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Beware Big ‘Net

Users of the internet are supposed to be used to change, but like any chaotic system it has its bounds.  Recent developments at two large ‘net companies, google and facebook, have done more than feed the usual chatter – and may be significant developments in the evolution of how we connect.

What is clear, however, is that they have demonstrated that complete reliance on one big company is dangerous for users, advertisers, and internet businesses alike.

The first big changes came at facebook, which announced that they were going to start sharing addresses and phone numbers with third parties.  It was something they attempted to do quietly, to developers, without announcing a major policy change to their millions of global users.  It was the sneakiness of it that got attention as far away as Congress and may be starting a major backlash, once again, for the largest social media company.

Why did they do this?  Right now, everything facebook does has to be seen as part of their planned IPO with Goldman-Sachs.  Generating revenue that justifies a valuation up to $60 Billion is going to be difficult, so the whiff of desperation that came with their new policy is probably only a sample of what is to come.

There is nothing new to this, however.  The financial bubble that eventually tripped into housing can be traced easily by the career of one man, Bill Miller, who beat the S&P for 16 years in a row while managing funds at Legg-Mason.  He started out by scoring big with AOL, another huge one-stop shop that offered the ‘net in one convenient package, just like facebook.  Miller went on to promote amazon, and when the ‘net bubble popped he went to Centex (big condo builder) and WaMu (mortgage backed securities).

When you read about facebook you should read this as nothing more than Goldman-Sachs trying to get the same party started all over again and nothing more.  What happens to facebook after Goldman has sold off their IPO is immaterial, meaning they could easily go the way of AOL.  Their cavalier attitude with privacy issues tells me they can and should go away, too.

On the surface, google’s big “farmer update” is related only because it comes at the same time.  As many of us have said for a long time, there is no substitute for quality content on the internet.  Yet there is a huge industry that does little more than SEO, search engine optimization, in an effort to goose google – with highly varying quality.  After years of tolerance google pushed through the first wave of major reform.  Many great articles have been written about the effects, which I’ll summarize.

No one knows exactly how the more than 200 factors claimed by google feed into their search results.  It’s something like the “secret formula” for Cocoa-Cola, but with one major difference – many people make a living by claiming to know the secret.  It’s the interaction which makes it different, as with everything on the ‘net.

What seems to have happened is that the core of the search engine, based on incoming links, has not changed significantly.  There does appear to be a greater reliance on other factors, most likely the data collected from google users as to which sites they selected most when shown a snippet of content and possibly even how many “stars”, or nods of approval, users gave a site.  Another possibility is that google is relying more on “authority”, or the presence of related words to the one being searched for, in order to weed out the most obvious cheaters who just pile on the keywords.

Whatever the exact change was we can be sure of one thing – there will be more.  Some of the sites that saw their results drop are very angry and want Congress to intervene, claiming that google is an unfair monopoly.  But google got where they are by providing useful results and they cannot let that quality suffer for the benefit of the SEO industry.

Once again, there is no substitute for quality.  Incidentally, Barataria’s search engine performance has dramatically increased.

The stories of facebook and google come together when we try to think of a lesson to take away from each of them.  Both cases have one big lesson for businesses and users alike when it comes to the ‘net – reliance on one big company is dangerous at best.

Does this mean things are at a key inflection point, a major change coming through the ‘net itself?  Both of these stories are very much about business as usual, which is to say that for all the chatter nothing has changed at all – we’ve just had a few fundamental lessons made pretty obvious.  The chaos is, as always, well bounded.

8 thoughts on “Beware Big ‘Net

  1. You are totally right that the facebook push is nothing more than trying to get the party started again. You would think they would try something different this time around but I guess not. There is no way that facebook is worth what they are saying and I think they know it too.

    I wasn’t aware of the changes at google but I can see how this might be huge for some people. I never did understand all this stuff because it gets way too technical for me. But it does seem strange to have a business totally tied to some secret recipe that can change at a moments notice.

  2. Jim, it’s not anything worth worrying about too much as a user. I wanted to write a fairly mainstream piece about it because, strangely, big media has yet to really take this one on. When they do, they often get bogged down on the word “algorithm” and feel they have to explain it – I just punted that out and said “system”.

    People make this way more complicated than it should be – in the media, as users, and as site promoters. I say it far too often for my taste but apparently it has to be said again – “Write for people, edit for SEO”. I can add, “and be done with it!”

  3. Facebook scares me sometimes. It has so much personal data and they go and do these kinds of things with it like they own all my information. Well, I’m not giving them any more information than I have to!

    I do hope Congress looks into this because someone has to keep an eye on what they are doing. It’s not right to do this with personal information when there are so many identity thefts around.

  4. People get really worked up about this stuff but I don’t see how it really matters. I know some spammers claim they make big money off of google and all that but I think they are lying. It seems like one ginormous scam to me.

  5. I think the issue here is not whether or not we use Facebook or the other tools, but what information we put out there for the world to see. My goal is just to keep educating people about that very thing. You don’t have to fill in every box they give you. Skip the stuff you don’t want getting into the wrong hands. There are lots and lots and lots of people who just blindly fill in the boxes and then don’t know how/if it’s being use.

  6. Anna, see what Gini had to say (thanks!). Facebook does not have my city of birth or the names of my parents (esp mother’s maiden name!). They don’t have anything more than a phone book would have. Granted, they are gathering info on what I might click on while there, revealing my interests, but that may not be a huge problem.

    Then again, the yahoo! email account I’ve been loyal to for 20 years was just over-run with spam and had to be abandoned – and that’s the one facebook knows about, so there is a chance that they are related. I’ll call it coincidence for now, but I think just being super careful with especially sensitive things is good enough. I do worry that they are feeding spammers with email addys and I’ll let you know if I find out that’s the case.

    Dale, it’s not all a scam – a well written article should have the keywords present and I don’t think that’s a big deal. But it can easily be over-stated and often is. That’s why google is changing their system to stay ahead – sort of like constantly updating the rulebook for a sport to stay ahead of people who push things as hard as they can. In search engines and in sports there is never any real substitute for solid fundamentals, tho!

  7. I don’t worry much about SEO, after all…content is king…right? And see, because my content is happily exactly as advertised: “Cheesy Fiction,” I have no problems with SEO. There are other places one may find public information on almost anyone: the various genealogy sites and in Minnesota, the Minnesota Historical Society. DOB, mother’s maiden name, marriage, divorce, residence; all are fairly easily available.

  8. I did not hear about these changes at facebook. They were in trouble for this before, right? Sounds like they do not care.

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