According to Google, sponsored posts are just another form of paid links.

The legendary John Chow recently discovered that Google has decided to penalize blogs that are affiliated with PayPerPost, a popular paid posting service for bloggers, by reducing their PageRank to 0. Clearly, this is connected with Google's ongoing battle against paid links. While I am sympathetic towards Google's efforts to keep linking merit rather than profit-based, I must admit I am a little more saddened over the harsh penalties inflicted on bloggers in the PayPerPost network than I was at the PageRank reduction that some paid linkers experienced a few weeks ago. To begin with, this penalty is harsher -- all affected blogs seem to have lost all their PageRank altogether rather than just having their PageRank reduced. Secondly, I must admit I have a higher regard for IZEA, PayPerPost's parent company, than I ever had for Text Link Ads, the most prominent arbiter of paid links. PayPerPost has consistently provided opportunities for all kinds of bloggers, small and large, to make money by writing paid posts. While Text Link Ads paid links typically look a heck of a lot like any other link, PayPerPost posts are often immediately recognizable as paid posts even if they are not specifically identified as sponsored posts (why else would your favorite washing machine blog be talking about mortgages all of a sudden?!) and they can even be fun to read, depending on the creativity of the blogger involved. A lot of small-time bloggers (many of whom use Google's Blogger to host their blogs) are going to be hurt by this, in contrast to the previous paid links crackdown which affected a lot of blogging's fat cats.

At the end of the day, though, isn't a paid link a paid link? It's true that PayPerPost in practice led to a lot of blogs linking to a lot of sponsors merely because money had changed hands. While bloggers in the PayPerPost network can control what text is posted on their blog, Google the search engine is not smart enough to consider the context of a link in a blog post. It just sees the link, and it doesn't understand that some links aren't necessarily an indication of quality or popularity. I honestly think PayPerPost could survive even if paid posts all had no-follow links to sponsors because it is still worthwhile for the sponsors just to be mentioned in multiple blog posts -- paid posts are content which will be indexed in search engines, even if the links don't impart PageRank, and all the links can still drive traffic. For now, IZEA seems to be taking an uncompromising, unrepentant stance; they hope to continue "business as usual" without relying on Google PageRank at all. I'm not sure Project Goo-Gone is going to have Google shaking in their boots any time soon, but there are a lot of people who aren't feeling too thrilled with Google tonight.

It does pay to be a Live Search Club member.

Back in July, I posted about some of my early experiences with the Live Search Club. I was a bit too optimistic when I predicted I would receive my travel drive in September, but my prize finally did arrive a couple of weeks ago. Although it was a long wait, I have to say it was well worth it...the flash drive I received actually had a larger capacity than what I thought I was getting! Since that's the only prize I've redeemed so far, I have no idea if you always get more than you are expecting, but I'm rather keen to find out. X-Box 360, here I come!

The Live Search Club has surely had a few interesting months since my last post. I'm glad that Microsoft stuck by the project even as many people tried to actively hack the service so they could redeem tickets for prizes without actually playing the games. Indeed, it used to be that a web search for "Live Search Club" would mainly come up with discussions or descriptions of cheats! Many suspected cheaters have had nasty things happen to their tickets previously "won" and prizes redeemed; some of the penalized, naturally, claim to be innocent of all charges. The "rush" times for the Live Search Club may be over as Microsoft's crackdown on cheaters has dissuaded those eager for quick rewards, but the site continues to attract a more patient set of gamers, some of whom are quite contented to donate their winnings to charity. That's nice, most definitely, but I'm more of a prize guy myself.

From a corporate Microsoft point of view, the Live Search Club has principally been a vehicle to increase Live Search's profile and popularity. It has definitely done that; not only do the games themselves force Live Search searches, but the Live Search Club toolbar also encourages active use of Live Search. Additionally, the Live Search Club has been a great promoter of the Live brand in general; although Microsoft's web ambitions know no bounds, Live needs a few more killer products to establish itself as a true Internet giant. While Windows Live Club is no Hotmail, it's a really solid and entertaining site that will continue to be popular as long as Microsoft is willing to pay for the prizes.

Can giants shrink?

The mere act of listing the web properties of Yahoo!, Google, Amazon, and AOL would not be a trivial process. Those companies collectively have hundreds of fingers in hundreds of pies. Their audiences if anything expect these web giants to get only bigger, to continue creating and purchasing innovative new products. Sometimes, however, even an Atlas shrugs. What should a giant do if they find themselves providing a service which has not been as successful as they would like? Should they be cavalier in pulling the plug or prop up redundant and struggling sites indefinitely?

There are three reasons why I think giants should not allow themselves to shrink if they can possibly avoid it. First of all, the closure of any service pisses off happy users of that service, and even the "unsuccessful" services of a powerhouse like Yahoo! or Google often have thousands of users. Yahoo! may have thought Yahoo! Photos was no longer needed because of its acquisition of Flickr, but plenty of disgruntled users still think Yahoo! Photos was better. Secondly, closing sites creates distrust. For instance, there has been a steady stream of questions on Yahoo! Answers asking about whether Yahoo!'s new social networking offering, Mash, will replace Yahoo! 360, such as this one. This is not such a good thing -- the arrival of a new service shouldn't make existing users panic and ask, "Does that mean this old service that I use is going to go away?" Personally, I was really reluctant to start using Google Page Creator because of Google's killing of Google Answers...but Google, in my opinion, has done the right thing in keeping Google Video running alongside YouTube. Google Video is becoming more of a search engine for video than a video host, and it's still really useful. Thirdly, a shrinking giant creates opportunities for other competitors. For instance, many ex-Google Answers Researchers can now be found at Uclue, a paid answers service created after Google Answers was shut down.

I wouldn't argue that maintaining a costly service that shows no signs of generating profit is good business practice or makes good sense, but the costs of closing a service extend beyond the costs associated with maintaining the service. In general, I think the closing of any service should be approached very cautiously, and those services that users really, really care about (email or blog hosting, for instance) should probably NEVER be closed unless the provider is planning to quit the Internet. Closing Google Answers makes some sense to me; as a commercial service, it required both maintenance and promotion in order to be successful, but the majority of Web surfers seemed to prefer Yahoo! Answers' noncommercial and open version of an answers-type site. The closing of Yahoo! Photos doesn't make as much sense to me -- a little redundancy never hurts, especially in this case where people's personal pictures were the assets being played with by the web giant.

The paid links debate pits Google against enterprising webmasters.

Google has made it clear that it disapproves of paid links (see this post and this one too at Matt Cutts' blog for more details) because paid links undermine the usefulness of links as a measure of the worth of a web page. Once links become a widely traded commodity, search engines like Google which use links to rank web sites can no longer be said to effectively index the web -- they will merely rank sites according to the amounts their owners are willing to spend on them. Google's response has not been to ban offending web sites but simply to penalize them, and that seems fair to me. However, the webmaster response to Google's "crusade" has been very mixed, as one might well expect considering that many incomes are in jeopardy.

Although Google is concerned with the bonus the buyer of paid links receives, many webmasters are sellers rather than buyers of links. Writing a paid review might simply be a way for a small-time blogger to earn a few bucks and add some content to his site. Publishers who are thinking about signing up for Text Link Ads aren't likely to be motivated by the prospect of lowering the quality of Google's search index -- they're much more apt to have paying the bills next month on their minds. For such webmasters, paid links are a lot like advertising and affiliate links: a way to make money. Why, then, does Google insist that paid links should be treated so differently compared to the "acceptable" ways to make money online?

I think Google is correct to be concerned about the effect that paid links are having on PageRank. Google's main business is still search -- anything that threatens the usefulness of Google's search results is bad for Google, and, since most searchers use Google, bad for most web users as well. On the other hand, Google is also in the advertising business in a very big way, so companies like Text Link Ads are competing with AdSense for prime real estate on potentially millions of web pages. Google's crackdown on paid links could be perceived as an attempt to weaken a competitor -- indeed, the seemingly artificial difference between a text AdSense ad and a paid link sold through Text Link Ads supports such a conclusion. The difference IS deeper than it seems on the surface, though: AdSense ads aren't giving "link love" like Text Link Ads are.

Perhaps an unsatisfying compromise will eventually be made: paid links and paid reviews are fine by Google so long as they can be easily identified and ignored by search engines, such as through the use of the nofollow attribute. So, links can still be sold, but their benefit to the buyer will be much reduced. If this is strongly reflected in the price of the link offered to the seller, it may no longer be worthwhile from the average webmaster's point of view to sell links; it may be that only high traffic sites will be able to sell links for a decent price in the future.

Mgnet is a fascinating and frustrating experience.

Mgnet is a new service from AOL that provides a novel way to discover news, blogs, and other web content. Part of AOL's myAOL suite, Mgnet customizes what content it will display based on the user's past clicks. Its basic interface is essentially visual: you click on photographs which interest you and are led to related content, which you can rate to teach Mgnet what you like. There is something quite appealing about the randomness of this approach; part of the fun of surfing the Web stems from the realization that you really have no idea where you'll end up after an impulsive click or two! Mgnet, on the other hand, seems like it would be useless for focused searchers; if you already know what you're looking for, you don't really need Mgnet to guide you there...that's why AOL News exists!

I really like the concept of Mgnet, but I think it has quite a bit of growing up to do. Right now, it's still very possible to click an interesting photo and be led to totally irrelevant content. Case in point: I clicked on a music-related photo and got a whole bunch of results about Lotus Symphony, IBM's free OpenOffice based office suite, in lieu of anything about music. I don't think Mgnet knows me well enough yet to realize that I am, in fact, a total office software junkie who is interested in Lotus Symphony. Even if Mgnet is psychic, I still want to get music-related content when I click on a music-related photo. On the other hand, sometimes Mgnet works like a dream -- it's certainly not too shabby for a product that is still in beta. It's well worth a visit and I expect it to get much better in the future.

AdSense's new Allowed Sites feature is a step in the right direction.

In the past, it has been too easy for the unscrupulous to get their competitors or enemies banned from AdSense through such means as repeated clicking on ads. While I expect this problem to continue for some time, Google has introduced a new feature which will help AdSense publishers protect themselves. Publishers can now at their option specify which domains or subdomains they wish to allow ads to appear on; although the ads may be displayed on sites which are not on the allowed sites list, no impressions or clicks will be counted for those ads. This prevents two possible situations that could lead potentially to trouble: competitors or enemies will no longer be able to steal someone's AdSense code and plaster AdSense ads on sites which violate the AdSense terms of service, and people who mistakenly put in an incorrect code when placing ads on a site that violates the terms of service will also no longer get innocent people into trouble. Truthfully, neither situation happens all that often...but both do happen sometimes so it is good that Google has addressed this issue. Hopefully, getting incorrectly banned from AdSense will be the least of the worries facing web publishers in the future.

Is using the Allowed Sites feature a good idea for everyone? I've begun using it myself, but there is one issue all publishers should be aware of before they create their own Allowed Sites list. Archival sites which cache old versions of pages, such as archive.org and various search engines, will no longer generate revenue for you from those cached pages unless you also add those sites to the Allowed Sites list. You'll have to do that manually at the moment. I would hazard a guess that most people make next to nothing from impressions on cached versions of their sites, but those that do might be better off if they avoided the allowed sites feature for now.