Google: Master Of Closing The Loop?

I gave SEO Book’s Aaron Wall a big mention for his piece on trust
earlier this week,
but he’s got another post out now that deserves as much attention:
Google as the Invisible
Hand of the Online Economy. In it, he covers things such as how by being
everywhere, Google reinforces things for Google itself. It’s not necessarily a
new concept, but he freshens it up by looking at some recent moves. Check it
out, and I’ll share some of my own thoughts below on how Google continues to
"close the loop" and establish systems that reinforce its dominance. Could that
potentially set it up for an anti-trust move?

When AdSense rolled out back in 2003, I felt like Google was making the first
solid step toward closing the loop to keep it earning no matter where you go on
the web. As I wrote:

Ironically, while Google needs to move into contextual ads for
business reasons, the entry potentially may hurt the trust many users have
that Google will deliver them "unbiased" search results.

Of course, all search results are biased. Crawler-based search
engines naturally favor some types of content and dislike others. However,
Google’s results now may get accused of being slanted in hopes of making the
company money.

Google, widely acknowledged to handle more search requests
than any other competitor, now has a potential interest in routing people to
particular web sites. Ideally, Google wants to earn by paid links on its own
site. However, contextual ads give the company a second chance to earn, if the
first line of defense of ads on its own site fail. If Google ranks sites that
carry its ads higher than those without, Google could increase the odds of
earning this secondary income.

Some viewed AdSense as a weakness, that Google didn’t own enough
"billboards," as it were. Heck, it didn’t need to own them, just continue to
co-opt them. Again, as
I wrote
about this issue:

One such example is from The Register, where Andrew Orlowski

argues that Google needs Microsoft because it is too dependent on
advertising.

Google is indeed an advertising company. That’s because the search engine
business — and there is a search engine business — is largely a new
advertising medium. Some people search for information, but many are looking
to purchase products and services.

For this reason, when Overture made BusinessWeek’s Info Tech 100 list
earlier this year, I

wrote that both Overture and Google needed to be viewed as ad companies.
It’s also why I asked Google cofounder Sergey Brin how he’d classify Google
back in August. His

answer was that Google was still a tech company, but one where that
technology is linked to media.

Where Orlowski’s article is wrong is the idea that Google doesn’t own
enough billboards for its advertisements. Google’s web site is incredibly
popular, a giant billboard that it completely owns. It’s not a media agency
for its own site — it IS the media owner.

Getting "second chance" money off web billboards was just one way Google
closed the loop. Data mining is another. Before AdSense, we already had the
Google Toolbar, giving Google insight
into what millions were doing to surf the web. Later, Google
added
conversion
tracking (October 2003) to AdWords, then rolled out tools like
Google Analytics
(November 2005) and Google Web
Accelerator (May 2006). All of these have
sparked fears among
some that Google was again going to get too much insight into what’s happening
on the web.

I love Google Analytics, by the way. We use it here. So by no means am I
dissing the product or other ones I mention. But that product, along with
others, fuel concerns about Google continuing to close the loop, with the favor
being toward Google.

With all the things I’ve mentioned above — Google Toolbar, Google Analytics,
Web Accelerator, AdWords conversion tracking — Google had always made noises or
semi-reassurances that the data would somehow be "ring fenced" or not shared
with other departments. Especially with Google Toolbar, we were repeatedly told
it would not be used to find new web pages nor harnessed for ranking purposes.

Not everyone believed these statements about the various products, but at
least they were out there, reassuring for some. The launch of
Google Checkout last June was
different. Both Chris Sherman and I asked when briefed if conversion and
purchasing data would be restricted to only Google Checkout’s use rather than
for Google as a whole to use.

What I mean by this is that Google Checkout can see how well many sites are
now selling. So that information could be shared with Google AdWords, as a way
to increase minimum bids on a range of terms, if Google wanted. Or it could be
shared with the web search team, to try and determine which sites Google might
decide to trust more.

Would Google Checkout be restricted? No. Google didn’t know what exactly it
might do with the data, but it was exceedingly clear that there wouldn’t be any
of the "we won’t share" stuff we’d previously had. As Chris Sherman
wrote back
then:

This will surely raise concerns about what Google is doing with the data
it’s collecting, as it now has visibility into searcher buying behavior from
the first initial queries through the entire clickthrough and conversion
process.

Already, many search marketers avoid Google’s free analytics service
because they are unwilling to let Google capture data that can show conversion
rates, ROI and other cost and profitability metrics. But advertisers risk
losing position in search results to other advertisers who are using Checkout.

This will create a conundrum for some search marketers: Which is more
important—a high ranking ad or not allowing Google such a complete view of
your search-related business transactions?

It also raises the questions of whether Google will use this data to
potentially influence minimum bids for AdWords customers, or data-mine it for
other uses.

Kamangar says that the data collected is used solely to process payments at
this point, though he also declined to rule out other potential uses of the
information in the future. He stressed that Google would keep its data
collection and use policies transparent to both users and customers, however.

I have had relatively few "wow" moments in my years (11 of them, as of April
17) of writing about search. This was one of them. I repeated the question
several times, in various ways, to ensure that Google was clear. And it was. If
it found this data useful for something, it was going to use it however it
wanted, for whatever it wanted. Nothing would be ruled out. It was a dramatic
shift in attitude from a company I’d watched for so long.

That brings us back to Aaron’s piece. To summarize, he points out the ways
Google has changed things and either accidentally or overtly changed them in its
favor:

• Paid Links Bad, AdSense Links Good:
  Selling links
  is bad, because that harms the core search algorithm. But shoving Google
  AdSense links on pages you put into trusted domains to make money, pages that
  have nothing to do with your main editorial product, often seems to be fine.
   
• Google Is Everywhere: Even if Google makes it harder for
  made-for-AdSense sites to earn off Google traffic, they still can tap into the
  other search engines. Google fuels content pollution, which in turn can
  degrade other search engines yet earn it money.
   
• Double-Standards: Cloaking is bad, until you have your own tool
  that does what many would consider cloaking.
  Now it’s OK. Paid
  links are bad, unless you’re learning how to blend and hide and disguise
  Google’s own paid links.

Another close the loop strategy is that of
Google Personalized
Search. Google was exceptionally clear when talking with me and others about
it that that things that influence personalized search are what people put on
their Google Personalized Home Page or bookmark using Google Bookmarks. No
doubt, Google Reader subscriptions will get used in the future.

As a result, as Michael Gray

recently wrote about, many are leaping to install Add To Google buttons.
With so many buttons, people are becoming more selective about what they’ll
promote. If an Add To Google button = better chance of ranking (and it does),
then that’s a priority button for marketers to put on their sites. It’s a
brilliant move. It again sees Google harnessing pages across the web to be its
own billboards, closing the loop once again in its favor.

Is it far-fetched to think Google itself could be setting itself up for an
anti-trust action? If the web is now the operating system, and Google is seen by
many controlling the web, perhaps it will be forced to divest itself of certain
operations because of them effectively giving it a trust or monopoly.

It sounds like something out of Ask’s current
"information revolution"
ad campaign. It’s the kind of statement that usually gets me dissecting
claims and providing balance and perspective, as I did in my
14 "Is Google Evil?"
Tipping Points Since 2001 article from earlier this year. But stranger
things have happened. In addition, what I’ve learned over the years is there’s
rarely thoughtful perspective, when it comes to Google. The company is either
seen as a giant success, lovable with
fun snakes
occasionally getting lose, or it is seen as a giant threat that no one can stop.
And some of those threatened have powerful friends themselves.

Despite efforts to close the loop, Google is by no means guaranteed to
succeed. In particular, the continued growth by the company of taking so much on
might ultimately make it master of nothing — too much data drowning out either
the real important signals or just more focused attention to particular
products.