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Google has been showing really bizarre results today. Just when I start to think Google is coming back to some sense of normal I see a client report or conduct a random search that shows that Google has not gotten back to normal. Before the recent Florida Update, I could be reasonably sure that if a site was in the Top10 at Lycos or Alta Vista, it was almost certainly Top10 at Google. Today, that is not the case, or at least not all of the time.

Ross noticed something interesting a few minutes ago. Google does not seem to be measuring back-links in any noticable way. Ross re-worked an optimization effort for one of his clients’ sites last week on the assumption that really strong SEO would beat sites with high link-densities and suddenly, the site is in the #2 spot on Google after being dropped during the Florida Update. We are attempting the same practice on another couple of sites (with client permission of course) in the hopes that our assumption is correct. With Google spidering and re-spidering like mad these days, we hope to see results withing three or four days.

Major retraction and apologies folks… I just got off the phone with Google’s Communications Director, David Krane. It seems that the rumours of Google’s pending IPO have been greatly exaggerated by hundreds of writers, including myself, who are following Google. The story, which first broke in the Wall Street Journal Digest last Friday, has developed long legs and has been reported in most major business journals around the world. After reading literally dozens of articles and analysis, we decided to run with it too. Sometimes running with what appears to be the real story can be like running with scissors, a rather dangerous thing to do. It would seem I stumbled.

Here’s the story as we see it today. Google has NOT made a formal announcement regarding the issuance of an IPO. I made a foolish mistake in reporting this based on articles from several sources, all of which named “unnamed sources” as their informants. Google has been in talks with several investment banks, several of which are jockeying for position on floating the IPO. This was reported in Tuesday’s Oakland Tribune and Seattle Post-Intelligencer, to name a few. When issued, it will likely be in the $15-25Billion range, as reported here and in most other publications.

I believe the analysis in my article to be, for the most part accurate, assuming Google does issue their long-expected IPO. Several people I’ve spoken with today still believe that a formal announcement is imminent however; Google’s communications department has refused comment on the issue.

Google announced it will make its first Initial Public Offering (IPO) of shares last Friday. The IPO, which is slated to be issued in late February or early March marks a major turning point in Google’s history and will likely cause changes at Google as shareholder demands will become part of Google’s operating strategies. Google has been privately owned since its inception in a Stanford University dorm just over 5 years ago. In the past 5 years, Google has grown into the largest and most used search tool on the Internet and is considered the largest catalogue of information in human history, akin to the world’s greatest librarian. It is also considered a money-making machine with rumored profits of upwards of $700Million last year based on estimated annual revenues exceeding $2.5Billion. The total IPO is valued between $15Billion and $25Billion.

One of the most interesting facets to this story is the innovative method Google will use to issue the offering. In a bid to distance itself from the scandal ridden world of Wall Street, Google will use an online auction format to allow investors to bid on the value of the shares they purchase. This move will save Google and its investors hundreds of millions in brokerage fees and should insulate Google against unscrupulous financial analysis and investment managers. On the other hand, it might also leave many investors without the benefit and security of professional advice when making their stock purchases.

Big questions about this IPO remain to be answered and in many cases remain to be asked. 1) Why is Google doing this at this time? 2) How will this effect the current version of Google? 3) How will a Google IPO effect the rest of the technology world? 4) Will Google’s announcement effect SEO strategies in the near to mid-term future?

1) Google is issuing the IPO for several reasons. First of all, it needs to bulk up its cash-holdings in order to fend off rivals MSN and Yahoo through improvements in its technologies and extra advertising of new services. 2004 will see a rise in search engine advertising as the big three introduce new services and compete for clients. We will also see the introduction of several new features that are currently being beta-tested such as geographic targeting of search results and contextual matching of information contained in various documents and advertising sources. In order to improve its public face and let the public know it is introducing new technologies, Google is going to have to spend a good deal of money, especially in light of the tremendous advertising budgets wielded by Yahoo and MSN.

2) It is difficult to say how the current version of Google’s traditional, (free) listings will be effected by an IPO. It is likely we will see more paid-content finding its way into the Top10 as investors will expect to see some sort of dividend from what is considered the most successful Internet property of all time. While the addition of paid-content in the traditional listings might seem way out of step for Google, many of the sites that are placing in the Top10 today are there because they paid someone to put them there, but not the folks at Google. Google’s PageRank formula had proven easy to manipulate in the past, causing Google’s engineers to tinker with the algorithm over the past 12 months. The “current” version of Google has been undergoing changes for much of the past year and should be considered, in actuality, several versions of Google. These changes have mostly been happening in the background with the introduction of what was supposed to be new spam-fighting algorithms and the integration of new services such as Blogger, Froogle and AdSense. The clean and extremely simple interface has remained the same but the results that Google has been returning lately have been laden with spammy SEO techniques such as hidden text, link-farms and keyword stuffing. We’re hoping the issuance of an IPO will help Google’s engineers focus on re-creating a product that end-users love to use without the inclusion of irrelevant and highly manipulated sites.

3) A Google IPO could have an invigorating effect on the rest of the technology sector if it is successful. Firms from the Silicone Valley to New Delhi have several new and innovative products to bring to market but most great ideas in development today will never be seen by the public as investors are justifiably wary of putting their money into the tech-sector. Google’s IPO might have a positive effect on a highly jittery investment community. At the same time however, like other tech-stocks from past and present, Google’s perceived value of $15 – $25Billion seems somewhat overstated and could mark the beginning of a new tech-bubble based on an unproven but fiscally feasible revenue model, contextual advertising. This is an area we should all watch very closely as we’ve been lulled into a false sense of security based on hubris before, with disastrous effects. Here’s to hoping the investment world keeps its collective heads on its collective shoulders before the collective collection agencies come-a-calling.

4) Lastly, will a Google IPO effect SEO strategies? In a word, absolutely. Google has consistently led the search engine sector over the past years with new innovations and customer-loyalty. Where Google goes, the rest of the field tends to follow. Google getting larger and more powerful leads us to believe that the days of the search engine spiders have returned in force. While bulking up on our Paid-performance services, mainstream SEO companies will be breathing sighs of relief this week as the realization that our market will not be fully dominated by AdWords and Content Match programs but will likely be split between specifically targeted advertising through contextual matching and traditional search engine return pages, just like in the old days. With the introduction of MSN’s new spider based search tool and the inclusion of Inktomi results in the Yahoo search returns, it is fairly easy to see that SEO techniques designed to please spiders are going to be in very high demand in the next few years. At the same time however, SEO firms will need to be far more precise in handling paid-advertisments through AdWords and Content Match programs as these revenue generators will be pushed heavily by the accounting departments of the big three firms.

Google’s IPO will have major implications for the entire tech-sector. How it plays out remains to be seen but the one certainty is that search, as an industry, has become a mainstream sector in both the global and Internet economies.

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Monday, October 27th, 2003

Google Going Public

This announcement was actully made last Friday but I was blissfully away from any and all computers.

Google announced that they will be issuing their first IPO in late February or early March. This will be one of the largest IPOs in history, valued somewhere between $15Billion and $20Billion! Google is likely going to issue the IPO in an auction format, allowing investors to bid on the value of their shares directly.

More information as it becomes available.

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Thursday, October 16th, 2003

IBM WebFountain Splash

IBM has introduced its new search tool, WebFountain to rave reviews from the IT community. WebFountain is the result of three years of research and development from engineers at Big Blue and may be the most well developed analytical search and data-mining tool to emerge to date. The search engine itself is housed on an IBM custom built super-computer containing over a petabyte (1024 Terabytes or over 1000 trillion bytes) of storage space with over 3-billion pages indexed, 2-billion pages stored and the ability to mine and analyze data from over 20-million pages a day! WebFountain has been designed for business and research use rather than home or interest surfing and could become a very powerful tool for managers, post-secondary students, researchers and entrepreneurs. Through several of the analysis features, users can find relational data between several sources at the same time while compiling results in a separate search-window for rapid access. IBM has invested an enormous amount of money into developing WebFountain. The tool is representative of the newest class of information applications which won’t just draw relevant information but will actually find facts and patterns amongst documents, analyzing and compiling the data while the searches are being conducted. Google is also working with applied information analysis tools as witnessed by last month’s purchase of Applied Semantics.

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Wednesday, October 1st, 2003

Google & Lycos Make AdSense

In a wise move, Google has outflanked its main competitor Overture by signing a deal with TerraLycos to display AdWords on several of TerraLycos’s US Internet properties such as Tripod, Angelfire, HotWired, Lycos.com, Matchmaker, and Raging Bull. TerraLycos joins other Internet heavyweights, iVillage, Weather.com and Switchboard as carriers of the AdSense program that allows websites to display AdWords advertisements on their sites. Thousands of smaller webmasters and media outlets also display AdWords ads through the AdSense program. TerraLycos (US) saw over 31 million visitors last year throughout its network of portals and sites.

One of the oldest search tools on the web has recently introduced a sleazy marketing campaign targeting other search engine’s clients. Lycos, owned by Madrid based TerraLycos, is using GATOR advertising to display advertisments for their free email system when users (who’ve either downloaded or been infected with GATOR software) go to competitor’s sites. Read more…

A great deal of information is leaking out of Redmond Washington this week as Microsoft’s spin-masters start the process of promoting the new search tool that will be incorporated in the new version of the Windows operating system currently code named, “Longhorn”. The new OS will blur the division between a computer’s hard-drive and the general Internet. The goal is to create the ultimate search tool, though with the number of features and tools being spoken of this week, it looks much like a Swiss-Army knife compared to the butter knife MSN currently provides. Read more…

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Wednesday, September 24th, 2003

IBM Enters the Fray

There was just too much news for our little ol’ newsletter this week. We really wanted to include this item but space was limited and the story is still in development. Here’s a hint for next week though:

IBM announced last week that its enterprise search engine, WEBFOUNTAIN is almost ready. Webfountain will be used by by businesses to find and contextualize information from anywhere within a corporate or business intranet. The most advanced feature is the contextualization of information, (not to be confused with contextual advertising), that will provide a user with definitions of industry specific terms and phrases as well as finding documents on similar topics for extra research. For more information on Webfountain, please visit the IBM Almaden Research Center at www.almaden.ibm.com/WebFountain (link no longer active)

Search engine marketing firms have reported much lower than expected results from contextual advertising campaigns, comparing click-throughs and actual purchases to the numbers shown by banner advertising. For the accountants and business planners at Google and Overture the news couldn’t come at a worse time. Both Google and Overture are depending on Contextual Advertising programs as significant revenue sources this year. If the bottom drops out of this emerging market, as it has from the once popular banner advertising market, both search firms could take a pretty large financial hit. Read more…