Internet Marketing Blog by Noon-an-Night

Interestingly, after I made my post yesterday about mobile and comScore understanding the importance of it, I came across another article today that centered around users’ mobile browsing activities.

The article was published by BusinessWeek and titled Welcome to Weekend Web. The article presented some interesting information directly from Google about the difference between users’ browsing patterns on weekdays and weekends:

“At Google, we see the majority of our desktop traffic [in the U.S.] during weekdays,” says Matt Waddell, chief of staff for Google Mobile. “On mobile, the situation is completely reversed.” Mobile browsing surged 89% in the past year, with mobile page views increasing by 127%, according to researcher M:Metrics. The increase reflects growing availability of all-you-can eat data plans and increasingly sophisticated handheld devices such as the Apple iPhone.

Another interesting point (all the data in the article was provided by M:Metrics, the company acquired by comScore) is that the top two sites visited by mobile users during the weekend are Craigslist and eBay. The Weather Channel and MapQuest also rank in the top ten. The reason this is particularly interesting is that these sites only rank (respectively) 9, 8, 26 and 35 during the week for users visiting the internet from a computer. Because of these variations, many major companies (such as eBay) are looking at ways to enhance their users’ mobile experience.

To really put things in perspective, just consider this quote from Google’s CEO Eric Schmidt:

mobile will be a larger business than the PC Web.

In addition to online video, one of the other things that I am extremely bullish on is mobile. While many people use the term mobile web instead of mobile, I think using the first term misses the entire point of mobile: there’s not going to be any distinction between the web and the “mobile web“. For example, with the exception of Flash, I can already access the entire internet in its original form via my iPhone.

In an acquisition that demonstrates the value many companies see in the mobile landscape, TechCrunch announced yesterday that comScore is purchasing M:Metrics. According to CrunchBase, M:Metrics is “a leader in mobile media measurement. They can track mobile visitors, pageviews, ads clicked and more.”

comScore is making the purchase for $44.3 million, in addition to 50,000 options of comScore stock.

As a result of the deal, comScore will acquire all three of M:Metrics’ major products:

MobiLens, a syndicated monthly online survey that captures overall mobile phone usage, including device information, data usage, media consumption and demographic characteristics of a representative sample of more than 40,000 mobile device users. MobiLens is available in the U.S., U.K., Germany, France, Spain, and Italy.

MeterDirect, the industry’s first on-device meter that passively measures the mobile Internet behavior and media consumption of more than 4,000 existing Smartphone panelists. The M:Metrics metering technology is compatible with more than 280 device models. MeterDirect is currently available in the U.S. and U.K.

M:Ad, the first competitive tracking service for mobile advertising that continuously monitors clickable display advertising from a broad representative set of mobile Web destinations to reveal leading advertisers across a variety of market segments. M:Ad is currently available in the U.S. and U.K.

With the ability to now comprehensively track mobile activity, comScore should have no problem remaining one of the dominant sources for information about users’ internet activities and trends.

Since I’ve spent the last two days talking about general topics related to Web 2.0, I thought it would be a good idea to focus on a search specific topic today.

Over at Search Engine Land, Danny Sullivan posted a fairly lengthy column today which is titled “Search 4.0: Putting Humans Back In Search.” Although he does mention Mahalo and Wikia, his column is far from being a plug for these new “search engines.” Instead, he focuses on how humans and the data they produce have started to influence search engines, and how the importance of the human element will continue to grow over time.

According to Danny, search has gone through three major (generalized) phases: on-page ranking (~1996), off-page ranking (~1998) and blended results (~2007). Following this evolution, he feels that integrating human review and personalization will be the next method for search engines to provide their users with the best results possible.

Although it’s been continuously hyped by bloggers, one point that he touched on that I strongly agree with is that social search isn’t going to kill Google (or any major search engine for that matter). In case you’re not familiar with the term social search, it’s the idea “that because Facebook knows who your friends are, they’ll be able to apply that “social graph” data to improving search results.” While this sounds great, other companies have tried it in the past and it simply hasn’t worked.

As I mentioned in the opening of the post, Danny does mention Mahalo and Wikia. While he states that they do have the ability to produce better search results than machines in certain situations, he also lists several limitations of a search engine powdered solely by humans:

• Ability to Scale
• Maintaining Pages
• Becoming a Destination Instead of a Resource
• Too Much Information on a Page

So, while you won’t be seeing a product like ChaCha making Google irrelevant anytime soon, you can count on higher levels of personalization during your search activities, humans reviewing more sets of search results to ensure their relevancy and search engines refining the results they display by looking at your previous searching trends.

The screen shot above, which shows the front page of Techmeme, is a discussion that’s related to yesterday’s post about the shortcomings of online advertising.

As the screen shot shows, there is a wide variety of discussion on the topic of the most Web 2.0 companies’ lack of revenue. However, the main points of the conversation can be found in the first article from FT.com:

Many members of the Web 2.0 generation of internet companies have so far produced little in the way of revenue.

The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers.

It seems that most companies have too quickly forgotten the lessons of the original internet bubble. According to the Wikipedia article on the dot-com bubble:

According to dot-com theory, an Internet company’s survival depended on expanding its customer base as rapidly as possible, even if it produced large annual losses.

Sound familiar?! Except now, people aren’t even customers: they’re just users of a free service.

Although I’m personally a fan of the service, Twitter is the poster child for a company that has raised a ton of money without being able to generate any revenue. I’ll continue using the service as long as its free, but they would need to add more value for me to actually pay to use their service.

I think as the Web 2.0 phase continues to become even more ridiculous, people are going to realize the true value of real internet services, such as search engine marketing, which can help companies with an actual product or service increase their revenue.

By know, we are all very familiar with the path that “successful” Web 2.0 startups are supposed to follow:

1. Come up with an idea that allows users to interact with a website and each other
2. Pick a name that is either made up or misspelled
3. Get on TechCrunch
4. Attract a large amount of users
5. Slap as much advertising on your website as possible and start waiting for the revenue to roll-in

The main point of this cycle is that it’s literally become a sin for companies, god forbid, to actually charge their users for access to their service. Because of this, Web 2.0 companies have no choice but to rely on advertising dollars to build their fortunes.

The problem with this is that outside of search advertising, online advertising simply isn’t that effective. As Alexander van Elsas said earlier today:

What I just don’t get is why we keep this dreaded web 2.0 free but ads based business model alive. It’s probably the biggest advertisement scam on-line. Over $ 16 Bln is spent on-line trough advertisement networks and there isn’t a single user interested in them. There have been a few reports of on-line advertisement boosting off-line sales, but I doubt the numbers are that positive across the web. It is pretty amazing that web entrepreneurs and investors have the balls to stuff $16 Bln in harassment down the throats of the user.

Why is online advertising not working (outside of search)? Scott Karp summed it up very well in a few short statements:

Search advertising, because it is relevant to what users are already searching for, creates enormous value. But the search advertising is largely about helping people buy what they already know they want.

What about the objective of advertising to convince people to buy things they don’t yet know they want or need (or what never otherwise want or need)?

Online advertising must create value for users or it will create little or no value for advertisers.

So, what’s the future of online advertising? In addition to search advertising (which will continue to evolve), online advertising is going to need to evolve into some form of a CPA (cost per acquisition) model. The new model will not only need to provide value to users, but also give advertisers a way to spend their budgets effectively.

When this happens, companies making their revenue off of selling ads will without see a drop in their revenue. However, over time, because of the accountability that a CPA based model will create, this will create a much more sustainable market in the long-run. I believe the main reason that this hasn’t happened sooner is there is still enough money floating around for company’s to keep taking dollars from advertisers for standard online advertising, without having to deal with all the complexities that accompany a CPA based model. When advertisers eventually stop paying, online advertising will have no choice but to evolve and move forward.

Earlier this week, I told you about Microsoft’s new search initiative to bribe its users. Now, less than a week later, Microsoft has already announced another major search change.

Today, they announced that they will be closing Live Search Books (and Academic) within a week. According to their official post:

Today we informed our partners that we are ending the Live Search Books and Live Search Academic projects and that both sites will be taken down next week. Books and scholarly publications will continue to be integrated into our Search results, but not through separate indexes.

This also means that we are winding down our digitization initiatives, including our library scanning and our in-copyright book programs. We recognize that this decision comes as disappointing news to our partners, the publishing and academic communities, and Live Search users.

According to a post by Danny Sullivan, this news actually comes as quite a surprise:

Wow. Earlier this month, I heard Microsoft execs highlight Live Search Books as a key advance they were doing in search. Today, news that the site along with Live Search Academic are being closed next week, since they lack the “high consumer intent” that Microsoft is now focusing on. So much for trying to seem like the much-needed “good” alternative to Google.

As with Danny, most experts are criticizing Microsoft for scrapping this project simply for the reason that it “lacked high consumer intent.” Previously, Microsoft had won praise for working with the Open Content Alliance to create a book search that didn’t infringe on author’s copyrights (unlike Google, who’s still running Book Search has been embroiled in controversy).

With one major change after another, it seems that Microsoft is putting all their resources into attacking Google head-on. While this could have positive results for them, if they fail to gain any traction, it will prove that Google is truly an unstoppable force.

On Tuesday, Udi Maber (Google’s VP of Engineering) made a post on the Official Google Blog: Introduction to Google Search Quality.

While you have to take posts like this in stride (given that it is posted on their corporate blog), it still provided some interesting information and insights. As Maber explains, the post was an attempt to provide the general public with more information about how Google actually works: “For something that is used so often by so many people, surprisingly little is known about ranking at Google. This is entirely our fault, and it is by design.” He goes on to explain that the reason for this is to protect Google not only from it competitors, but also from people who could abuse the system.

Since the post is rather lengthy, it may be helpful to browse the list of bullet points below. Barry Schwartz pulled out the key points of the post, and I picked out the key items from his summary:

-PageRank is still used in the algorithm, but not as much as it once was.

-All new algorithmic ideas are tested “thoroughly” by a team of statisticians reviewing tons of data.

-In January, Google released a major update to the PageRank algorithm

As I stated above, while posts like this don’t give away the golden key to Google’s coveted algorithm, as someone involved in internet marketing, it’s still important for you to keep up with the announcements and discussions Google makes. You never know when one sentence they write could cause a light bulb to go off in your head!

What’s a struggling search engine to do when all of their other efforts to attract users have not gone as planned? Simple: pay people to use your service.

Today, Microsoft announced that they are launching a program called cashback. So, what exactly is cashback? According to its about page:

Microsoft Live Search cashback is “The Search That Pays You Back”. Find great deals on millions of products from hundreds of brand name stores that you know and trust. You will be able to earn cashback savings based on a percentage of the product price. Your savings will be paid to you via your choice of a deposit to your PayPal account, direct deposit to your bank account, or a check in the mail. It’s that simple!

In a nutshell, the system is based on CPA. Advertisers participate in the program, and instead of paying for clicks or impressions, only pay when a purchase is made. Instead of keeping the advertiser’s payment as revenue, Microsoft passes it on to the consumer.

SEL has a lot of coverage of cashback. Some of their best observations and points were:

I totally can see an average person having a lot of difficulty in trusting they will get back the money and also in setting up their cashback account with Windows Live. Other then that, I personally feel this won’t do much, in the long term, to improve Microsoft’s search share.

In hopes of saving money, I’m wasting a lot of time and getting a bad impression of a search site that wants to woo me. Oh, and not saving money either.

So, what is the tech savvy crowd saying about cashback? Just ask Summize:

“Why doesnt MS live search cashback have an affiliate program?”

“Whoah: Microsoft Cashback Google-Killer Generates NO Revenue For Microsoft”

“Mmm…Step 1. Buy a product on Live Search cashback ($)/Step 2. Sell it at listprice on ebay-craigslist/Step 3. Rinse+repeat/Step 4. Profit!”

“I want to try out Microsoft Cashback to buy Apple products. Or maybe Enterprise Linux solutions.”

“Microsoft Live Search cashback seems like something I really don’t care about, but is buzzing today.”

Overall, it doesn’t seem like the Twitter masses are overly confident of this program’s success, but only time will tell whether it can help Microsoft gain any sort of traction against Google.

Earlier today, CNET published Nielsen’s data for April 2008 about social networks. Normally, these numbers basically reveal the same things every month, but there were some interesting trends that emerged from this set.

As you can see from the chart above, it seems that MySpace may have reached its critical mass. Although they’re still twice as big as Facebook, they’re only experiencing a fraction of the growth that Facebook is. If their rate of growth stays at the same level (or declines even more), Facebook may have a realistically chance at significantly closing the gap between them.

Another interesting data point is Club Penguin. In case you’re not familiar with Club Penguin, it’s a social network aimed at kids: “Using cartoon penguins as avatars, players waddle around, chat, play minigames, and participate in other activities with one another in a snow-covered virtual world.” It was acquired by Disney last year for $350 million. However, as the data shows, it’s having a hard time achieving any additional growth. The reason? As one commenter noted:

Club Penguin growth static? Of course it is, you have to PAY a Monthly Fee to enjoy half of it’s features! In today’s economy you think I want to PAY a Monthly Fee so my daughter can buy virtual clothes for a little penguin avatar?? Come on! She can visit half a dozen sites where she can do that, no charge! Charge money for WOW, leave the kiddie sites for free. Throw in an advertisement here and there to make up for it.

Finally, the last data point worth mentioning is LinkedIn. Although many people have thought that LinkedIn wouldn’t succeed, it’s still seeing an extremely high rate of growth. This is very good news for LinkedIn, since they may be in the process of looking for a billion dollar valuation.

Back in February, I told you about Google Health, the internet giant’s latest venture. Google Health is launching, and as you can easily see on Twitter, people are buzzing with mixed reactions about this feature from the Big G:

“Creeped out by Google heath; way too much information for one company”

“Am I the only one who likes the idea of Google Health (and that MS Vault health thing too) but doesn’t like the fact that it’s Google?”

“Just read about (and began testing) Google Health. I’m blowing into my USB drive and I think it will tell me if I have diphtheria.”

“Even a “super hardened server” isn’t safe enough for me. Prediction: Google Health will bomb.”

“trying Google Health. Mom should like this.”

(from Search Engine Land)

TechCrunch provided some details about this new program, including:

“The big competition here is between Google Health and Microsoft’s HealthVault.”

“To gain consumer acceptance, Google promises never to advertise on Google Health (although ads in related searches should be fair game) and that people’s personal health information will never appear in search results (one would hope not).”

“But the key is importing your medical record in there. That is going to be a huge hurdle in terms of people feeling comfortable giving that sort of data to Google in the first place, and then simply getting the data in an electronic form from their doctors.”

Of all the commentary I’ve seen about Google Health, the most interesting (and useful for internet marketers) came from Andy Beard.

When Andy was playing around with G. Health, he added Chondromalacia Patella (Runner’s Knee) to his list of ailments. After doing this, he noticed where the potential for internet marketers could be:

As you can see, if you were trying to create a niche health site or PPC campaign, this would be an easy way to come up with ideas for additional, relevant content.