Stuck in Google’s Doghouse from the New York Times profiles the story of Dan Savage’s Sourcetool.com and how it was hit by Google’s AdWords quality score algorithm.

The article discusses the practice of arbitrageur in the search ad game. Savage used AdWords to drive traffic to Sourcetool.com and then monetized that traffic through AdSense. The problem was, when Google introduced their landing page quality score. An update directly impacted Savage’s minimum bids for his AdWords campaign, which drove up the price of his ads, and made it impossible for him to make money on his site.

Now, Dan was paying $1 or $5 or $10 for ads that once cost him $0.01. He was being paid by Google about 10 cents for each click a user made on his ads on his site. But when Google increased his minimum bids, he was no longer able to make the 5 cent profit, per click, that he once was able to make.

Google told Savage that his landing pages were “low quality,” and that was the reason for his bid increase. But this is the same site that was featured as the “AdSense site of the week,” the New York Times reported. So how can a site that is featured as quality, be deemed to not be quality by an algorithm?

Savage believes this is due to Google feeling his site is competitive to Google.

Google, he believed, didn’t like his Web directory because it was a search engine itself — though much more narrowly focused than Google’s search engine — and Google found it a competitive threat.

What’s more, Sourcetool competed directly with business.com, which was one of Google’s “content network partners,” meaning it gets additional advertising revenue because Google directs AdWords ads to the site as well as AdSense ads.

I doubt Dan Savage will win his case here, but he was able to get his site and the issue in the spotlight. Advertisers have been complaining and hurt by Google’s quality score for a long time now. Google says they want the best paid and free search results in their index. Is Google anti-competitive? Is Google greedy? Or is Google really looking after quality?

Related Topics: Google: AdSense | Google: AdWords | Google: Legal

About The Author: Barry Schwartz is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here. For more background information on Barry, see his full bio over here. See more articles by Barry Schwartz