Don’t Mess with Google

September 22nd, 2008 | Sources: NY Times

Subjects: ,

Google insists it’s not a monopoly. Sometimes it just can’t help acting like one.

Just ask Dan Savage who started sourcetool.com, a B2B web site in 2005. Sourcetool is a directory of industrial products distributors. It adds value to conventional search by ranking distributors in dimensions Mr. Savage believes are important.

Mr. Savage’s business relies fundamentally on Google. He pays Google to place ads for Sourcetool at the top of search pages generated by terms like “crankshaft.” For people that follow Google’s path to Sourcetool in search of crankshafts, Mr. Savage pays Google AdSense to place targeted ads on his site.

Initially, things went well. Mr. Savage generated revenues of $650K/month. He paid Google $500K/month for the ads and after other expenses, he cleared $115K/month.

Then one day Sourcetool’s traffic went pffffft.

Savage’s ads had stopped appearing on Google. When he asked why, Google replied that it had updated its search algorithms and the new ones determined that Sourcetool’s landing page quality was low. As a result, Google increased the minimum required bid for Sourcetool ads from 6 cents to at least $1. The new minimum bid exceeded Mr. Savage’s limit, so Sourcetool’s ads vanished.

Savage spent hundreds of thousands of dollars to improve Sourcetool’s landing page quality, but Google’s minimum bids did not drop. Then Google started blowing off Mr. Savage’s calls.

Mr. Savage believes Google dislikes Sourcetool because it functions as a search engine (albeit narrowly focused), and it competes with business.com, a Google content network partner.

When contacted by the New York Times, Google gave plausible explanations for some but not all of the issues raised here. Meanwhile, Mr. Savage has complained to the Justice Department.


 

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