Who here uses slashdot own search or uses google to search slashdot for old stories (oh and the third option for editors "Search old stories? What for?"). It is far easier to google with a question the find an answer site. Gamefaqs.com is about the only site I search directly.

    If you don't want people to search you via google then A disable google from indexing you or B improve your goddamn site so the fucking search works properly.

    Oh and if you don't like paying several dollar per google ad click, then don't. Word of mouth can work wonders if you are selling quality. There are plenty of companies that never advertise. They survive because they are the best and everyone knows it or they are so common people don't even think about it anymore. Anyone else. Welcome to the world of the ad agency sucking every last dollar out of you that they can. It is their way of making a living.

  • I call BS. I remember the days before good search engines (remember Webcrawler cira 1996?). It was near impossible to find what you were looking for in a reasonable amount of time.

    Without search engines most content on the internet wouldn't be seen by anyone.
  • In addition to paid search listings, websites also often receive search traffic from free, so-called organic listings. These visitors are obviously no problem, except that you can't count on them as a sustainable strategy, since organic listings can change without notice.

    So in his eyes there are two major ways to be discovered on the web -- paid listings (according to him: "search engines") and free listings (but these aren't reliable).

    And his problem is that competition inflates the prices they have to pay
  • by panda ( 10044 )
    Hmm, and here I was thinking that I'd actually add a little search box on my web site to search my site's content via Google.....

    Who's leeching whom?

  • Simple economics (Score:3, Insightful)

    by nonlnear ( 893672 ) on Wednesday January 18, 2006 @12:29PM (#14500246)
    The author of TFA is more than a little ignorant of simple economics.

    In the long run, every time companies increase the value of their online businesses, they end up handing over all that added value to the search engines. Any gain is temporary; once competing sites improve their profit-per-visitor enough to increase their search bids, they'll drive up everybody's cost of traffic.

    This is a simple fact of economics: There is no profit in a competitive market. (That is the economics definition of competitive - not the pedestrian definition.) The point is that you have to differentiate yourself from the competition in order to (successfully) charge a premium for your product - either through website improvement, or having a different product that you're selling.

    The fact that the proliferation of auction models has made many markets more competitive is a fabulous thing. If you draw the conclusion that the author should have drawn, it becomes ainfully clear: search engines make it harder to be a retail "squatter" and make money. (That is, to run a site that doesn't have any innovation in either site design or product.)

    There is one valid economic objection that the author could have made (but didn't). That is that the web advertising market is asymmetric. Google has a near monopoly (AFAIK), which allows it to extract (close to) the full consumer surplus for the ads it sells (the site makes $4 per visitor. Given these assumptions, the site can pay up to $3.99 for each click on its search engine ads...) This wouldn't be the case if there were substantial competition for Google (and I might honestly be wrong about the lack of competition - I just haven't heard of any).

    My point is that there might have been a substantial argument to be made about the search market, but if there was, the author failed to make it.

  • I don't know about anyone else, but I only use search engines to find the site that has what I am looking for. I don't go around typing random URLs in to try and find a site. I type what I am looking for into the search engine, and it responds with a list of sites that match my criteria and the context (usually) of the site. If the context I'm looking for isn't on the first page, I refine my search.
    You wouldn't do research in books looking only at the index (or even a library's card catalog system) wou
  • So, basically, what he's saying is that "Anything you do to increase profits or reduce expenses will be matched by your competitors and you will never be able to get a leg up on them." But, that's no surprise. In a competitive environment you are just not going to be able to get huge profits. But, that has nothing really to do with search engines or the electronic world at all.

    Increasing advertising is not always the best way of increasing revenue -- another way is to cut prices. If you s
  • by _LORAX_ ( 4790 ) on Wednesday January 18, 2006 @12:41PM (#14500370) Homepage
    I will probably never find your site... so go ahead and block search crawlers if you feel you are getting screwed.

    The plain fact of the matter is there is SO MUCH data on the itnernet as to make it nearly impossible for me to find your site by chance without search engines indexing and suggesting the content on a related search. I don't have time to go and independantly discover your site when looking for a topic or product, if it does not come up with a few google searches it effectivly does not exist and you get 0 revenue from me AT ALL.
  • One question: when did "search engine" get equated to "paid link placement"? The whole article seems to be predicated on the idea that the only way to get into search-engine listings is by paying for placement. If one doesn't pay for placement, the whole thesis of the article breaks down. I know I for one tend to avoid pay-for-placement search engines precisely because their results are based on payment, not relevance to me. The exception is Google, and even there I tend to look at the search results before

  • Without them you're nothing unless you have some other means of garnering interest such as an MMORPG.

    Community is fine for this...if you can find it. Community can be a bit myopic though.

  • to "leech" is to grab on forcefully with suckers and never let go.

    to "leach" is to wash out part of the substrate, as in "the acid rain leached the limestone until the hill crumbled."

    LEACH would appear to be the correct word if the substance of the linked report says that search engines are removing monetary value from the website. it is a neutral word.

    leech implies malice aforethought, as in "the leeches sucked the prize trout dry, and the annual catch of Ol' Bugeyes occurred no more on Swift Creek." if
  • I think what he's getting at is that businesses should hire usability experts rather than spend money on search engine advertising and optimization, obviously. It's a self-serving analysis.

  • This is BS -- that's Bell South for those of you with a memory retention shorter than yesterday's Slashdot articles -- all over again.

    BS claims that the content providers are getting a free ride over the BS broadband, and should pay for their transport costs. That was yesterday.

    Now the claim is that the indexing services are getting a free ride on the backs of the content providers, and making a fortune off of other people's efforts.

    Well I already pay for my broadband myself, and don't think any ISP

  • I agree with this post. I liken search engines to super markets who make a ton of money from charging PepsiCo for prime "shelf space" Essentially, this is what google and yahoo are doing. They are setting up prime "shelf space", ie that top of the list on the right hand side. They are setting up payment mechanisms (a super market check out stand), which of course they will take a small portion of. When I need to find stuff, I use google, sometimes those adds on the right help me. Just like when I want my
    • You also have to be aware that those Search engines only stay on top by being the best. If google starts doing what you suggest then MSNSearch or Yahoo will be more than happy to take their market share. The Internet is the closest thing to a pure "free market" economy we have. The product is information and the currency is our attention. If you forget what kind of economy you are in you'll fail, whether you're Google, or Microsoft.

      Google doesn't operate in a vacuum. No matter what you might think.
  • If you don't like search engines caching your content have a script that displays your content in two ways:

    Preview Content: mywebsite.com/preview/index.php?article=123544
    Display Content: mywebsite.com/display/index.php?article=123544
    Robots.txt: Don't look at my display folder

    Preview displays the title, a descriptive blurb, and a link to the full content. Display is the full article. Now you get the best of both worlds.
  • Evidently, this guy has never heard of robots.txt. Of course, that only applies to the SEs that actually use it...
  • Often when I am searching for certain information such as store hours or a phone number or address then this may save me a trip to the web site where the information resides. That would save bandwidth for that company while still providing customer service. That depends of course if the information I am getting is in context with what I am searching for. Often I will have to visit the site to make sure the search engine got the results that I wanted.

    That kind of search was for mostly static information, stu

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