Twitter Worth $75 Million?

So it is, at least according to the Silicon Alley Insider (SAI) Digital Startup valuation model.

The folks at SAI admit they're working with a limited data set, given that these are private companies and aren't really required to disclose anything. But still, $75 Million for a company with $0 Million in revenue? I don't care what multiples you use, the math just doesn't work.

Some of the data out there indicates that we may be nearing the bursting point of the Web 2.0 Bubble. I remember (fondly) the heyday of the first internet-induced bubble, as I also remember (much-less-fondly) the swift decline. We can expect more of the same this time around - as VC starts to demand (the nerve!) a return on their investment and the seemingly never ending funnel of cash dries up.

Twitter better find themselves a revenue model quick.

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Jason Calacanis Does It Again

Once again, Jason Calacanis has enraged the SEO Community.

His keynote address at SMX Social Media, as reported by Lisa Barone, contained the following statement:

"SEO is a wasted industry. You're wasting your time fighting off ranking problems instead of creating great content. You're just spinning your wheels hoping the Google gods won't kick you out. It's a bad way to live your life. Using a human service is a better way to go about it."

It didn't take long for the blood to start boiling. It got picked up on Sphinn pretty quickly, with follow-up posts and Sphinn rants not far behind. Wow, is this industry sensitive or what? Here are some thoughts:

Make a Point, Please
If you read though all the posts and comments and replies, you'll find that the most thought out retort anybody has so far is that All Conferences Should Heretofore Ban Jason Calacanis from Speaking, Forever (and Ever). What's notably missing is a coherent argument against  Jason's position. To do this, you'd have to demonstrate that the skills and practices used by SEOs today have a long term value proposition to both clients and search engines alike. You'd have to further predict, convincingly, how search technology will evolve (or won't) and what the future for SEO is in the context of that evolution.

Jason's point is simple, and I agree with it, that current day SEO is largely an act of attempting to influence the (flawed) link-based page rank (and thus relevancy) algorithms in an attempt to achieve higher search engine rankings. As the link-based algorithms go the way of the do-do bird, the basics of SEO will be left behind and these basics will likely not require an entire independent industry to support them. I've had this argument myself with an SEO or two, and have yet to hear a compelling counter position.

Stop Being Suckers
Is it not evidently clear why Jason Calacanis makes statements like these in public forums? Despite their loathsome contempt for Mr. Calacanis, the SEO industry has just created a ton of press for him, his keynote address, and his current endeavor (Mahalo). The best part about all this is watching Jason reply to Sphinn comments, basically egging on the community, and they fall for it every time.  Jane Copland put it best when, on Sphinn, she said:

"There were two or three things he said that were either unfortunately worded or deliberately baity. No one's really paying much attention to anything else he said, but the grand total of about 100 words have made him the story of SMX Social Media. Calacanis wins."

Right now, the SEO Community looks like the rats that Jason the Pied Piper is leading around as he chooses - all for his own amusement and benefit.

Calacanis Wins.

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Onaswarm

Mashable published a review today of the latest Lifestreaming solution to hit the market - Onaswarm. The Mashable post gives a nice overview but left out one notable item. Unlike FriendFeed (whose Lifestreaming offering I've already commented on), Onaswarm is overt about their intent TO MAKE MONEY.

Early last week I offered some thoughts on how Twitter might turn a buck one day, and listed among those is the idea of contextualized affiliate links - so I was intrigued to see an Amazon affiliate banner, ripe with product links, at the bottom of the Onaswarm page. It will be interesting to watch how this plays out - that is, can they ever really get good contextualized product recommendations in the midst of a generalized, ever changing, content stream.

However it works out for them, it's refreshing to see a new company putting revenue generation high on the priority list.

Stumpedia Stalled?

A couple of weeks ago I posted about Stumpedia - a recent entry into the growing ranks of Human Powered Search engines. At the time, I wondered aloud about Stumpedia's value proposition. While honestly believe that real live people are the solution to the search relevancy issues we face today, Stumpedia seemed caught in a classic Catch 22. They're not crawling and rely on user link submission to build their index, but since the index is so sparse the results are poor (mostly non-existent) and thus there's little reason for anyone to adopt Stumpedia as a search service. But without users, how will they get links? You see where this is going.

Anyway, at the time I decided to start tracking the following (as reported on the Stumpedia home page):

• Registered Users
• Links
• Search Terms

A quick (and unattractive) excel graph shows the growth trend in all of these beginning to flat-line.

In addition to these slow growth trends, their company blog and forums have gone quiet. No posts to either in nearly two weeks. I hope they're off somewhere figuring out how they're going to bulk up their index, or they could be road-kill in the near future. I'll keep watching and report back.

Twitter Ads

Rumors were floating around today that Twitter was testing in-stream advertisements as a monetization trial. These same rumors were quickly squelched, but it certainly makes you think about where this new media darling's first buck will come from. Some possibilities:

Twitter Advertising
This is the most obvious of the potential solutions. Throw up some banner ads, or insert text / image ads directly into the Twitter stream and, viola, instant revenue. There's a problem with this approach, however, and that problem is targeting. The stream of data that runs across a user's page is far too disparate and non-contextualized to provide any meaningful basis for ad targeting. In a world where vertical ad networks are popping up all over the place and promising a highly identifiable audience to their advertisers, I have to wonder how much value Twitter ads will have. And without value, you can surely expect a low-grade of advertiser.

Twitter Affiliate Links
In the lead-gen, affiliate marketing space, there's an opportunity for Twitter to dynamically insert product / service links into the stream. For example, when a user is posting about watching Dexter Season 1 on DVD, the appropriate text could be turned into a link that would drive users to a point of purchase. This might be more effective from a click-thru and ROI perspective as it would keep the Twitter steam pure and, if implemented properly, provide meaningful contextual links.

Twitter Co-Brands / White Label Solutions
Really pushing the envelope on this one but with everybody and their mother wanting a social network these days, Twitter could offer a hosted micro-blogging solution either direct to client or via partnerships with some of the social media platforms (Ning, Small World Labs, etc., etc.,). Though, now that I've just typed that sentence, I realize that the Twitter API may render something like this of little value.

Twitter CPC
There are some interesting collaborative filtering offerings out there, and one company taking this to an interesting place is Loomia. Their SeenThis? product provides content recommendations based on a user's connections in Facebook (they're aiming to expand out to the other social platforms as well). A Loomia client can have links to their content displayed on Facebook profiles and then pay on a CPC basis anytime a user is delivered to their site. A similar implementation on Twitter could be very interesting and would be an innovative way to leverage (and monetize) the social graph.

These are just some ideas that popped into my head while reading the coverage today. I'd be interested to hear any other thoughts folks have on how Twitter can capitalize on the huge traction they currently have.

SEO Standards

There have been quite a few posts bouncing around the blogs about whether the SEO Industry needs standards. Arguments against standards seem to outnumber supporters, and those on the opposing side levy warnings of everything from reduced creativity and experimentation to bureaucracy laden government agencies whose inefficiencies will cripple the industry. SEOMoz posted a nice recap of recent writings on the subject and, as usual, threw in their own $0.02.

Many of the points made in favor of standards cite a need to protect clients from unethical, or simply unskilled, SEO service providers. Michael Martinez over at SEO-Theory even goes so far as to predict an increase in SEO Brokers and the need for these middle men to have a yard stick by which to measure the services they recommend or re-sell. The most compelling argument, however, for standards came from Lisa Barone. Within her post the most salient point is this:

"...search engine optimization is a form of advertising. It’s not a matter of should it be regulated, advertising MUST be regulated."

The need to protect clients from service providers simply doesn't warrant a set of industry standards. The fact is that the world economy is fueled by hundreds, if not thousands, of service provider types. If clients are not doing their homework and are incapable of properly evaluating service providers, then they run the risk paying too much, or getting cheated, at every turn - not just with SEO. The party at risk in this scenario, and why regulations (note I didn't say "standards," more about the difference a bit later in this post) are needed, is the consumer.

The primary benefit to a regulated advertising industry is to protect the consumer against false claims, not to protect Big Brand Co. from Sneaky Ad Firm LLC because they might not deliver a quality product. In the end, market forces (or lawsuits) will weed out those service providers that cannot effectively serve their clients. That's the way a market economy works. The consumer, however, has little recourse when they waste hours of their time clicking on search results that have nothing to do with what they're looking for. Sure, some of that will be incidental as the issue of relevancy gets worked out, but the door cannot be left open for wholesale manipulation of search results simply to drive traffic. That is an offense against the consumer and until SEO practices are covered by the same type of regulations we see in the advertising industry, these offenses will continue.

Finally, I want to be clear that I'm making a distinction between SEO Standards and SEO Regulations. Much of the coverage of this debate has referred to SEO Standards from the operational or certification standpoint. That is, standards being viewed as a means of determining if an SEO is capable and/or ethical in the service they provide. While we may see certifications gain popularity over time, I don't believe that the basics of SEO are complicated enough to warrant a certification standard. The only value a certification could have would be to validate competency and could not address the issue of ethical business practice. Again, as with any service provider, the purchasing client needs to understand enough about what their buying before finalizing the deal. Market forces will flush out the dregs.

Regulations would differ from operational standards in that, as with most regulated industries, they would exist as a means to shield the public from deceptive tactics. As an example, consider the FAA. As a regulating body overseeing the airline industry, their main concern is the safety of the flying public. Basically, the FAA exists to keep planes from crashing not to protect American Airlines bottom line from a shady parts manufacturer. Naturally, this type of regulation maintains service levels by enabling much stricter penalties in the case of a violation. The offending company is not just providing bad service to the client, they're impacting the public at large.

While SEO isn't a matter of life-and-death, neither is corporate advertising and the SEO industry needs to follow suit.

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Rushmore Drive

The Wall Street Journal is running a story on IAC's start-up strategy. Included in these is RushmoreDrive.com - a vertical search engine targeting the African American community. What's most interesting about RushmoreDrive is its demographic approach to a vertical search strategy as opposed to a content-centric approach. As such, it's easy to see how RushmoreDrive could easily evolve into a broader social media site - and you can even see social interaction elements on the site already.

Out of the box, it's nice to see RushmoreDrive allowing users to rank search results. As with any search engine, how they determine relevancy is a critical factor. For anybody who knows me, you know I'm an avid proponent of abandoning link-based page rank in favor of user response to search results. RushmoreDrive is using the Ask engine, but identical searches on the two sites yield different results pages. For example, a search for 'Baseball' on RushmoreDrive yields the following top 5:

The search on Ask.com returns Baseball-almanac.com, MLB.com, Baseball-reference.com, sabr.org (The Society for American Baseball Research), and baseball-links.com - in that order. Clearly RushmoreDrive is able to alter the default relevancy rankings returned by the Ask engine, and at first glance this seems to make sense. That is, for a search engine that markets itself to the African American community, prioritizing black history in a baseball query appears to be logical. What I'm unclear about is how well this type of search result reflects the user intent.

In my mind, a search for 'Baseball' is a generic search - no matter where it's submitted.  If RushmoreDrive were attempting to curate results and return only those believed to be of interest to its user base, that would make sense. But in this scenario, the same results returned by Ask.com are available, just pushed down the list a bit.

I'm on the fence on this one. Hopefully as the site gains some traction, the voting mechanism will catch on and the users will influence relevancy. It will be interesting to check back in a few months to see how these rankings may change.

G

I'm sorry, but I simply can't do it any longer. If I read another post where somebody refers to Google as 'G,' I may expire on the spot. So I'm making a formal request that you stop. All of you. And while you're at it, please stop using the following as well:

• Algo
• SERP
• Link Love
• Link Juice
• Mozzer

Listen, the SEO Industry doesn't need it's own vernacular to legitimize itself. It feels like an attempt to create a sense of establishment but it simply comes off as juvenile.

Again, I apologize in advance.

The Expanding Web

Michael Martinez over at SEO-Theory.com recently posted a thoughtful article which considers the rate of expansion of the web and questions whether search engine technology has maintained pace.

What’s refreshing about this post is where it differs from the typical SEO blog entry. So often, folks in the SEO industry start a blog in an attempt to create and nurture a personal brand. The unfortunate reality, though, is that there’s only so much SEO content to go around. Much of what gets written in the pursuit of SEO Identity is either rehashed SEO basics or a variation on The Ultimate List theme. None of this is very interesting and in the long run is counter productive to the desired goal.

I figure Mr. Martinez is after the same with his blog. However, his posts at least make me think and offer a critical perspective on the search industry. In his latest, there are a few points I agree with and a few I question.

Content Inclusion
In examining the completeness of a search engine’s index, Mr. Martinez states that in order to deal with limited capacity Google has implemented a “Web Apartheid.” That is, not all sites get indexed and Google determines which of the fortunate (relatively) few make it in.

In Google’s defense it should be noted that a huge number of spam sites have been dropped out of Google’s index, but when all is said and done Web spam is a legitimate part of the World Wide Web because neither Google nor any other search engine has the authority to determine what is and is not part of the Web.

This argument falls apart a bit when you consider that all search engines attempt to provide the searcher with “relevant” results. Whether you agree with how the engine determines relevancy or not, this implies a qualitative process. If we allow Google to determine which sites are relevant for a given query, we must also allow them to determine which sites are not relevant to any queries and thus be excluded.

Link Building
As a result of this Apartheid, Mr. Martinez states:

For the search optimization community, then, the primary challenge today is the same as it was ten years ago: we have to ensure that our protected content is included in as many search indexes as possible… The more inbound links a page has, the more likely the page will be crawled and indexed. Simply having a page crawled and indexed is the SEO’s first priority. Getting the page to rank is the SEO’s second priority.

The implication here is that significant link building is required in order to get your content indexed. With the exception of truly large sites (millions of pages), my experience has shown that getting content indexed is fairly straight forward. I’ve managed a number of content driven sites, all of which had new pages indexed immediately without any external inbound links. This includes new sites that were created and all it took was the submission of a sitemap to get pages indexed. Again, for significantly large sites I would expect the engines to take their time and index slowly as you prove your worth. I would be interested to hear an account of, say, your average blog owner who must go out and procure new inbound links before new posts get indexed.

Link Counting
I haven’t found too many instances of people who get paid to perform search engine optimization for their clients openly criticizing the link based page rank algorithm. I suppose it’s a case of not wanting to bite the hand that feeds, but Mr. Martinez bucks the trend and comes out against link counting – and on this point we agree completely. Mr. Martinez introduces the issue as

… gross error of judgment that has yet to be acknowledged by Google.

He further provides excellent background on the history of link based page rank.

Larry Page and Sergey Brin tested their PageRank hypothesis on the Stanford University Web site, where pages were not embedded with links designed to assist with crawling or commercial promotional links. Just because they were able to show that Stanford’s probable most important pages were better linked than other pages did not mean their model was relevant to the real World Wide Web. Google’s founders and investors failed to reconcile the wrong assumptions with reality.

This is evidence that the SEO industry is operating from a faulty premise. Mr. Martinez reiterates his point that aggressive link building was originally an attempt simply to get pages indexed and thus:

The valuative [sic] citation model that Page and Brin believed existed in fact never existed at all, except possibly on academic and government Web sites.

And finally:

The World Wide Web cannot be accurately valued through its linking structure because the linking structure was never designed to be a valuation process.

Excellent points, all well made. Not only is the link based model built upon an unsound foundation, the structure of our relevancy ecosystem is weakened each day as SEOs everywhere continue to try to use this flaw to influence natural search rankings for their clients.

There’s much more to Mr. Martinez’ post and I recommend you read it in its entirety. Unlike much of the line-towing that goes on in the SEO industry, this entry is notable for its thoughtfulness and consideration of how the status quo simply isn’t sufficient. The search optimization industry clearly needs to evolve and it won’t unless its practitioners ask the hard questions – both of themselves and the search engines.

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Stumpedia

On February 22, 2008, Stumpedia launched as another entry into the Human Powered Search Engine category. Stumpedia differs from Mahalo, however. Rather than paying staff to generate targeted search results pages, Stumpedia depends on the good will of the community to submit links and suggest relevant search terms for each.

SearchRank.com has published a nice overview of the Stumpedia service if you want to get acquainted with exactly how it works. In the end, it's very easy to use and intuitive to navigate. After playing with it for a while, here are some observations -

Human Powered Search
It's pretty clear to me that the holy grail of search lies beyond the algorithm. Any attempt at human powered search seems seems at first glance to be untenable. The sheer volume of information is overwhelming and it's daunting to consider the number of people required to perform the task. Mahalo's approach to employ staff around the country (globe?) to build hand-crafted search pages seems unmanageable in the long run, especially when you consider the rate at which new web content is produced. It's also hard to consider their pages 100% objective when they're produced by paid staff.

The potentially better solution is the path Stumpedia has taken - let the searchers themselves indicate which sites are relevant for given search terms. The risk in this model, that Mahalo avoids, is abuse. If Stumpedia starts to get any traction it will become a magnet for online marketers, spammers, and the like. At that point the quality of the search results become suspect unless Stumpedia can somehow keep the hordes at bay. Their stance on this is that they expect the community to be self-policing. How well this will work remains to be seen. They shouldn't lose site of the fact that a non-trivial portion of their user base will be marketers attempting to influence the results pages - and these folks tend to work together more often than rat each other out.

Google Indexed Search Results
I covered this point when looking at whether Mahalo fits Google's definition spam, but it's curious to see the Stumpedia search results pages being indexed by Google. For Stumpedia to be genuine in their attempt to become an alternative search engine, they should block the spiders from indexing their results pages. One search engine garnering traffic from another is simply a terrible user experience. Stumpedia should be able to stand on their own merits and attract a user base through the quality of their results.

Value Proposition
Stumpedia is in a bit of tricky situation at the moment. Since they rely on site visitors to submit links, they're going to depend heavily on content producers to join up and start adding their sites. Publishers will only do this, however, if there is a large enough user base such that they can expect a reasonable amount of return traffic. But currently there simply aren't enough links submitted to the site to make it useful for the searcher and so I expect adoption will be slow. So we have the publishers waiting on the searchers and the searchers waiting on the publishers. Stumpedia will likely need to lower the barrier for link submission (RSS?) to encourage publishers to jump on board. Right now, link submission is manual and I doubt major publishers will be keen to dedicate man-hours to submitting links individually.

There are some quirks I noticed while using Stumpedia, but I expect these will get flushed out as the service matures. I've submitted a few links as a test, to see what kind of traffic it generates. Stumpedia also displays the number of users, submitted links, and search terms directly on their home page. I've started to record those numbers and will check back a few times a week to track their progress.

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