The Downside

How do you manage a business when the very thing that makes money for you hurts your profits at the same time? This is the dilemma that Google has been struggling with several years now, and it’s not likely to go away soon.

Imagine if you will that you are a content publisher, say, an online magazine. Now imagine that you have your “A” articles that your writers spent a lot of time on and that are very in-depth, and that your readers love. Now imagine that you have your “C” articles that aren’t so good, but because they suck, your readers are much more likely to click on the ads on those articles. Believe it or not, if a page has lousy content, users are indeed much more likely to click on an ad. I’ve seen seen sites with lousy content get up to a 12% clickthrough as compared to high-quality content that gets 1-2% CTR.

Now imagine that you get paid per click.

Which articles would you promote at the front of your magazine? A article or C articles? The A’s are great, but they just don’t pay the bills, let alone pay for themselves. The C’s pay well, but get no repeat traffic.This is exactly the paradox that Google faces every day. They can send their users to quality sites with great articles like Creating Passionate Users or uncov, or they can send traffic to sites with questionable content where users are more likely to click on ads because there’s nothing else to do like Associated Content or Squidoo.

Google runs their AdSense ads on virtually every content site on the web these days, so they make money when they send their traffic to the sites that have the best clickthrough rates.

So what is Google to do? They should certainly try to avoid any perception of impropriety. Apparently they’ve started penalizing pages on Squidoo in order to do just that. But going forward, how do they draw the line? How do they look impartial? How do they assure us that the brick wall between editorial (in their case, search) and sales that every good publisher must have is still in place? How do we know that they’re sending us to the best sites and not the ones that make the most money for them?

The answer is, we probably won’t know until someone starts giving better search results than Google.

This entry was posted on Wednesday, July 11th, 2007 at 11:14 pm and is filed under Internet, Search. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site. Your comments will appear immediately, but I reserve the right to delete innapropriate comments.